The Dreaded 'Sales Stall': Why It Happens, How to Fix It

Your small business is generating revenue, and it looks like it has traction, so you start making plans for growth. You define the next set of products, and you add staff and capacity. The future looks upward and to the right.

In reality, of course, growth is never smooth. At some point, your sales may stall or even fall off.

Sales can stall for many reasons. When it happens, many companies respond in ways that would make the Marx Brothers proud: They run around like chickens sans heads, sell whatever they have to whatever new customers they can reach, and make desperate deals. While these tactics can help in the short term, the energy they require makes it even harder to identify and deal with the root causes of the problem.

That means it will likely happen again -- and sooner than you'd like.

So, what causes a sales stall? Leaving out things like a general economic recession (don't we wish!), many natural factors can play a role. The starting point, however, is to understand how markets evolve as they grow:

• Distinct segments with different needs develop. Some are mature, others are fast-growing.
• Customers become more sophisticated and start to make different economic tradeoffs. Your hot-selling product or service may no longer be so valuable as a result.
• Competing technologies emerge, and they offer prices and features more appealing to particular sets of customers.

What is happening to you is likely a combination of these three factors. Meet with your customers and ask them what is changing in how they serve their markets. Listen more than you talk. Figure out how you can help them succeed. This could actually be an opportunity to strengthen your relationships with your customers.

Also look at what your competitors are doing. Are they offering different products, bundling products at new price points, or servicing particular customers to the exclusion of others? Often the best indication of how a market is changing is visible in how competitors are succeeding.

Of course, you should be doing both of these things all the time, anyway. But most such efforts are pretty perfunctory -- we present roadmaps to customers, we look at competitors' financials. That's not rigorous enough.

What you learn may be trivial, or it may be daunting. You may find that you need to make changes in product specs and pricing, distribution, or services to address the needs of growth segments or deal with changes in your customers' priorities. Either way, these are lessons best learned sooner rather than later.

You might also have to implement some stopgap measures. If you can't afford to develop different products right away, can you focus what you have to suit a particular set of customers who might value it more highly (and perhaps pay more)? If you can't afford to hire additional sales staff to reach emerging customers, are there distributors that could get you started?

The key point is to make sure you are dealing with the right problems before you jump into the solutions. Then, at least, you will be on the right path.