Sales won't save your business. Here's why.
During my daily (ermmm…hourly) scrolls through my Instagram feed there are more motivational quotes popping up than I can count. My favourite ones are usually a blend of a coffee reference, a ‘you can do it!’ boost and a reminder that Rome wasn’t built in a day.
I like those ones.
They work for me.
They’re at once motivational, inspirational and safe.
That word – safe – is important. Because frankly, there are some pieces of advice floating around via Instaquote that are dangerous in their simplicity.
Granted, those lil graphics demand brevity, and who on earth knows what the original context was when the All-Star businessperson said it the first time. But still – for the legions of IGers who are double-clicking or screen-capping those knowledge bombs, following them could turn out to be a disaster.
Sales Cures All
A few weeks ago this piece of advice from Mark Cuban was making the rounds. It swam through my feed a few times a day, and each time it did I grew more and more uncomfortable with it.
Yes. You need sales in order to be a business. A venture without customer or clients is just a hobby. But if you’re struggling, bringing scoring a heap of new sales isn’t necessarily going to help you. It could actually make things worse.
Quality, Not Quantity
Bringing a struggling business back from the brink, or busting through a plateau requires high quality sales. Sales that add to your profits, can be fulfilled without an operational breakdown, and support your positioning in the market. Here are 3 key elements to watch out for before going full steam ahead with a Sales Cures All approach.
1) Price for profit
In order for a sale to be worthwhile, it has to at least cover the costs of producing and delivering the product or service. That’s the bare minimum. And let’s be honest – you’re pouring way too much time, effort, resources and love into your business to juuuust be scraping by at break-even.
Before making a push to bring in more customers:
Know your expenses and your breakeven point. How much does it cost to create and deliver your product or service from start to finish. Know this number. Love this number. This is the price you absolutely must sell at, otherwise you’re losing money with each and every sale you make.
Put profit into the mix. Increasing your sale price to include profit is all about building your business’ savings account. It’s the money you’ll be able to invest in that new website, upgrading your CRM or hiring out fabulous social media support. It’s also your wiggle room when it comes time to negotiate. Start with an extra 10%, and work your way up from there.
2) Smart scaling
Especially if you’re a service provider, there’s a limit to how many sales you can make before things just go bananas and you run out of hours and energy. If you’ve been burning the candle at both ends and still aren’t seeing the results you need, adding a handful of new clients isn’t going to help matters. The financial upside may be tempting, but you’ll be headed straight for burnout.
Same goes for makers, artisans and producers. How many units can you manufacture each month without quality standards slipping? How many sales can go through your shipping process before there’s a fatal backlog? How much inventory can you reasonably invest in to accommodate a surge in demand?
Before driving hard for more sales:
Review your operations. Look for bottlenecks and spots in the process where there’s wasted time or resources. Fix those before stirring up a boatload of new sales.
Look for leverage. How can you turn an existing service into a leveraged product? If you spend a lot of your 1-on-1 client time answering the same sort of questions, can you turn that expert advice into an audio + workbook digital solution that’ll give them the benefit of working with you, without taking the time from your schedule?
3) Think ahead
With elements 1 and 2 we’ve ensured that the sales you’re making are worth making – both financially and operationally. But there’s also the tricky business of how you’re making these extra sales. I’ve seen businesses (both online and offline) do a tremendous volume of sales by slapping on discount after discount. Even if they’re still managing to bring in some profit (doubtful…) the message they’re sending to their market is a doozy. It devalues the brand, makes them look desperate, and if hard to come back from when they want to return to normal pricing models again.
Here’s what to do before hanging out the sale sign:
Discount sparingly. Shaving off a few percentage points here and there is a slippery slope. Competing on price really is a race to the bottom – and there’s no profit down there. Focus on offering bonuses and bundles that maintain your financial reward, while still giving your clients and customers a deal they can’t pass up.
Maintain positioning. If you’re branded and positioned yourself as a premium product or service, then having fewer sales may actually work in your favour. The Birkin bag is iconic and coveted precisely because the market isn’t flooded with them. If you could just pop down to the mall and pick one up, the prestige would be gone. Same goes for your product or service.
If you business results are falling short of where you need them to be, the solution may not be making MORE sales. You may need to make BETTER sales. The good news is that that’s precisely what I help my clients do. Let’s explore how we can work together to help you achieve your ambitious entrepreneurial goals.