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Fri, 03 May 2024 Feature Article

Effective Business Management: Critical Thinking Approach in Addressing Sales Volume Decline

Effective Business Management: Critical Thinking Approach in Addressing Sales Volume Decline
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The purpose of any commercial entity is to generate money and to make profit for its shareholders by selling products and services which address customer needs and wants.

Since businesses generate money and to make profit from selling products to customers, it is therefore important for entrepreneurs to understand the meaning/definition of both a customer and a product so that they can make informed decisions in their operations.

Definition of a Customer: Any person or organisation with the desire and or means to buy your products (services) towards the satisfaction of their own needs and wants.

Definition of a Product: a product/service is any solution devised and provided by an enterprise in effectively and efficiently responding to the needs and wants of a target market. It is a business’ satisfactory revenue generating solution or answer to people’s needs and wants.

These definitions help us to see that customers generally exchange their money for products and services which helps them to achieve their goals. Some of these goals includes:

1) The pursuit of convenience — your product and services must bring convenience (peace, joy, and comfort) to your clients.

2) The pursuit of opportunities — your product and services must make it easy and possible for your clients to achieve their dreams.

3) To fight or defend against threats (problems) — your product and services must help your clients to solve (lessen or eliminate) their problems.

As such, when your business is not getting any sales, it can be an indicator that your target market does not know about the existence of your company, or they are not aware that you have a certain product in stock. In this case you must therefore adopt these Golden Rules:

1) Create an awareness in the community about your company and its products.

2) Create an awareness in the community about how the products you are selling can help people to:

1) pursue opportunities
2) fight/defend against threats
3) find convenience (peace, joy, and comfort) in their endeavors.

On the other hand, if your sales are decreasing, it can be an indicator that people can no longer afford your products, or they are no longer interested in what you are selling or in dealing with you because of various reasons which include:

1) Poor quality products — your products are not good enough in taste and in status.

2) Expensive prices — customers think you are overcharging, or they are poor to afford.

3) Poor customer service — customers feel like you undermine their dignity and status.

4) Complicated selling process — customers think you waste time and confuse them.

5) Incompatible methods of payment — you want to be paid in a way customers don’t know or don’t like. It can be too old, very new or not safe etc. for that target market.

6) Economic hardship — Some customers no longer afford your product because of inflation, and others have changed priorities, i.e. they like it, but it’s not urgent.

7) Change in fashion/trend — you still have in stock products that have been replaced by something fashionable. Always remember that quite often, peer pressure and status are factors when it comes to how people spend money.

8) Convenient competitor — people want to buy from you but it’s no longer convenient for them to do so, i.e. there is a new competitor doing door to door deliveries and yet you don’t.

Even though the reasons for a reduction in sales mentioned above may seem overwhelming, there is a great need to boldly and wisely devise mechanisms which address any challenge that leads to a reduction in viability and profit.

Listed below are some of the solutions you can adopt to handle the situations mentioned above.

1) Customers buying from somewhere else because of various reasons including the following:

a) Poor quality products in stock — source the right quality of products and price them fairly after negotiating cost prices with suppliers.

b) Poor customer service — learn and train your staff members on proper and effective customer service engagement.

c) Expensive pricing — do market research on various suppliers and their prices to negotiate the best terms, which promotes sales and profitability. Adjust your mark-up so that you can manage to sell within the industry price range.

d) Poor Product Range — You must give your clients what they need, you must give them what they want and so you must research continually their needs and preferences and then stock the right products which address such taste. Research the average customer basket so that you know the right product mix to stock.

e) Poor terms and conditions of payment — introduce current, safe, and favorable terms of payment which are very convenient and mutually beneficial to both parties.

2) Customers no longer interested in your products because of various reasons including the following:

a) Your products are out of fashion — research on current consumption trends and spending habits to be responsive to clients’ needs.

b) Your products are difficult to use and maintain — find safe, convenient, and easy to use products which customers are comfortable with buying. Train customers on how to use your products and provide after-service help.

c) Your products are no longer compatible with the customer’s other interests — find out the other uses of the products you are selling and look for products and services that go hand in hand with those.

3) Customers are not buying what you are selling because of lack of awareness on your products and services or visibility of your enterprise i.e.:

a) No community road posters and signage advertising your business and its products — put road signage and posters to promote business and product visibility.

b) No social media advertisement about your business and its products — create accounts on various social media platforms to advertise your business and its products.

c) No referrals from satisfied clients and other stakeholders — treat customers right so that they can act as ambassadors for your business.

4) Tech Savvy clients not buying from you because your business lacks an online shopping platform — create or rent and online shopping platform for your products and services.

Content adapted from the books, The Smart Decision Handbook and The Universal Customer Service Manual written by Brian Kazungu — https://www.amazon.com/author/briankazungu

For training and assistance on how to effectively use the Smart Decision Toolkit (Fundamental Congruence Checklist) for research and investigation purposes, contact Brian on — [email protected]

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