Analyzing and Adjusting Strategies When Sales Fall Below Forecast in January
January is crucial for businesses as they set the tone for the rest of the year. I enjoyed delivering live keynotes at sales kick-off events as teams are getting back together often for the first time in three years. Leaders share their vision, goals are sent out, and sales teams execute. Several leaders I work with expect this year to be a bumpy ride in terms of monthly revenue. However, when sales fall below forecasted numbers, adopting a proactive approach to understanding the reasons and implementing strategies to turn the situation around is essential.
1. Conduct a Comprehensive Analysis:
Begin by thoroughly analyzing the factors contributing to the lower-than-expected sales. Consider external factors like economic conditions, market trends, and competition, as well as internal factors such as marketing effectiveness, product positioning, and customer feedback. It sounds like an obvious question, but leaders often fail to ask: Do your salespeople have the skills to execute the sales plan this year? We often find sales skills gaps that are preventing salespeople from hitting their KPIs. It is not unusual to assess a sales team and find that 20% of the team members in quota-carrying roles do not want to be in sales and lack the skills and motivation to achieve their goals. We can coach and train these people up or move them to other roles where they can add more value.
2. Evaluate Marketing Strategies:
Review your marketing strategies to identify any gaps or areas for improvement. Assess the performance of your advertising campaigns, social media presence, and promotional activities. If certain channels or campaigns are not delivering the expected results, consider reallocating resources or adjusting your approach. In a recent study, 33% of buyers chose not to engage with salespeople. They are doing their research and engaging directly with companies they feel that can help solve their challenges. We must ensure your website has strong content about the problems you solve for customers today and several case studies and examples of success stories.
3. Reassess Product Positioning:
Evaluate how well your products align with current market demands and consumer preferences. Here, we often conduct voice-of-customer research. We interview your top customers who deliver 80% of your net income, other customers, inactive customers, and new prospects you quoted but did not win. We gather insights about how your customers buy, why they buy, and why they buy from your competitors. If necessary, we refine your product positioning or explore new features that can enhance their appeal. We often equip and train salespeople with persona-based messaging for the top decision-makers in purchasing your product or service. Customer feedback and market research can provide valuable insights into potential adjustments.
4. Engage with Customers:
Reach out to your customers for feedback on their purchasing decisions. We ask for their forecasts based on what their business is experiencing. Here, we train salespeople in discovery and qualifying skills to help uncover challenges your customers have that your team can solve. Understanding their needs, preferences, and concerns can help you tailor your products and services to meet their expectations better. Consider having a third party gather these insights for you, as I shared in my new book, Voice Of Customer, a no-smoke-and-mirrors approach to driving profitable growth. Your leadership team will have actionable insights to adjust your plan strategically.
5. Review Sales Team Performance:
Assess the performance of your sales team to identify areas of improvement. Provide additional training, resources, or support where needed. Collaborate with the team to gather insights into customer interactions, objections, and challenges they may face in the sales process. We often assess customer-facing roles and determine their sales strengths, skills gaps, motivations, and beliefs. We also look for structural alignment. Do you have the right people in the right roles with the right skills? We close gaps with training, coaching, and often new sales tools if we discover gaps.
6. Adjust Inventory Management:
Ensure that your inventory levels are aligned with actual demand. If you overestimated the demand for certain products, consider adjusting production or implementing promotional strategies to clear excess inventory. On the other hand, if popular items are consistently out of stock, explore options to streamline the supply chain. If our voice of customer interviews discovered your competitors are delivering in four weeks. Your team is delivering in six to eight weeks, and order turnaround was a key buying criterion; we identified the constraints and developed a manufacturing plan to meet customer expectations.
7. Implement Incentives and Promotions:
Introduce short-term incentives or promotions to stimulate sales. Bundled offers or loyalty programs can encourage customers to make purchases during the period when sales are lagging. Ensure that these promotions align with your overall business goals and financial considerations. My clients who sell through channel partners often launch thematic sales incentive programs to encourage the salespeople at their channel partners to sell their products.
8. Plan for Future Months:
We often help clients perform a sales pipeline audit and develop a revised sales forecast based on the insights gained from the analysis. Use this updated forecast to guide your strategies for the upcoming months. Adjust budgets, marketing plans, and operational activities to align with the new projections.
Facing lower-than-expected sales in January is a challenge that often occurs, but by conducting a thorough analysis, reassessing strategies, and engaging with customers and your team, you can position your business for a successful recovery.
You have time to adjust, improve sales results, and fix common sales problems. Flexibility, adaptability, and a proactive mindset are key to navigating challenges and ensuring long-term success.
We strongly encourage you to act.
Some companies will do nothing, hoping January was just an odd month and February and March will be much stronger. Our challenge to teams that take this approach is: what if there is a fundamental gap in your strategy, skills, or plan? Why wait three months to fix a sales problem and hurt your revenue year? Why allow your sales plan to fall even deeper behind the plan?
Let’s schedule a call if your team missed the January sales plan, and we can help your team get back on track to end this year with strong revenue and profit growth.
