By: Brad Shorr, Contributor
One of my sales managers used to say that the best type of competitor is one that is dumb, fat, and happy. Is your business dumb, fat, and happy? If so, by definition, you probably don’t know it, which makes you a sitting duck for hungry competitors. Here are 10 things that may be going wrong that you aren’t aware of — things that will cause your business to unravel.
1. Unmotivated Sales Department. How many hours are your sales reps putting in? How many cold calls are they making every day? Do you really know? Business owners sometimes assume sales reps have the same intensity and work ethic they do. Not always true. This is why it is vital to set clear expectations and monitor activity.
2. Unarmed Sales Department. Even when sales reps share your intensity and work ethic, they will still fail unless you give them the critical tools: high-quality products and services, training and mentoring, effective collateral, customer service support, the ability to follow through on commitments, and a fair and motivating compensation plan.
3. Outdated, Counterproductive Online Marketing. If your search engine optimization (SEO) program hasn’t been updated in the last 3 to 6 months, it could be doing more harm than good. Those pop-up subscription windows on your blog could be driving away readers instead of attracting them. Internet marketing best practices change rapidly; dumb, fat, and happy companies fail to keep up.
4. No Customer-Retention Strategy. Another common marketing problem is putting all the focus on customer acquisition and forgetting about customer retention. This blunder not only hurts revenues, it also causes the cost structure to crumble: Retaining a customer, in terms of sales and marketing effort, is far less expensive than acquiring a new one.
5. Slow Collections. Many businesses are lackadaisical in enforcing their payment terms. Not only do they allow customers an extra 60 or 90 or 120 days to pay, they also fail to assess late payment penalties, fail to take steps to ensure future orders are paid on time, and fail to raise prices to compensate for late payments. When all of this happens, cash flow takes a beating. In time, there won’t be enough cash on hand to make payroll, let alone expand.
6. Poor Credit Screening. If you are so happy to get a new customer that you fail to assess its creditworthiness, your initial intoxication will produce a horrible hangover. One way firms run into collection problems is by extending credit to customers that don’t qualify for it in the first place. Don’t set your business up for failure.
7. Vague Vision. Does every member of your staff clearly understand your company’s vision, values, and priorities? If so, congratulations, because in most cases, every member of the staff and every department has its own interpretation — and many times these interpretations are in direct conflict, undermining morale and results. Effective internal communication must be handled with care.8. Lousy
8. Training. On-the-job training has its advantages, but it shouldn’t be the only training method and it shouldn’t happen haphazardly. Are you sure the people who are training new hires are passing along your company’s vision, values, and priorities? What are you doing for long-term employees to keep their skills up-to-date and prepare them for new challenges and roles? Firms that neglect training put the “dumb” in dumb, fat, and happy.
9. Risk Aversion. Many businesses are so reluctant to take chances that they slam the door on opportunity when it is sitting right in front of them. They fail to recognize those times when taking risks is actually the most pragmatic course of action. For instance, in recent years many small bookstores were devoured by discount chains and then by the Internet. And yet small bookstores that embraced the Internet and developed new marketing channels are still going strong. Which way will your company go?
10. Dabbling. Failure to fully commit is one of the surest ways to fail. Companies think they’re being innovative risk-takers when they jump into social media marketing for a few months, dash off a new mission statement, or play around with a new bonus program. But the devil is in the details, the follow-through, and sustaining emphasis through tactical ups and downs. Companies that bail at the first sign of trouble are destined to sink.