|Sales Declining? You've Got To Weather The Storm In A Down Economy
RIDGEFIELD, Conn. - What are your numbers this month?? Market uncertainty has a barometer. One after the other, companies report declining sales, coupled with gloomy forecasts for upcoming quarters. Regardless of the channel, consumer spending holds the ultimate scorecard on plays for revenue increases. Declining sales have a domino effect on the rest of the market, as manufacturers reduce production and staff in deep and desperate cost cutting measures. Everyone loses ground: inventories swell, workers are on the street, companies lose knowledge capital, and potential for market gains are plagued by the aftershocks of the original setback.
What can companies do to fend off the sea change to a down economy? Barbara Poole, President of Poole Resources, Revenue Improvement consultants in Ridgefield, CT, tells clients to use what they already have inside. In down economies, the first instinct is to cut expenses. This works in the short term and can have a positive effect on a balance sheet. In the long term, quick hit expense cutting in response to near-term market conditions can erode overall business strategy. It becomes critical to move the focus away from expense reduction, and kick-in to high intensity revenue improvement tactics. What can businesses do? Poole offers these suggestions to companies to weather the storm of a down economy:
Focus on customer retention like never before: The name of the game has been customer acquisition. Afterwards, customers are like snowflakes in a blizzard fleeting and expendable. Research says 70 percent of defecting customers don't frequent a business again because they don't like how they were treated. The results of customer turnover in a down economy make it necessary to change the rules entirely. Acquisition is no longer the piece of cake it has been, as consumers become more cautious about initial spending. Repeat business with existing customers becomes the name of the game. Anchoring customers through low cost means of staying in front of them, attracting them into your business, can have very positive effects on sales. This is a Marketing and Sales partnership that works together to get customers back into the business, and increase the likelihood that they will buy once there.
Maximize every customer interaction: Sales force skills are critical at every turn. Are your salespeople prepared to drive revenue with every sale? Are customers truly being served? Is each customer being sold additional items that complement their initial purchase? How effectively is the business hitting the UPT (units per transaction) goals that you have adjusted to maximize sales revenue per customer?
Become the value-added names on the block: For many years, price has no longer been enough in retailer-vendor negotiations. This holds true in retailer-customer relationships as well. In a down economy, customers look for value at every turn. What will anchor your customers to your business? Will it be special services, such as free delivery, discounts on future purchases, frequent shopper rewards, or highly personalized sales and service after the sale? Customers will eagerly tell you what they want and need, if you are ready to listen. By setting the stage for people to get exactly what is important to them, when they want it, companies begin to blur the line between marketing, environment and sales. In effect, the store and the brand become the lifestyle the customer identifies with. By honing their listening skills, companies create the type of relationship that makes it too physically and/or emotionally uncomfortable for customers to go anywhere else.
Watch the numbers: Senior management should hold field or departmental management accountable for how their employees are performing for their customers. Show all employees - whether they work on the loading dock or write code for computers - exactly how their performance ties into the overall results of the company. "Employees can easily get 'the Dilbert mentality' of being locked in their cubicles, not necessarily connecting with the rest of the company," says Poole. "Getting them to understand that everything they do has a positive or negative effect on revenue is a very, very vital point."
Poole Resources is a Revenue Improvement Firm that assists clients with development of senior management top line business goals, along with skills required to deploy the resulting strategy into all areas of the business to achieve revenue targets. Representative clients include Warnaco, American Tourister, Compaq Financial Services, Allied Domecq Retailing USA, May Department Stores, and others. ###