Roller coasters are great fun at amusements parks. They’re not fun on your Profit and Loss statement. The anxiety experienced by too many business owners, no matter the size of their company, is a far cry from the happy anticipation we feel as the coaster slowly climbs to a pinnacle, and the exhilaration as the coaster plunges downwards.
The revenue roller coaster does the reverse. You are exhilarated as sales and profits climb, week by week, month by month. “We are having a great year!” you say. It seems as if everything you touch turns to gold. All those prospects in the pipeline are now buying. The thoughtful marketing you’ve invested in is generating many inquiries and new buyers. Your long-time buyers are making referrals and encouraging others to get their needs met by your company. You love looking at your weekly and monthly financials.
Then seemingly out of nowhere, the decline begins. First, it’s one week, which you can shrug off. Then it’s another, and another, until it’s months. You feel as if nothing has changed and yet it has changed markedly. What happened?
The mid-size business owners I often work with are frustrated that they can’t seem to stop the revenue roller coaster. Two steps forward, one step back, is not the way to build long lasting company value and owner wealth. They ask, “What can we do to keep our financials moving upward consistently?”
I have five answers to that question. These tactics keep the upwards trajectory going.
1. Be prepared to respond quickly to the first hint of a downturn. When things are going well, it’s in our nature to brush off hints of negativity. “Not now,” we think. “I’m too busy,” “things are great,” “this is just a blip.” When I speak with owners who’ve been frustrated by the roller coaster, they often tell me they regret not paying attention to the first hint of a downturn. That one customer who didn’t buy again. That one prospect who let an offer languish until it was no longer relevant. That one long time buyer who brushed off an invitation to lunch or a client appreciation event.
Your company isn’t going to make every single sale, every single time. But responding quickly to these early hints of downturns will help you understand the changes in buying behavior, especially what may no longer be relevant, or the perception that your company isn’t providing the value they expected. When it’s one or two disappointments you can analyze them carefully and take steps to change as needed. Perhaps there’s a shift in the market or the economy that you’re not aware of. Or a new technology that’s just beginning to gain interest. Or a once-favorite model is being displaced by a fresh idea.
If you are quick to respond to early hints, you can turn that potential downturn into an upturn by leading the new way.
2. Know who in the company is doing what. A business with revenue of $2 million or greater is likely to have a very hands-on owner and everyone else wearing a couple of hats. When everyone is working in harmony, the company will experience revenue increases.
Take a close look at what people are actually doing every day, not what their job descriptions say they should be doing. It’s my experience that in companies where the ownership culture is strong people are willing to jump in where needed, and to incorporate creative ideas into their work. During periods of revenue growth, they may be contributing at a high level.
Understanding what’s happening while it is happening ensures that the company keeps these new ideas and behaviors over time. There’s nothing like an upturn to boost creativity and energy and you, the owner, want to capture all of it.
3. Dive deeply into your customer and sales data. It’s tempting to just keep that virtual cash register ringing when revenue is increasing. “We’ll analyze it later,” you think. But the time to analyze it is at the exact moment the sales are happening. Who is this buyer? What do we know about him or her? What have they bought in the past? Is this another purchase of the same service or product? Or something new to them? In either case, why did they buy, and buy this now?
In order to keep your revenue growing upward over the long term, you must know the reasons your buyers buy. The best time to learn these reasons is at the time of the purchase. And how do you find this out? You ask them. When all hands are busy, it’s hard to make time for the direct conversation with the buyer, and yet it is the most crucial time to do so. The buyer is excited, they’ll be happy to talk to you, and you learn what their emotions are as well as their logic for the purchase. Emotions drive far more buying than logic, and yet they are fleeting. Capture the emotions driving the purchases so you can tap into that same emotion in the future.
4. Innovate your current offerings. Yes, the time for innovation is when you feel you have the least time for it. Innovation on Demand (TM) is adding value to existing offerings or showing buyers how an existing offering can be used in another way.
5. Double down on cultivating and nurturing your buyers. Cultivating buyers means you take away anything that will suppress their enjoyment or value of their purchase and you supply anything that will increase their enjoyment and value. Emphasizing service, access, convenience, speed: these are all techniques for cultivating buyers.
Nurturing buyers means letting them know how important they are to you. Timing is critical. At the moment of purchase, you begin your series of 4 marketing messages with an appreciation message.
If you’re intrigued by these approaches to getting off the revenue roller coaster, and wonder how they’d work with your company, we would love to hear from you. Give us a call at 703-801-0345 to set up a coffee talk (either virtual or face-to-face). We’d love to hear your story and your vision for the next few years.