One thing that is overlooked in this statistic is the high physical, emotional, and financial cost of each failure. I have watched as clients of mine who were forced to close their businesses suffer through divorce, depression, embarrassment, loss of their life savings, loss of friendships, and arguments with family members who have often invested in those businesses.
In my experience, the number one cause of business failure is that the business owner didn’t have a systematic and proven sales process for increasing leads that are then converted into paying customers. They also had no idea what their gateway products were, what their unique selling position was, what their closing rate was for their sales staff, who their most profitable customers were, or what their most profitable products were. Worse yet, they often don’t know what these things are or why they are important.
Too many failed businesses concentrated more on selecting their business cards, stationery, and office furniture than they did on the following four things that would have almost certainly guaranteed their success:
- Marketing and lead generation. Successful business owners have a direct response marketing plan that consistently entices prospects to call, email, or visit their business.
- Sales and conversion. Successful business owners have a scripted plan and consistent sales staff training designed to convert prospects into customers. They leave nothing to chance, and they don’t do anything that doesn’t produce measurable results.
- Upselling and cross-selling. Successful business owners have a plan to upsell and cross-sell to customers at every step of the sales process.
- Client retention and follow-up. Successful business owners actively work on client retention with frequent follow-up after a sale. Many of them use monthly newsletters as a no-fuss way to accomplish this.
- Referral generation. Successful business owners have an active plan to get their best customers to refer them to their friends. They do not leave this chance or just wait for it to happen naturally.
Sadly, I have many business clients who seem to have given up and accepted that their businesses have stagnated and are in trouble. They just don’t seem interested in doing the hard work needed to get their marketing in shape and become leaders in their niches. Trust me, it is a lot more fun to run a profitable business than one that is barely hanging on.
So, when are you going to start concentrating on improving your marketing?