Slow Business

What is Slow Business?

Slow business describes a period of low business activity, tapering revenue growth, or stagnation. It can be a short-term challenge, a long-term trend, or a seasonal dip, but it is ultimately an issue that affects every business.

During slow business periods, employees are overstaffed, underworked, and fail to meet performance targets. Within the organization, this leads to decreased employee morale, lowered customer satisfaction, and a loss of money.

In the case of retailers, products vendors, and manufacturers, inventory may be overstocked or stale. For SaaS businesses, slow business means customer churn, low renewal rates, fewer inbound leads, and difficulty finding new prospects.

The ability to survive during periods of slow movement is generally seen as an indicator of a sustainable business.

Synonyms

• Business slow season
• Slow business growth
• Slow sales

Causes of Slow Business Growth

There are many causes of slow business. Technology changes, economic cycles, market competition, changing consumer tastes, shifts in purchasing behavior, and a variety of other factors can contribute to slowing sales and profits.

In some cases, slow business can be attributed to a change in the competitive landscape or an increase in market saturation. In others, it’s simply a matter of cyclical economic shifts.

Empty Pipeline

An empty sales pipeline is both a symptom and a cause of slow business. When a sales team fails to bring in new leads or close deals, the pipeline dries up. This results in fewer opportunities to convert prospects into paying customers or retain existing ones.

As a cause of slow business movement, an empty sales pipeline could be the result of:

• Inadequately trained sales reps
• Not enough output (e.g., cold calls, emails, etc.)
• Poor targeting during sales prospecting and lead generation efforts
• Marketing campaigns that don’t connect with the right customers
• A bad product or lack of product-market fit
• Pricing that doesn’t match perceived value
• Incorrect contact information

When business is slow, it’s worth looking into why certain customers are dropping out of the pipeline and where. For instance, leads dropping out after the proposal phase could indicate an issue with price optimization.

Lack of Working Capital

Around one in three businesses experience trouble or failure due to lack of working capital. It’s a requirement for companies to pay their bills, hire staff, launch new products and services, and eventually gain market share.

A shortage of working capital is a major cause of slow business growth, as companies are unable to invest in the resources needed to maintain operations and acquire more customers.

Lower Website Traffic

A lack of website traffic can seriously hinder business performance. 89% of B2B buyers use the internet when researching products before making a purchase decision. And nearly four in every five consumers shop online at least once per month.

If a company’s target customers can’t find them online, there’s no way for them to make a purchase or sign up for their services. Even if they have a strong outbound team, the business will struggle to make sales over one that has visibility on search engines and social media platforms.

Shifting Consumer Trends

Customer demand usually plays a huge role in business success. Changes in consumer behavior, tastes, and preferences are often the reason for slow business growth.

When Blockbuster went out of business, it was largely due to the shift from in-store rentals to streaming services. They were even offered a chance to buy Netflix, which they turned down.

For organizations to avoid slow business movement, they need to stay on top of their current customers’ needs (and those of the market at large). Companies need to be able to anticipate, adapt, and respond quickly to changes in consumer behavior.

Tarnished Company Reputation

There are countless instances of business loss due to bad PR. For example:

• Uber’s reputation was damaged due to a string of scandals involving its CEO and senior leadership.
• Facebook faced backlash after the Cambridge Analytica scandal broke, resulting in $134 billion of dollars lost in value.
• United Airlines took a $1.4 billion hit in 2017 after video footage emerged of a customer being forcibly removed from an airplane.

Negative sentiment from the public can cause customers to abandon a company in droves. It can also lead to negative press coverage and difficulty attracting new customers, business partners, or investors.

Seasonality

Many businesses face naturally slow periods. The holiday season, for example, positively or negatively affects sales revenue depending on the industry.

For ecommerce brands, the months of October, November, and December are the busiest and most profitable. A sales team at a B2B SaaS vendor will struggle to close deals during that same period. Many of their potential leads are either completely occupied with other things or tell sales reps to “call me next year.”

Competition

Market disruptors can (and do) pop up in any industry. Some cause major shifts in the customer demand.

For example:

• Uber and Lyft vs. cab companies
• Airbnb vs. traditional hotel chains
• Netflix vs. cable companies

Most are more subtle — for example, a new market entrant that makes a product slightly more tailored to your idea customer profile (ICP).

Economic Downturn

Whether they’re disruptive world events or localized changes, economic pitfalls shift customer sentiment, demand, and spending.

• A massive oil shortage could cause supply chain issues halfway around the world.
• A natural disaster could have devastating local economic effects.
• A housing market crash could cause consumers to cut back on spending, leading to an overall decrease in demand for goods and services.

In these instances, it isn’t just your own company that’s affected. Every organization needs to adapt to slow movement in the market.

How to Leverage a Slow Season to Grow the Business

Slow business is particularly challenging for small businesses because they don’t have the cash reserves or economies of scale to keep up with their larger competitors. The COVID-19 pandemic was a perfect example of this — while larger companies had the resources to weather the storm (or, in some cases, make more money), several small businesses were forced to cease operations for good.

But plenty of successful companies have started during a recession, refined their processes, perfected their product and revenue strategy, and rode the wave up. Disney, for instance, launched right before the Great Depression. More recently, Salesforce and Google launched the year before the dot com bubble burst.

There’s a saying that “anyone can thrive in a good market.” Companies that find a way to succeed during a slow period or economic downturn are the ones that will truly stand out.

Here are some ways to make the most of a slow business season:

Audit business processes and improve operations.

During periods of slow business movement, one of the smartest things businesses can do is look at their current systems. When business is moving quickly, there isn’t much time for new ideas or refining processes.

For B2B vendors the first place to look is the sales process.

• Which pipeline stages are taking the longest?
• How do reps perform on sales calls?
• Where do buyers typically disengage?
• How can you make them more efficient and reduce time to close?
• Are there any manual processes that could be automated or outsourced?

Since slow business is generally characterized by an overstaffed and underworked workforce, this could be the best time to invest in more sales training or create a new sales methodology altogether.

Implement new technology.

When busienss is slow, companies can improve their operational efficiency simply by investing in software-enabled process automation. Take a look at your current tech stack and consider whether there are ways to help your business reach its full potential.

CPQ software is one example of a technology that can help automate and streamline the sales process. It automates otherwise-manual tasks like quoting, product configuration, and contract management. It removes huge amounts of friction from the sales process while speeding up time to close, so sales reps maximize the sales interactions they do have.

Other examples of technology to consider include:

• Marketing automation
• Sales enablement
• Predictive lead scoring
• AI chatbots
• Social media management tools
• Customer data platforms (CDPs)

Essentially, if business is slow, look at areas where the company is spending a lot of unnecessary time. If employees spend a surprising amount of their time on one certain task, chances are it can be automated.

Create new revenue streams.

Whether it’s because your product is seasonal if you just aren’t selling enough to stay afloat, take a close look at what you can do to create additional revenue streams. Depending on how much capital you have, there are plenty of different ways to diversify your customer base or set yourself up nicely for when the situation improves.

Companies with a lot of capital usually find slow business periods are the best time to dive heavily into market research and product R&D. They also use this time to launch new products and services with a few pilot users in the hopes to generate a lot of buzz when the market picks up.

A small business with limited resources should use this time to test out different customer acquisition channels or market segments. Especially if the problem is a dry sales pipeline or poorly executed sales process, this is the perfect time to tweak the approach since there’s a lot less to lose.

Optimize your funnel.

Funnel optimization is all about doubling down on strategies that have been the most successful in the past, cutting out the ones that don’t generate results, and nurturing leads and potential customers that aren’t ready to buy yet.

When a company invests in new software, refines its sales/marketing strategy, and focuses on building a lean and efficient workflow, it’s almost guaranteed to improve its sales funnel efficiency. If your salespeople can generate more leads with the same amount of effort (and keep them engaged), then you have an opportunity to really capitalize on a slow business period.

Nurture the customers you do have.

It costs far less to keep a customer than it does to acquire a new one. That’s why customer retention is key to a sustainable business. This is especially true during slow business periods when fewer people are likely to buy, and existing customers will be more reluctant to experiment or invest in new products.

The fact of the matter is customers won’t stop buying a product they absolutely need, even in a downturn. The key is to continually provide a positive experience and deliver a fantastic product. That way, they’ll always see the value as more than what they’re spending to solve that pain point.

How to Recover from Slow Business and Increase Sales

Coming out on top after a slow business period is all about making smart business decisions and devising a solid plan. You’ll have to look closely at your own business model and determine what strategies will work best for you and your team.

Here are a few basic steps that will put you in the right direction:

1. Analyze the current situation.

Take a hard look at why you’re experiencing slow business in the first place.

If it’s the result of external factors (like an economic downturn), you can’t do much to change that directly. You’ll have to focus on how to adjust your business model to be leaner and more efficient while you plan for the future.

When slow business is the result of an internal issue like a probelmatic sales process, inadequate technology, or poorly-targeted marketing campaigns, you do have a direct impact on the outcome. Take the time to identify the weak links and make changes to your processes as needed.

2. Look at your finances and customer base.

Understanding how much financial support you’ll need will help you create a business plan. If you have a significant amount of working capital at your disposal and stable recurring revenue, you have more freedom to experiment. If overspending is the issue, this is the step where you’ll find what to prioritize as well.

3. Offer loyalty incentives.

Promotions and discounts don’t always work. If they’re poorly executed, they could devalue your product and lower your customers’ expectations once the market picks back up.

Here are a few general rules of thumb to consider:

• Discounts work well for retailers and ecom brands with extra product after their selling season has already passed.
• Penetration pricing is a good way to drive product adoption for a new or less-familiar product when most buyers aren’t looking for anything new.
• SaaS companies should offer 1 month free when a customer pays annually to secure a year’s worth of revenue upfront.
• Manufacturers and wholesalers should offer price breaks to get more inventory moving off the shelves.
• Loyalty programs and exclusive offers/experiences are fantastic for keeping existing customers engaged.

4. Perfect the customer experience.

Times of lower demand or product use mean downtime or a supply shortage is less impactful. Use this opportunity to build up your customer service team and really commit to delivering an outstanding experience.

A few ways to improve the customer experience:

• Invest in great technology that streamlines processes like payment processing, order fulfillment, and customer support.
• Fix or change the company website to be more user-friendly and conversion-optimized.
• Refine the product and test it on small groups of customers.
• Investigate competitors and their customers to figure out how to make your business a more desirable option in the future.
• Use data analytics tools to proactively seek out customer feedback and address any issues before they become a bigger problem.
• Train customer service reps to be experts in your product and ensure they truly understand the customers’ needs.
• Setup a customer feedback system so you can make sure any issues are resolved quickly and efficiently.

5. Quietly develop new business.

Slow business is the perfect time for research and development, product testing, building a following on social media, and exploring new business opportunities (e.g., partnerships). Entrepreneurs who view the situation as an opportunity to expand are more likely to come out ahead once the market turns around.

Take advantage of this time to investigate new customer acquisition channels. While most companies are on the defensive and keeping their heads down, try out different marketing campaigns, and create a presence on social media.

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