Posted on: Wednesday, June 29, 2005

Evaluate everything when business slips

By Joyce M. Rosenberg
Associated Press

NEW YORK — When sales start to slip at a small business, the solution is likely to involve more than coming up with a better pitch to customers. The problem could be a failure to keep developing new sources of revenue, or it could be a decline in your customer service or other operations.

Taking a look at all aspects of a company is the best way to get sales growing again, experts say.

"Often times, sales of a small business started to fall off because they have been focusing on client service and haven't been focusing on business development," said Lisa Aldisert, president of Pharos Alliance, a New York-based consulting firm.

Business owners "can get sidetracked by operational issues, by human-resources issues, by problems with a particular client," she said.

The answer in such cases is for business owners to delegate whatever tasks they can to employees or outside resources so they can focus on rebuilding revenue.

As business owners go in search of sales, it's critical that they seek not just any prospects, but regular customers likely to produce a steady stream of business. Aldisert noted that a company is more apt to win business from a past customer than from a brand-new prospect on a cold call.

"Go first to those who know you and have been satisfied ... as well as asking current clients for referrals," she said.

It's important to remember that many factors go into making a sale and keeping a customer, not just making a pitch. For example, there's your product or service itself — have your customers become dissatisfied with it? Is there a problem with your customer service, or a member of your staff?

"Evaluate whether there is anything about your offering that needs to be fine-tuned or amended," Aldisert said. "Take a hard look as to whether your service has slipped or whether the quality of your product has become less than it's been."

You also need to look at your competition. Are they providing better products or services? Are they beating your price?

You might even need to look in the mirror, to see if your own relations with customers are the problem.

"Swallow your pride and see what's working and what isn't working," Aldisert said

The best way to find answers is to go back to customers who you haven't heard from in a while and ask them what happened. There are two things to be gained from reconnecting with them: You can get some badly needed marketing information, and you also might be able to get them to do business with you again.

If you don't want to make the calls yourself, Aldisert suggested a blind survey of your customers conducted by an outsider.

For some business owners, the key to rebuilding revenue is to change their philosophy about sales. Instead of working to close an individual sale, they need to establish relationships with longer-term customers.

Owners should ask themselves, "How do you generate a bunch of first-time buyers who become second-time buyers?" said Steven Little, a business consultant and author of "The 7 Irrefutable Rules of Small Business Growth."