When your business is growing, you’re on the right path. But when it stops growing, this adds up to stagnation and perhaps a loss in revenue. There are many reasons why businesses languish or do not grow as expected.
There is a lot of competition out there. It can sometimes feel like your business isn’t growing because of the competition, but that could not be further from the truth! There are several other reasons why your business may not be growing, and we’ll discuss them here.
1. You're Not Marketing Your Business Effectively
I’m only going to say this once; marketing will make up 80% of your business success.
If you’re not actively and consistently marketing, then you are not serious about building a business. Effectively you need to know who you are marketing to. This means creating detailed avatars for each of your customer segments.
In defining your avatars, you will describe:
the demographics, and psycho graphics of your ideal customer.
their most critical pain points and solutions to these pain points.
where your ideal client or customer gets their information from. This could be social media, magazines, social groups, forums, or industry bodies.
Once you know where your ideal customer avatar is getting their information from, you can look to advertise or promote your business in that channel.
2. Your Pricing Model Needs Tweaking
It’s not just a matter of getting leads and building revenue in business. There is a saying “revenue is vanity, profit is sanity.”
Basically, it doesn’t matter how much revenue or turnover you are producing, it’s the bottom line or net profit that is important. Whether you produce a physical product or provide a service, the time involved is an important factor. You may be charging a decent price for your service, but you're taking too long to actually deliver it, and therefore not making enough profit.
When it comes to products you may have a materials component that is costing too much in producing the product. Add to this situation spending too much time making the product [the cost of labour], and you have a recipe for little profit for a lot of effort!
Placing all your products and services on a grid and reviewing the costs of providing them will let you know which product or services are the most profitable. This will also inform your marketing efforts as you will know which products and services to promote and which ones to avoid.
3. Your Product Isn't Unique Enough To Stand Out From The Competition
Your products and services need to be unique and diverge from your competitors for you to have a chance in the marketplace. By being too similar to your competitors in your offerings you create a situation in which your products become commodities.
The only differentiation a customer can then rely on is price. If your competitor is larger and more systematized than you they can always sell at a lower price. You and your competitor will enter into a race to the bottom as far as price.
More than likely you’ll be first to reach a point where your business is no longer viable!
4. Your Not Optimising Revenues Through Existing Customers
The key thing here is to keep in touch with your clients or customers after you make the initial sale. Having a mechanism in place by which you can communicate with your existing clients on a regular basis, allows you the opportunity to then market more of your products and services to them.
The beauty of this approach is that you don’t have to convince your existing clients or customers to like, know or trust you. It is so much easier to convince them of a new product or service offering than it is to convince a new prospect.
The other aspect of consistently keeping in touch with your existing customers is that they are much less likely to leave you. Customer attrition is a reality in all businesses. The more you can reduce attrition the more profitable your business will be.