Is Your Demand Down, or Your Distribution Dying?
Filed under: Business Growth, Profitable Growth, Uncategorized
For many firms, happy days are not here again. If your sales haven’t grown past 2007 levels, it’s not useful to keep blaming the recession. Your service may be great, your sales people proactive, and your marketing on-message, but if you aren’t seeing results, something is wrong. Here are some examples:
- A mortgage originator survives the market crash only to watch sales trickle back while competitors report double digit increases
- A search firm transitions to temporary placements to combat the jobless recovery but doesn’t grow proportionately as their clients’ overall hiring grows.
- An old-line construction firm’s new “green projects group” gets little traction while new firms grow fast.
Why didn’t they grow? What are they missing? Is their demand down or their distribution dying? Knowing whether your firm has a demand problem or a distribution problem is critical because the solutions are so different.
If the demand for your firm’s products and services is declining you know it’s time to create new products and services or target new markets. Before investing in this, here are three signs your demand is down
- Your customers’ customers are not healthy. Understand how your customers’ sales force is faring. Commercial real estate, for example, is not turning around. If you sell products and services that developers buy, it is unlikely 2011 will be a great year for your firm.
- All your competition is suffering. Ask your most innovative competitors, “How’s business?” If you listen carefully to their answers, you can learn if their business is really hurting and not for their lack of innovation.
- Substitutes and cheaper alternatives aren’t selling. If your buyers aren’t favoring imports or Do-it-Yourself solutions; your premium offer is in trouble.
If demand for your firm’s products and services is strong but they aren’t buying from you or your traditional competitors, you need new distribution channels. Here are three signs to confirm this.
- The Internet is working for your competitor. Despite your disrespect for how the web commoditizes what your firm sells, your prospects and customers may no longer value your premium service
- Your sales reps can’t get customer appointments. Your customers are growing but their buyers keep getting younger and won’t make time for your firm
- Suppliers and distributors are now your competitors. Your customers and vendors are connecting with each other and don’t seem to need you.
Too often firms assume they have a demand problem. Often it’s their dying distribution. Learn which it is and you can confidently invest in the right solution.
Go Ahead, Try Buying From Us!
As hard as business is, why do some of your suppliers act like they’re disgruntled TSA workers giving you a “pat-down” just for trying to do business with them? Whether it’s your delivery, raw material or purchased services, we’ve all had vendors who just won’t let us:
- Buy more for a better price
- Pay faster for a discount
- Commit longer for predictable service
How can so many firms still have such big blind spots? Is there any way your firm is making it too hard to buy from?
- Can your salespeople easily sell everything your customers need?
- Will your customer service group resolve all the issues a buyer raises?
- Do your account managers offer many ways for customers to buy more from you?
In total frustration, we’ve all just given up and stopped buying from a company. How can you be sure your customers don’t do this to you?
No company ever tries to offend customers. But many firms get so busy they just assume they still know their customers. Relying on harried customer service and reduced sales forces cannot provide unbiased feedback. Just as marriages are saved by when a third party hears, listens and translates what one party really means, here are three ways you can get the deep understanding you need.
- Have your peers “secret shop” your business. Find two friendly competitors outside of your territory. Give one clear instructions on what to buy and what demands to make and another absolutely no guidance. Then, watch and listen to what happens during the transaction and afterwards. And do so from both your side and theirs. Finally reciprocate and secret shop your competitor for your peer. You will learn just as much by repaying the favor.
- Deputize key customers to shop your problems. Recruit three loyal customers and ask them to create “a problem” you need solved. After their experience in trying to get it resolved by your team, bring the customers and your team together to debrief on it. If you treat it like the TV show, “Candid Camera” it can be a fun time for all concerned as well as a great teaching moment.
- Hire an expert to match what your company sells with what customers buy. Investing in a professional trained to uncover customer concerns always uncovers new profit opportunities and will impress your clients. To watch a video of my methodologies click here.
If you know your customers’ true feelings your firm can remain their “go-to” vendor. What else would you want your customers to say?
