No matter how great your product or service is if you don’t have customers you don’t have a sustainable business. Also, you may have the ability to come up with a great new product or business, but that doesn’t automatically mean you can successfully sell it to customers.
Many startups struggle at first to find customers and generate revenue. Depending on how much working capital you have your business could be under the threat of closure before you have begun.
In most cases when a startup has slow sales, it is usually due to one of four reasons.
Problem 1: Lack of demand:
Sometimes an entrepreneur thinks they have a great idea and want to start their own business. They started it because they thought the idea was great. They didn’t check if anyone else liked it.
If there is no problem, there is no business.
Most successful businesses solve a problem. Think about what problem you are trying to solve.
If this is the case with your business, you need to go back to the drawing board with your idea and find out what problem it really solves, and if there is a value to the solution.
If you have identified a problem exists, next, you will have to find out why people buy.
People buy for a reason.
You need to find out what makes people buy.
Buying triggers vary from product to product.
The more expensive your product is, usually, the more complicated the trigger is.
For instance, the buying trigger for a morning coffee is most people’s daily routine of needing a caffeine boost in the morning.
However, the buying trigger for a plumber is usually a burst pipe or blocked sink.
People will only call a plumber when they are in trouble.
Knowing your target market’s buying trigger will help you tailor your marketing channels and sales pitch.
Problem 2: No Product-Market Fit
This means your product or service may be good, but it doesn’t match the requirements of the customer.
A quick way for finding out what the product-market fit for your target market is by studying your most successful competitors.
If they are doing well and keeping customers happy, then maybe you need to follow and improve upon what they are doing.
Think of ways you can draw your competition’s customers away and attract them to your business
Find out:
- How much do they charge?
- What is your competitors USP?
- What can you do to differentiate your business from them?
- Is there a new entrant into the market that is redefining it?
- Is there now an alternative in the market that renders your business irrelevant?
Problem 3: Poor Marketing
Ineffective marketing and sales are the biggest reason why startups do not make sales.
Your product could be great. The only problem is that your target market does not know you exist.
Marketing is a common area of waste for startups; marketing budgets are spent without focussing on the right channels and targeting the right people.
This is simple to fix when you to understand what the product/market fit is and the habits of your target market.
You can only get this information from your target market.
Interview or survey them ASAP and find out what they value, what features they need and how much they are prepared to pay for a product or service like yours.
When you have gathered the information from your target market it’s time to your marketing campaigns.
Before you do, ask yourself.
- Are you advertising in the right places, is this where your target market is most likely to be?
- Are your campaigns focussed on highlighting what your target market value?
- Are you giving them enough incentive to choose your business over the competition?
Problem 4: Bad Sales Processes
Your marketing may be attracting potential new clients/customers.
However, if your sales processes are not set up correctly, you may be missing out on sales.
People don’t buy for a reason, to supercharge your sales process you need to ensure you can block their objections.
One of the best sales gurus in the world is Victor Antonio. He describes the five main why people do not buy as MTNUT.
Let me explain.
Money
A basic sales objection all businesses face is the buyer saying they do not have the money. Most times, the buyer does have the money, but they aren’t convinced they should spend it with you.
To block this objection, you need to switch the buyers focus from price to value. Show them the value of your business. Prove to them they would be stupid to turn your business down.
Time
Sometimes customers will say they do not have the time to switch to your business. To block this objection, you need to develop a seamless transition from another provider to your business.
No Need
When a customer says, they do not need your solution is usually a sign to move on to the next prospect. It’s a lot easier to sell to people who need your business.
However, sometimes people do not know they have a problem.
It’s your job to show them why they actually need your services.
Urgency
Most people are lazy; if they can get away with doing nothing, they usually will. If they do not find the value in your business, they will delay as long as they can.
You have to learn the skill of creating a sense of urgency without being pushy. Create a compelling reason why they need to make a decision now.
Trust
If your prospect has no trust in you, then you won’t be able to sell anything. Always make sure that you understand their needs and offer credible solutions.
Build A Better Plan & Start Measuring Everything
Now that you have reviewed your solution, target market, market planning and sales process, the next stage is to build a better marketing and sales plan.
Start thinking about the key metrics that will help you identify exactly where the process is not working and set performance targets.
Forget vanity metrics, track metrics that will help you result in a sale.
Some meaningful metrics are:
Leads
- Cost Per Lead
- Conversion Rates
- Sales
- Sales Value
- Total Sales
- Retention
- Gross Margin
- Net Margin
Conclusion
Launching a start-up is difficult processes, not getting the initial reception from the market is normal and should be factored into your plan as a worst-case scenario.
Re-analyse what you offer your customer and where your business is in the market and take positive steps to achieve your goals. When you have completed all of the steps, you should see your sales improve.
Make Your Business A Success
The key to growing sales and building a successful business can be found in our Business Success Formula. If you structure your business using the Business Success Formula as your blueprint, you will decrease your chance of failure significantly.
We assess your business and implement our business success formula in our business assessment service The Business 360. It provides you with all the information to get your first customers and 10x your business in a matter of weeks. You can check it out here.