Recently, I drove past a local shop advertising everything they sell at 50% off. While I don’t like to assume, it’s hard not to wonder if such a radical price cut is anything else but a desperate move to make sales that aren’t happening for the “normal” reasons.
When an owner is desperate for business, (at least) two things often take place in an effort to turn things around:
First, an assumption is frequently made that price is the reason they aren’t selling as much as they need or want to sell. While that is possible, it’s a situation that is easy to research online, much less by listening and asking your clientele. You have to word these questions carefully, since the answer to “Would you like to pay less for what we sell?” will almost always be met with a “Yes!” If you haven’t done this work, then thinking that your sales problems are caused by prices that are too high is an unproven and dangerous assumption. Regarding the store in question… I’ve been in there and price is definitely not their problem.
Second, desperate circumstances manifest themselves in the behavior of sales and marketing. The most common symptom of this is focusing on “everyone with a heartbeat” rather than everyone whose heart beats faster when they see, talk about or think about what you sell.
The latter group is already bought in to the idea of what you sell, so they don’t have to be sold on the idea, but they will need a compelling reason to purchase this product/service from you, as opposed to someone else.
When you focus on everyone, many of them have yet to develop an interest in what you sell (if they ever will). Some portion of them still must be sold on the idea, much less the specific product/service you’re selling and then they must be sold on your ability to deliver it. Selling the idea is often the steepest part of the climb and requires the most energy. Unfortunately, the energy you expend trying to sell disinterested people in what you sell is wasted, leaving less energy for the prospects who actually care about your products and services.
So what’s a business owner to do when sales take a tumble? Ask a few questions.
How’s your value proposition?
Price often comes up first when value proposition is discussed. We’ve talked quite a bit about pricing in the past and the importance of not assuming that your prices have to drop simply because they’re higher than Amazon’s or Wal-Mart’s.
Thing is, pricing is just a part of the value proposition. The ability to provide immediate gratification, convenience, service, delivery, installation, faster delivery than anyone else, financing, access to product / service / industry experts, consulting and better-than-typical guarantees / warranty coverage all have value.
The difference in value prop between the vendor with the best price and the vendor who can roll out delivery, financing, on-site expertise, installation and follow that up with a fair price and solid warranty is massive.
These things take an investment in time, labor, materials and/or people. It’ll be tough to roll them out all at once. Talk to your ideal clients and find out which of these things are most important. Move on those things first. Keep the conversations going.
Why did they leave?
Everyone has clients who have left them, including me. One of the best things you can do for yourself, your business, your next client, and your existing clients is to ask the ones who left what made them unhappy enough to leave.
A few questions to get you started… How did we disappoint you? What promises did we break? What was the turning point for you that told you it was time to leave us and find another vendor? What product didn’t live up to our promises? How did we fail to meet your expectations? What told that you could no longer depend on us? Was price the reason you left? What would have kept you as a client even if our price was higher? What did we fail to offer you that you wanted or needed from us?
The key to all of this is that it isn’t about you. It’s about what they want and need from you. If stuff isn’t selling, there’s a reason. Cutting the price in half isn’t going to find it.