SMEs are under the hammer.
Last week’s MYOB Business Monitor, which showed 40% of SMEs lost revenue over the past year, with average falls a massive 27%, sent shudders among SmartCompany readers. In the lead-up to Christmas, there are fears the records monthly insolvency figures we’ve seen throughout 2011 will persist throughout next year.
As sales expert Sue Barrett put it: “It’s no longer boom or bust but boom and bust, where some businesses are prospering and making the most of it and other business will go out of business because they don’t adapt quickly enough.”
With this in mind, SmartCompany set to work. We contacted a group of our trusted bloggers to gather 10 quick sales and marketing wins for SMEs.
Sue Barrett, founder and managing director of sales company BARRETT, says it’s essential to figure out why, where and how sales are being lost.
“Questions deliver answers so make sure you ask yourself key questions which will then help you make better decisions,” Barrett says.
Think – is the fall just your company or across the industry? If you’re underperforming your peers, look at your pricing, products and services, and try to target the flaws of your competitors.
If the fall is cyclical or seasonal rather than unpredictable, don’t bury your head in the sand about unusual events – but keep on trucking.
“If you or your market have never seen this type of downturn before, then you need to rethink your current approach and look at how your customers may have changed their buying habits,” Barrett says.
“Look where they are getting their information, how they may be making decisions to buy, what feedback they are giving you about their interest and desire for your type of business offering.”
Too often businesses can start forgetting about the people who keep them in business – the core customer base. They start focusing on more of a general approach and forget those dedicated few who have kept them in business.
SmartCompany blogger and entrepreneur Julia Bickerstaff says businesses ought to focus on customers who are more likely to spend than anyone else – the ones that pay a good price, are cheap to acquire, and create the least amount of hassle.
“Then take another look at your marketing. Are your efforts focusing on your core customer? Not all falls in sales are equal.”
“If you are losing difficult unprofitable clients your business will be better without them. If you are losing core customers you should be alarmed and you need to refocus all your activity around them.”
Irrelevance is dangerous for a business, so you might need to swallow your pride to keep your customers satisfied. Look forward – will your customers continue to want your product, and if so, how can you make sure they continue to spend money with you?
Says Barrett: “Examine the relevance of your business to the current market – do people still want what you offer? Will they still want it in the future? If so, have they just cut down on spending to manage their budgets betters? Can you offer them something smaller, more affordable, so they can still buy from you?”
Businesses may complain about losing sales while ignoring one of the best open markets at their disposal – social media.
Deals Direct co-founder Paul Greenberg says businesses need to start cultivating a following on sites like Facebook and Twitter, which in turn brings in new customers.
“Facebook etiquette is not about the hard sell, but you want to bring customers a little closer to the brand and into the content.”
“Especially in retail, the entire experience has to link together. And the Facebook or Twitter page is an extension of not only your site but your entire business. So you need to try to be in business with everyone wherever you are online.”
But Greenberg warns businesses this isn’t a quick fix – you need to be able to manage different sales techniques at the same time.
“You have to get all of these techniques in balance. It’s like spinning plates – once one falls over, you have to go back and forth to keep them all in the air.”
Trent Leyshan from Boom! says many SMEs fret about losing sales but don’t actually do anything to combat the decline. While focusing on your key customers is crucial, he says, it’s also important to go out and canvass for new work.
“I was listening to an interview with someone who was in the mining space. He was saying that the most successful exploration companies are the ones that simply drill the most holes.”
“That’s really all you need to know about how much activity you should be doing. Just go out there and sell what you’re supposed to be selling. Don’t get distracted in tactics that don’t work – just canvass for work as often as you can.”
Coming up to Christmas, it’s a good idea to get as many customers in your doors as possible, and getting them in a second or third time is even better. Loyalty programs are key here, but as marketing expert Bri Williams explains, many businesses don’t use them properly.
“Make sure you set people on the way by giving immediate points towards the first reward,” she explains. “Why? Completion. We are driven to complete things and working towards an achievable target is attractive.”
Retail Doctor chief executive Brian Walker also warns too many businesses forego their VIP lists and don’t take advantage of a huge database willing to spend money. Whether it’s a VIP-only discount night, or a special offer for your loyal customers, there are plenty of things you can do with repeat customers in order to keep the key shoppers coming back.
If you’re losing sales and can’t figure out why, there’s a fundamental problem with your business. Marshall Place Associates chairman Colin Benjamin says in this situation, you need to adopt a “customer comes second” policy – focus on the viability of the business first, the health of the staff and the rest will follow.
“The primary focus has to be upon the viability of the business… and a sit-down session with sales and marketing staff to focus on making an effective offer to previous customers to either make an additional purchase or make a recommendation to their customers and associates.”
The immediate focus of the business needs to be on product, services and innovation – “and a request to customers to pay a visit to your site following a personal call”.
Only then, Benjamin explains, should the customer become a priority. And they should definitely receive a “personal note of appreciation for their support”.
Often a business might find it’s losing sales and can’t figure out why. There are plenty of reasons this can happen, but Bri Williams warns you need to figure out when this happens – and quickly determine the best solution.
“We use rules of thumb to navigate the world around us such as, ‘I buy ‘x’ from the supermarket unless it’s on sale at the chemist’ and ‘things are cheaper online.’ If you are losing market share it’s because something has interrupted the rule of thumb involving your business.”
Some investigation is required here – you can’t afford to let your business slip away. Williams says you need to get on your feet and start investigating where your customers are going. And if in doubt – just ask.
“Find out what and why by asking customers and/or stepping in their shoes through the purchase cycle.”
While boosting your SEO work takes time and isn’t going to get you instant results, OzHut founder Wai Hong Fong says there’s still plenty you can do to improve your conversions.
“Typically when you work on SEO you’re targeting broad categories, but you can simplify them and look at more long-tail key phrases of more than three, four or five words,” he says.
“There’s plenty of gold in there and people are searching for it. Even if you can allocate a small amount of resources to it, there’s a serious marketing opportunity there as people search for more specific product types.”
Your staff and customers will be watching you, so don’t forget to lead. As Winston Churchill said, “If you don’t know where you are going, then every road will lead you nowhere.” Or as Sue Barrett says: “Show clear and concise leadership”.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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