It can be argued that periodic downturns are endemic to the business cycle. Companies large and small will eventually suffer through a downturn, a slump, in sales revenues and profit. A slump is always worrisome but some are seasonable and therefore predictable. That means you can prepare.

Landscaping services expect the demand for lawn and garden maintenance to drop during the winter months. To supplement cash-flow and position the company for year-round customer value, owners of landscaping concerns are known to retool for snow removal when gardens are dormant.

But for most businesses, unfortunately, a slump will occur unexpectedly and for no immediately obvious reason, such as the appearance of a competitor or a difficult economy. If the struggling business is to survive, corrective action must be taken soon. Reversing a sales trend that’s negative or flat is a formidable challenge, a high-stakes test of the resoucefulness and strategic vision of the company leadership. A turnaound, rather a bigger deal than a pivot, may be needed to turn the tide. Or not.

Freelancers typically do not have the financial wherewithal to bring in a management consultant to diagnose the problem and recommend solutions. Freelance consultants need a Do It Yourself remedy and that’s what we’ll talk about today. As usual, the solution you seek will probably be found in data and knowledge you already own and have access to. Your company’s Key Performance Indicators (determine which ones tell the story) and revelations shared by your customers will most likely steer you to both the correct diagnosis plus cost-effective strategies to halt the slump and stimulate revenue.

When to respond

A slump may be a sudden or gradual phenomenon and caused by any number of factors, including a national or regional economic downturn, the introduction of a compelling new technology, a large-scale health crisis, even a vote in your state legislature. If your top line gross revenues show a decline of 10 % or more (or flatline) for three consecutive months and you are unable to understand why revenue is dropping, recognize that your business is in a slump and you cannot ignore the problem.

The cause

If you’re in a slump, it’s important to identify the cause (single or plural). Did something happen in the industry, or in the local or national economy (like a widespread or a war)? Has business been adversely impacted by the shift to Work From Home, because your customers are no longer in the office five days a week and connecting with them has become difficult? Whatever the cause may be, it’s important to know what went wrong and decide if a work-around would make sense, or if a fundamental change should be made. In some cases, it will be necessary to assess your entire operation. It will be wise to consider the following possibilities:

• Evolving customer tastes or priorities
• Business model weakness
• Powerful competitor
• Economic factors

The cure

You will likely find that customer feedback is essential to the discovery process. Seeking out the wisdom that your customers can provide will guarantee that you’ll develop a more nuanced and sophisticated understanding of the marketplace and that understanding will lead to an effective solution. A more nuanced understanding of the marketplace can also help you to develop products and services that customers actually want and need.

When preparing to reach out to your customers, make contact through various channels—emails, call-outs in your blog or newsletter, calls-to-action posted to your website and social media platforms. Customer surveys and invitations to join (30-60 minute) conference or video calls can yield a wealth of boots-on-the-ground insights and you’ll be almost certain to obtain actionable information. Reddit, Twitter, Facebook and LinkedIn are ideal venues for this type of research. For example, Twitter Spaces is a feature that allows users to create a chatroom-like environment with a group of people.

Keep in mind, however, that while customer feedback can be very helpful as you search for the cause of your business slump and can as well be very useful as you engineer a pivot or a turnaround for the business, blindly following customer suggestions is not recommended. The customers’ money is not on the line and neither do they see the big picture of the business and its challenges-—you do. Have the confidence to use your own judgment and expertise to make what you interpret as the best decisions for your entity.

In sum, good KPI data and customer feedback should be essential components of any business’s intention to understand and resolve a significant business challenge. An assessment of business conditions, industry trends and customer feedback re: their priorities, goals and preferences can inform any tweaking of products or services you might undertake, the pivot or turnaround you may follow to pull the business back from the brink and position your venture for the greatest success its ever experienced.

Thanks for reading,

Kim

Image: © AF Archive/Alamy. John Dimech (as Daud) struggles to escape quicksand in Lawrence of Arabia (1962).