Your company has had enough success to stay in business and serve customers, but maybe you’re not getting the financial returns you’d hoped for.
When you feel like your business is stuck and not making any progress, these are the likely reasons — and the steps you’ll need to take to find more business success:
1. If you don’t have a sales pipeline of new customers, execute an automated marketing strategy.
An on-again, off again approach to marketing doesn’t build a strong sales pipeline for new customers. If your company only puts energy into marketing when things are slow — stopping as soon as you get new customers — your business revenue will stay flat. This is the “Double Helix” trap, where you’re only marketing sometimes and only working on delivering your products or services at other times. The key is to be always on by automating your marketing strategy to produce revenue growth.
Poor lead nurturing is a common cause of low sales growth.
Start by following up on all sales leads multiple times. Poor lead nurturing is a common cause of low sales growth. Then, make sure you’re marketing consistently to your suspects (people who may experience the pain point addressed by your solution) as well as your prospects (people who have expressed interest in your solution) and current customers, so that your solution is readily available to them when they’re ready to buy.
Most businesses focus their marketing efforts on current customers — a good target, since conventional wisdom says it’s much easier to get additional business from current customers than find new ones, and current customers can be turned into brand evangelists who refer additional prospects. But most businesses also market to long-lost prospects, and this is where their sales and marketing strategy fails. These prospects have stopped returning your phone calls and emails; they’re no longer interested in your product or service.
You need to spend much more time marketing to suspects and converting prospects into customers. Suspects and prospects are the future sales that will feed your pipeline and expand your business. And you’ll need to market to these groups differently.
Your suspect list is large — too large for you to directly sell to individuals — so the goal is to get them to express interest, at which point they’re prospects. You can reach them through traditional advertising, paid search, organic marketing, email, direct mail, social media or trade shows. You’ll want to reach each of these prospects individually as consistently as possible, and through a variety of means (direct sales, referrals and direct or email marketing), so your solution is there the moment they need it most.
Test these marketing tactics one at a time to see what works best for attracting your prospects and converting them to customers.
2. If your existing customers keep leaving, create a superior customer experience to keep them coming back.
When you’re too busy getting new customers through the front door, you let existing ones leave through the back. And this makes you lose ground, because customers can get a similar product or service anywhere. Customers today make purchases based on their personal experience with your company.
Customer service has morphed into customer experience (CX), covering every “touch point” where customers interact with your business — from visiting your website to buying your products or contracting your services, from post-purchase follow-up to customer service interactions. That’s a lot of interactions, which can make it difficult to create extraordinary customer experiences.
Monitor your brand’s mentions on social media and take action on customers’ ideas and suggestions.
First think about the specific reasons your customers like doing business with you. What are the advantages of working with your company rather than your competitors? Are these the parts of your business where you’re already offering excellent CX? What can you learn from your strategy in these areas?
You can’t address every customer touch point at once, so consider starting with these four methods to improve your CX:
- Marketing segmentation: You should be collecting customer data every time they do business with you. Then use this data to select customer-specific promotions and offers. Start by segmenting them into general demographic groups, and the more information you collect, the more you’ll be able to personalize your marketing messages.
- Stengthen relationships: Whether you send them via email, text or offline direct marketing, personalized messages help create a positive impression of your business. Your customers will notice that you’re paying attention to their habits and that you care about them. You’ll also discover which marketing messages they’re most responsive to, building a bond with your brand.
- Seek their input: Everyone wants to feel that their opinions matter. Monitor your brand’s mentions on social media and, whenever possible, take action on customers’ ideas and suggestions. Be proactive by conducting surveys about all aspects of your business, including CX. This gives your customers the opportunity to provide formal feedback, and underscores that you care what they think.
- Make it personal: When a customer calls your customer service department, are they greeted by name? It makes a huge difference if the representative is able to pull up the customer’s account, including their purchase history and other personalized information from your internal system.
3. If you’re making all the decisions yourself, delegate some responsibility to your team.
If you can’t make money while you are not working, you have a job, not a business. Good leaders delegate. It’s the only way to find the leverage to grow your company. Many small business owners and managers struggle with this, and as a result, work longer and harder hours than most of their employees. If you end up doing everything yourself, your organization is still “hub and spoke” (in which all the spokes of your business rely on you, the hub). This slows everything down — slower work means slower growth.
If you can’t make money while you are not working, you have a job, not a business.
Business leaders are responsible for setting the company mission and key goals for the year, as well as some of the strategies to get there. But the tactical part of these strategies should be detailed by managers and key employees (in their respective areas of responsibility) who know the best paths to success.
Every company needs managers or key employees in each of these areas:
- Sales and marketing (identifying suspects and closing prospects)
- Production (developing and delivering the product or service)
- Customer experience and support
- Human resources (HR) and other administrative tasks
When your organization is small, one key employee or manager may be able to handle multiple areas until the company grows.
Managers have a limited amount of time during their day to accomplish important tasks. But a famous Harvard management case study shows that much of a manager’s time is spent helping people who report to them complete tasks that the manager assigned to them.
When someone brings a problem to their manager, the manager often takes the problem onto their own shoulders. But to maximize your time, it’s important that managers help team members without taking away their initiative. You might accomplish this by scheduling time to address team members’ issues face to face — and only face to face — providing them with specific solutions or suggestions to carry out independently. As a result, managers have more time to focus on their own critical tasks.
4. If you’re always nervous about having enough money to pay the bills or reinvest in your business, make financial decisions based on these monthly metrics.
Few business owners started their businesses to maintain and review financial statements — it’s an easy area of the business to procrastinate. If you’re afraid of confronting the numbers, remember that knowledge is power. Once you get a really consistent handle on these metrics, you’ll know what’s working and what isn’t, and how much cash you have to grow your business.
If you’re afraid of confronting the numbers, remember that knowledge is power.
These are the key financial metrics that need to be reviewed every month:
Profit and loss statement (aka income statement): This financial statement shows your revenue, expenses and profit during a given period. Compare this statement to your budget and to your income statement from the same period last year.
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Balance sheet: The biggest short-term risk for a company is not being able to pay the bills. You can assess this by reviewing your balance sheet — specifically, the quick ratio, which takes the value of your current assets (cash, cash equivalents, accounts receivable) and divides it by your current liabilities. A favored metric of banks, the quick ratio is a measure of your business’s financial stability. In most industries, the ratio should be greater than 1, showing that the company has more money available than money owed. When the ratio drops below 1, it means your business may not be able to fulfill its financial commitments.
Cash flow statement: But the biggest risk indicator of business failure is running out of cash. Your cash flow statement will help you understand if you have more or less cash at the end of the month than you did at the beginning of the month. Understand what uses cash (like inventory) and what increases cash (like profit and accounts payable growing). An alternative, although a less accurate one, is to simply look at your monthly bank statement and see if you had more or less cash at the end of the month to determine if you are cash flow positive.
Closed sales: Within your customer relationship management (CRM) system, review your business’s sales-close ratio: Of all the proposals that your business sends, how many do you win? The ratio should be about 33 percent. If it’s much lower, you’re not getting to the right prospects. If the rate is much higher, your prices are too low.
Also review your 10 most important customers each month. This is not only a matter of revenue but also depends on these customers’ referrals, the additional products they buy, the feedback they provide, their retention and their superior brand power.
5. If you don’t have enough time, find a way to get critical tasks done every day.
It’s easy to confuse being busy with being productive. You tell yourself there isn’t enough time in the day to get everything important done. But you don’t have enough time because you can’t focus on the key tasks. To improve your productivity, take the following steps:
1. At the end of a workday, pick two urgent tasks that, if completed, will make your next day productive. Do these tasks first thing at the start of the day.
2. Block out interruptions by setting a time, in advance, when you won’t be interrupted. Start with 15 minutes, and bit by bit grow it to an hour. Setting aside this time will make it much easier to focus on your most pressing tasks. For any other tasks, use the Eisenhower Matrix to rank them based on this scale of urgency and importance:
- Quadrant 1: Urgent and important — Do it now
- Quadrant 2: Not urgent but important — Schedule it for later
- Quadrant 3: Urgent and not important — Delegate to a team member
- Quadrant 4: Not urgent and not important — Delete this from your task list
Start by picking one area where you feel particularly stuck and focus on that first.
To optimize your business growth, start by picking one area where you feel particularly stuck and focus on that first, before moving on to others. If you need more new customers, for example, focus on your sales pipeline. If most customers aren’t doing repeat business with your company, focus on your customer experience. If you’re short on cash, focus on learning from your financial statements and your cash flow. And if you can’t seem to get anything done, focus on your task prioritization and practice delegating.
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