What is ‘Business Quicksand’?
What are the symptoms of it?
Most importantly, how to prevent it
‘Business Quicksand’ is the situation when a business organization loses accounts and clients, the market they are in declines, sale revenues from the accounts that they have retained have declined, competition is taking accounts and possibly are far more advanced in many ways, products and services may be reaching their end of productive life cycle where the market has moved on to others more advanced, and total sales revenues and profit revenues are declining.
Now that the sales and profit revenues are declining, the business organization is more motivated to work with the accounts and clients more aggressively to uncover more needs seeking out more opportunities, look to penetrate their market more and look for more market niches to expand into.
They will be more motivated to do more advertising, PR public relations and trade shows and special promotional events, develop new literature and website to seek new customers and clients.
They may be more motivated to expand their product and service offerings to meet more needs of the customers, clients and the market.
Spending money on these efforts will drain profits even more.
The business organization will find that these new efforts may not produce immediate positive sales revenues which then will produce more stress financially and on the management staff.
Due to the sales and profit revenues declining, employee layoffs may happen.
To meet financial obligations, the business organization may have to obtain additional business loans.
These new efforts with product and service enhancements, expanding into new market niches, and more aggressive marketing, costs money, will take longer than they realize to implement and may not produce the immediate additional sales revenues that they are seeking.
Without these efforts, the business will continue to decline, making the situation worse.
The end result can be going out of business, competitor offering to buy them out at a low price or dramatically reducing all overhead costs and becoming a smaller business organization.
This is ‘Business Quicksand’
The following is a simple check list of fundamental business development efforts that need to be in place and advancing on aggressively, to prevent falling into ‘Business Quicksand’
1. Are your marketing efforts with advertising and PR public relations aggressive in your main market as well as other niche markets?
2. Are you identifying other niche markets and making efforts to expand into them?
3. Are your literature, promotional materials and website current with all products and services available along the applications and needs of customers that they fulfill?
4. Are you participating in trade shows and special promotional events in your market and niche markets?
5. Are you making efforts to expand your contacts in all of your accounts and customers, and explore other needs that they may have? Of this effort, are you just asking them what other needs they may have which often, they will not know; or are you getting to know far more about you customers and their needs and discussing possible needs you may have uncovered? This is investigated for your current products and services and possibly other additional products and services that would be good synergistic enhancements for your business.
6. Are sales revenues increasing in your current customers?
7. Are sales increasing in your current marketplace?
8. Are sales increasing in other market niches that you have identified?
9. Are number of accounts and customers increasing in your main market and your other market niches?
10. Are you updating and enhancing current products and services?
11. Are your products and services advancing with new offerings to meet more of your customers’ needs, needs of your main market and other niche markets?
12. Do all contacts in all accounts and customers thoroughly understand all of your products, services and capabilities?
13. In your key customers and clients and at least 80% of your other customers, have you increased key contacts within the last 12 months?
14. Do you thoroughly understand the business of all of your accounts and customers and thoroughly understand all of their needs that you can participate in?
15. Do you have an account management database to manage account knowledge and communications with all contacts in all customers, clients and potential new ones?
16. Do you have a verifiable good business relationship with all contacts in all accounts and customers?
17. Have you asked all contacts in all customers what they think about you and what your importance to them is? This is checking on your external branding, which is what your customers and market think and feel about you.
18. Have you asked all contacts in potential new customers what they think about you? This is external branding, again?
19. Have you asked all of your own employees what they think about your business organization and what importance they and the business organization serve for customers, clients and the markets? This is called internal branding,
20. Have you asked you own vendors from who you purchase materials from, what they think about you and what importance you serve customers, clients and the market? Again, this is external branding.
21. When you happen to meet up with competitors at trade shows, conventions, and special promotional events, have you asked them what they think about you? This is external branding, again.
22. Do you regularly attend the trade shows and special events where your competition participates with display booths, to study their marketing and offerings? Do you even know where all of your competitors participate in such?
23. Have you recently completed a thorough competitive analysis on your products, services, capabilities, markets and marketing efforts? This is ‘bench marking’.
24. Do you truly know all of your competitors in your market and niche markets and how you compare to them? Again, this is called ‘bench marking’. It is amazing how many businesses lack this knowledge.
25. Have you asked your vendors what other markets your products may have potential for?
26. Have you asked your own employees what other markets you may have potential for?
27. Have you asked your customers and clients what other markets you may have potential for?
28. Have you asked your professional business associations or trade associations that you belong to and participate in, what other markets you may have potential for?
29. Have you asked the journals and publications that you may be placing advertising, what other markets you may have potential for?
30. Have you asked all of the above people if they know of specific potential customers and clients they you may be able to do business with and you should contact? This is called seeking out referrals which is very fundamental.
31. Have you coordinated with your customers and accounts to directly visit your facility within the last 1 to 2 years, especially your key customers and clients?
32. Do you have a video on DVD and/or digital video on your website about your business and capabilities that you can utilize with your customers?
33. Have you personally visited all of your accounts and customers in the last 3 to 6 months?
34. Do you telephone each contact in all accounts at least once every 1 to 2 months?
35. Are you expanding your referrals network continually? These are strategic partners that can refer business opportunities to you? Or do you have any?
We can add more things to this list but you can see the efforts in business development that is needed to avoid ‘Business Quicksand’.
All of these efforts need to be continual to produce some level of results over time, 1 to 3 years.
Results do not happen immediately.
This is why these efforts need to be proactive.
When in ‘Business Quicksand’ and the sales revenues and profits are declining, rarely is there enough money available to fund all of these efforts appropriately over 1 to 3 years to see the type of positive results that is needed.
Do not wait for business decline to start doing them.
Once business has declined and you are in ‘Business Quicksand’, time is not on your side and adequate money funds will not be available.
It is important to avoid ‘Business Quicksand’.
If you need some assistance with any of this, contact me immediately.
Michael Marshall, PhD
‘The Business Doctor’
Personal website: www.AskTheBusinessDoctor.com