Revenues are Down – What Do You Do Now?
Revenues are flat or down! The CEO and Board are badgering you for an immediate fix. You’re stuck. What are your options and what can you do to recover – and recover quickly?
At some point or another, your company will need more revenue. It’s the lifeblood of any company, the fuel that allows everything else to happen. Competition seems to be ever increasing, and it does not appear to be industry specific. Customers are becoming better educated, have access to more comparative information, and are much more capable of taking your hard-won business and giving it to your competitors. When the inevitable happens and revenues become the focus, what can be done to bring more revenues in? Of course it is a complex question with many possible solutions; but consider these 15 points and see if there is a nugget or two that will help you:
1. Create a sense of urgency: Companies can become lax over time. Motivation and excitement can wane. Staff morale can slowly ebb away. By creating a sense of urgency to recover revenues, it can help bring a team back together around a common worthwhile cause, and generate a sense of ‘can do, will do’. It’s about winning hearts and minds and then the magic starts!
2. Upgrade your team: Revenue challenges can highlight weaknesses in your team. It may be in Sales, Marketing or some other key delivery department. When Staff are performing, they deserve credit and praise, but when they are not you need to ask are they the right people to recover the revenue gap; if not, act fast and find higher performing people.
3. Invest in Marketing: When revenues are down consider investing your current marketing expense dollars, and maybe more if you can afford it, only in Marketing lead generation. However, you need to be clear that the purpose of this investment is to generate short-term leads that are of a calibre the Sales team can convert quickly to revenues. Track the expense, track the number and type of leads generated, and track the conversion rate to revenues.
4. Invest in Sales: Consider adding more sales resource. More resource can often mean more access to customers and lead to increased revenues. However also know the time-constant here: the time it takes from signing-off the new expense, to finding, hiring and training a new salesperson, and then the time it takes for them to deliver upside revenues. If it’s longer than the time you think you have, invest in Marketing (lead generation) instead.
5. Introduce New Products/Services: Your current offering may be too old, non-competitive and in need of refreshing. Consider adding new products or services which may mean accelerating product or service roadmaps. Concentrate on the ones that have the shortest time to upside revenues.
6. Talk to your customers: So much can change (and quickly) with customers, that it makes sense to talk with the customers you have (or had) to get their perspective. “Is the market down”, “are they losing to their competitors”, “have they designed you out”, are some of the common questions that can be answered through open and honest customer interaction. The closer your relationship to your customer base the fewer surprises you will have around revenues.
7. Increase Sales Incentives: This is an area that requires careful navigation, as increasing or adding financial incentives can help, but Sales people will make a strong case why they need to be kept for the longer term. Be creative with this, and communicate openly that this initiative is a short term one to help get revenues back on track again. Pay for results not for effort!
8. Reduce prices / sell more: Know if your product or service has price elasticity. This means understand the correlation between pricing levels and volume.
Oft-times reasonably small reductions in price can help increase volumes considerably. Customers always have an ‘ideal price point’ for your product or service.
The closer you are to this the more volume and percentage of their overall business you will attain.
9. Add some bells and whistles: Consider adding some extra functionality that in some ways adds appeal to your offering. How many times have you seen a car sales representative “suggest” they can add an extra option to the car to make the buying decision more attractive to you. The added cost can be negligible compared to the loss of the sale. Try and offer what you competitors are not.
10. Create new Sales channels: Have you considered adding to your sales channels. For example, do you have an Inside Sales team, do you use Reps, Distributors or Value-Add Resellers (VAR’s)? Have you considered offering your products or services online and creating a Business-to-Consumer (B2C) channel instead of just a Business-to-Business (B2B) channel (or vice-versa). Understand customers buying behaviours and this will guide your sales channel decisions.
11. Hire a Coach or Consultant: Consider contracting someone who has deep experience at advising or actually helping out in recovering revenues. There are many great and highly experienced folk locally who can work under your direction and bring external knowledge and ideas to bear on the revenue gap challenge. Find people who show a deep understanding of the challenges and who have lived through them on more than one occasion in the past.
12. Implement social networking: Buying behaviours have changed significantly for many industries over the last 10 years, and they will continue to do so. Get your company, products and services in front of your customers in the way they choose to connect. Social networking is simply the fastest way to get in front of a large number of people, and to get them to spread the good word on what you offer.
13. Re-package / re-brand: Does the look and feel of your product or service seem old now? Take a leaf out of Apple’s book – create power in the brand by making it modern, simple and approachable. People are drawn to these attributes, so create them and see sales grow again!
14. Go after your competition: Create a buzz around out-competing, out-marketing and out-selling your competition. Highlight their weaknesses, play to your strengths and do it quickly and consistently. Chances are you might be able to catch them out and land some short term revenue gains.
15. Call a Last Time Buy (LTB): Consider placing a customer-wide communication about a product last time buy, and put tight timescales on the buying period.
This can generate one-off revenue gains as customers may need to hold increased inventories. Be careful that this is not a short term gain by creating long term pain for the customer base.
There are many other options including increasing prices, investing in staff training and creating winning partnerships. A revenue gap requires a consistent application of motivation, positivity and belief that the gap can be closed and revenues recovered. Over the history of a company it will be challenged with revenue shortfalls – those that recover quickly and with poise, inevitably are the ones that grow much larger. Choose growth and be thankful for the opportunity to strengthen your company!
By Joe Connelly
Joe Connelly is co-author and co-founder of The Nine Prophecies Inc., a worldwide training and coaching organization geared towards enabling positive change in people’s personal and professional lives. Joe can be reached at joe@TheNineProphecies.com, or TheNineProphecies.com.