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20 Reasons why sales are down & How to improve it

Updated: Aug 9, 2022

When it comes to sales, every business wants to know why they are down. Figuring out the reason for a decrease in sales is easy if you have collected data and feedback at every possible point. Otherwise, it can be difficult, but there are some methods that you can use to help find the answer.

Reasons Why sales are down

  • Ignoring A/B testing in the 4 P's that is Product, Price, Promotion and Place. Product (Can we improvise anything?), Price (Can we make any combo offer?) Promotion (Can we change how our product is being sold?), and Place (Can we optimise the location where the product is being sold or displayed?, Can we increase visibility with affordable partnership?)

  • Bad product delivery process

  • Increased competition from online sellers. Are we moving forward as per trend?

  • Purchasing habits have changed

  • Ineffective marketing strategies

  • Not focusing on quality assurance. Whether the service delivered meets with the terms agreed upon regarding performance, design, and reliability.

  • Ignoring customer feedback & Survey Results

  • Late customer follow up

  • Your sales team may need sales rewards for putting in extra effort.

  • Ignoring user experience on online platforms

  • Check if any good sales team has been removed or not hired a new group of people.

  • New or updated taxation policies that have impacted sales or demand

  • The current state of the economy and think how it has impacted sales? How can we reduce the impact on our sales?

We keep adding more reasons why sales are down. If you want to dig deeper into your sales, you need to go through the Checklist given below.

Try to Find Patterns

You may not have data like Amazon have but you may have some raw data. Try to look at your data and see if you can find any patterns. If you have been tracking your sales data, you will likely be able to see where things started going wrong. It could be a change in the product that was done in a particular period. You can also talk to your team and see if they have any ideas about what might be causing the decline. Sometimes Team knows why things are not working well. It is important to get as many opinions as possible in order to get a clear picture of what is happening. Finally, you can also do some research online or look at industry trends to see if there is something affecting your business that you aren’t aware of.

Change in Business Cycle

Fluctuations are part of the business cycle, and they can be largely attributed to changes in consumer demand. When it comes to finding the reason for the dropdown in sales, it's important to take these cycles into account. Businesses that are able to anticipate changes in demand can make necessary adjustments to their production schedules or marketing plans. Those that fail to do so may find themselves struggling to keep up with competitors or dealing with excess inventory.

If you have at least last one year's data you can predict when these cycles will occur or how long they will last.

Delay in Continuous Updatation of Your Product

Sales are related to a product’s features. If a product doesn’t have the features that consumers want, it won’t sell. Even if a company has a lower price than its competitors, it won’t make up for the lack of desired features. For example, Ask yourself why you prefer Netflix when you have Amazon Prime Membership. Consumers want products with more features and you may surprised even the big companies cannot upgrade sometimes. So big companies do partnerships with their rivals. Like Netflix partnered with The Walt Disney Company.

Have you made False Promises in Ads?

When a company makes promises it cannot keep, customers quickly lose confidence in the business. This can lead to a decrease in revenue and even closure of the company. In order to avoid this, businesses should take care not to make promises they cannot keep and instead focus on what they can deliver.

It is better to set realistic goals and timelines for projects. If something does go wrong and a promise needs to be broken, it is important to do so in a way that does not damage customer confidence any further and gives some relief or reimbursement. There are SAAS companies which do give even 100% refund if they are not able to deliver the right services.

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