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Hit a business slump and have no idea how to get yourself out of it? Are you Blaming prices, lack of buyers or something else? Let's look at how to climb out of that slump proactively.
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Everyone hits slumps in their business at some time or another, and I would be shocked if you didn't. It's not only normal; it's to be expected. You can avoid having too many slumps in the future with good marketing and solid consistency, but what do you do if you're in the slump right now?
If you're stuck in the mud and you can't see a rope to haul yourself out, you're not going to be thinking too much about how to avoid the slump in the future, no no no.. you just want out!
So, let's pull you out of that slump … and… put measures in place to avoid falling back into the quagmire of business quicksand.
In today's episode, you're going to get insight into how you got into the slump in the first place, and the reason is not at all what you probably think it is.
Then, we will talk about quick ways to haul your cookies out of the depths of business stagnation. Finally, we wrap up with a five-question checklist (you can see it below in case you don't have time to listen to today's episode .. but you definitely should!).
There are a few red flags to look for to figure out why you have hit a roadblock in your business and why it feels like you're dragging a bag of rocks through wet sand. The usual go-to reasons are:
- My customer or clients just aren't spending money right now
- My prices are too high, and everyone is going to someone cheaper
- No one wants to invest in X offer or product anymore
Most target markets will always have periods of flux where people become more hesitant to spend money. For example, when elections are being held, we see a momentary drop in some areas of spending, when talk of a recession is around or when interest rates rise.
Those periods are short, and rarely does it knock out entire industries. Putting the pandemic aside for a moment, that was unprecedented, and some businesses were able to flourish like anyone who sold small desks and desk chairs for the millions of people working from home. But, unfortunately, it wasn't very good for most.
In most situations, placing blame for why your business isn't working on your customers or clients is unfair and unwarranted. It also takes you out of control and hands off your business's success, or failure, like what you do has nothing to do with the outcome.
When you assume your customers or clients aren't spending money right now…
If the customers or clients you're interacting with aren't spending money right now, they're likely not just spending as much or as often.
Perhaps in the past, you had a base of 100 customers who were all spending on average $50 per month with you. The most likely scenario is fewer people are spending less money with you, so now you have 70 people paying $35 per month on average with you.
That doesn't mean people aren't spending; it means you need to find more people and work on ways to increase the average dollar spend.
When you assume your prices are too high and everyone is going to someone cheaper…
You're blanket calling every single customer or client you have price sensitive, and from the psychology of buying perspective, that simply is not true.
What is happening is you now likely need to be even more persuasive as to why your offers are the best value.
I remember this very clearly from the GFC (global financial crisis) back in 2008. So many businesses had done very little in the past to win business, bitching and complaining that the GFC was the reason they were going bankrupt.
The reality was they had cruised along doing the bare minimum for so long that when people became more conscious of their spending habits, they were looking for businesses that met their needs. Buyers needed more information, more nurturing, and more explicit and more consistent messaging before they made their buying decisions.
When you assume no one wants to invest in your offer or product anymore….
You're deadheading your own business. If that is what you think, then it is time to change businesses.
Here's the thing, it's likely not the case anyway (unless you're Blockbuster trying to rent DVDs in a time of Netflix or Kodak ignoring the progress of digital media), but if you're a business with a run-of-the-mill offer like website building, photography, mindset coaching or just anything else the reason you're in a slump isn't due to people not wanting to invest they just don't want to invest with you. They're simply "just not that into you".
So how do you pull yourself out of the slump?
You work with reality, not assumptions
Before you diagnose your business with any aliment, you need cold hard facts. What data can you access to allow you to identify where the problem begins?
Has the number of fresh eyeballs on your offers dropped? You find that out by checking your web traffic, google search position, local walk-by traffic (if you're bricks and mortar) or the number of times your phone rings.
If you have not had a drop in fresh eyeballs on your goodies, then you move on to question number 2.
What enquiry and sales conversions are you getting?
Of the new eyeballs coming your way how many are enquiring and then converting to a buyer vs how many were enquiry and converting before you hit the slump?
Has the number of people choosing to spend with you dropped? If so, is there a reason you can identify that drop?
P.s if you're about to claim price increases, then we need a much deeper chat… it's not your price…
How much are people spending on average?
If that's not the issue, then you move on to how much people spend with you per transaction on average. Has that amount dropped significantly?
If so, is that purely a matter of buyers needing to watch their pennies a little more or is it that you're simply not putting effort into upselling or cross-selling?
Maybe a follow-up sales sequence you thought was working has stopped working. Maybe your website has a glitch that doesn't show up add-on offers anymore. Get curious.
I can almost guarantee that 90% of your problem lies within the data I have mentioned above. There are very few total mysteries in business. It's like one big science experiment with cause and effect easily predictable.
The best part is these numbers are trackable and measurable, and you should have the data already. Business is no place for making guesstimates or assumptions when the data is so easily accessible.
I bet there are some of you reading/listening right now thinking I don't have that data, yet you downloaded the Profit Lovers Plan + Track. You just didn't use it.
There will be plenty of you saying to yourself, "but I don't have time to find and record all the information; I am busy!" Well, I don't know what to tell you but… had you prioritised data collection, you would be able to diagnose issues in minutes.
You know I love to throw some real-life examples in, so let me give you two:
EXAMPLE ONE
A business owner who just increased prices (because the business was not profitable without a significant price increase) assumed a lack of new bookings was because of said price increase so they freaked out and wanted to drop prices.
One, that would have been a pointless exercise because dropping prices might have bought in new business, but they still were never going to make money. Two, the price was never the issue because the book now buttons on their website were no longer functioning so people were clicking off and booking elsewhere.
How did we figure this out?
Good old Google Analytics showed us that traffic to the site had not dropped, it was coming from all the same high-quality sources as always and it was coming from her area, but the booking details page was getting no traffic and people were exiting her site on the bookings page. Very odd behaviour for her business!
A quick look on the site and what do we see?
The Buy now buttons had stopped functioning. Did fixing the buttons fix the issue? Not entirely, because she had lost momentum and because fewer people were booking there were fewer opportunities to re-book them when they visited the business. She did recover eventually!
EXAMPLE TWO
A business owner assumed that because of the competitors in the market their product was no longer selling as well, and they wanted to drop prices to be more competitive.
So, once again on the data hunt, we looked at new enquiries, follow-ups, first-order value and re-order value.
What had happened was the business had previously been very proactive in following up new enquires, helping them put together new orders and following up again in 6 weeks to check out the first order went.
But...
They got busy, they were focused on other things, they dropped the ball on their new customer processes, and the conversion value dropped, the average order value dropped and the repeat orders dropped. All those issues equalled a significant drop in revenue that had nothing to do with competitors.
Ok, so let's keep talking about pulling your business out of a slump
Once you have looked at the data, compared it to previous peak times and identified if there are any quick fixes there the next thing you do is go to your list and engage them personally. Yes, personally!
I know all the experts are about leveraging the pants of business, doing less, automating, scaling and all that good stuff but if you're in a slump then personally connect with actual humans.
If you have a list of subscribers for example figure out who is the most engaged on your list, you can do this by running a quick report and if you don't know how to do that then ask your service provider support team to help you. Once you have that list start reaching out personally.
If you don't have a list, or once you have hit up your list move on to customers or clients who have purchased in the past. Reach out to them one by one and keep doing it until you see an increase in enquiries and sales.
Once you exhaust that option then start reaching out to people you don't know who could help you, people who have the type of customer or client you're looking for or people who could put you in contact with the customer or client you're looking for.
Yes, it's uncomfortable and you likely won't want to do it but I can't tell you how many businesses I have worked with that were on the edge of disaster but able to right the ship by doing this until they got out of the slump.
Once out of the slump though, you need to seriously look at your data collection to make sure it's up to scratch, your list building to ensure you always have new people to engage with and your visibility and marketing efforts.
People get out of the slump, then they do nothing different, and end up back there time and time again. It's frustrating for me to see as a business coach and it's been the reason I have disengaged with clients before.
Your wrap-up checklist of five questions to ask yourself
- Are you keeping your marketing fresh? Old ways of marketing can quickly get stale and become ineffective
- Are you growing your list? If you're not growing your list of potential buyers you will quickly exhaust your list and impact your sales
- Are you getting so involved in day to day running of your business that you're not focusing on being visible to fresh new eyeballs all the time?
- Have you added in a heap of offers or products to please everyone and now no one knows what you offer and your potential customers or clients are left confused?
- Are you keeping on top of your marketing metrics so you know where to look when sales stagnate?
If you want to permanently beat the funk, make sure you're on the waitlist for Members Club where we address your visibility, customise your metrics, create a customer journey map so you can easily identify why your slump is happening, clean up your brand messaging and so much more.