The vicious circle of sales in SMEs: a death trap

The vicious circle of sales in SMEs: a death trap
The vicious circle of sales in SMEs: a death trap

My SME does not sell. I hire sellers hoping they will solve the problem. My expectation of immediate results and the level of pressure on sellers increases. My cost increases but I still don’t see the expected results. My SME does not sell, and the cycle repeats itself. I am trapped in a death trap that takes away my resources and leaves me without the courage to move forward.

According to Hubspot’s “2024 Sales Trends Report,” of nearly 1,500 sales professionals surveyed around the world, 54% say selling has been more difficult this year than before. Faced with this setback, entrepreneurs are more vulnerable to becoming easy prey to fall into the trap.

So what to do to get out of this cycle of continuous frustration? To find an answer, let’s start by understanding what happens within each interrelated stage of the vicious circle and why we make decisions that at the time seem to be the right ones but ultimately contribute to feeding back into the trap.

The circle begins with a lack of sales. Particularly in Argentina, SME retail sales accumulated a drop of 16.2% in the first five months of the year and registered a drop of 7.3% in May compared to the same month in 2023, according to the Argentine Confederation of Medium Enterprises ( CAME).

The reasons can be diverse, from the economic situation, the lack of brand visibility, market saturation, to a product or service that does not meet the customer’s needs.

I hire sellers hoping they solve the problem:

In the face of desperation, we look for short-term solutions that keep us afloat and manage to reverse the situation, with hiring new sellers being the most common option. But although it sometimes seems otherwise, not everything in life governs under the rules of direct proportionality, and a greater number of professionals does not necessarily mean a greater number of sales.

My expectation of immediate results increases and the level of pressure on sellers increases.

Waiting for quick results creates an atmosphere of pressure and stress. This ends up being counterproductive, because, according to Gallup data, teams whose employees have low commitment have 21% lower profitability. Although the expectation of results is understandable, because the survival of the business seems to depend on its speed, we must not forget that sales require time, commitment and, above all, strategy.

Increases the cost, without seeing the expected results

As time passes and sales do not increase as expected, the costs associated with maintaining equipment become a heavy burden. Salaries, commissions, training and other related expenses begin to pile up, increasing the perception that salespeople are not performing.

My SME does not sell, and the cycle repeats itself

In the end, the SME still does not sell, closing the cycle and restarting the process in the hope that this time it will be different. However, if there is no strategic change that addresses the root of the problem, the vicious cycle will begin again, deepening even further.

Breaking the Cycle

The key to getting out of the deadly plot once and for all is to adopt a strategic, comprehensive and long-term vision. Before hiring sellers, a deep diagnosis must be carried out to understand the true reasons that cause the circle: why is my SME not selling? Is it a problem with the brand, the product, or the market? Am I reaching the right target audience?

When we have prepared the diagnosis of the SME, the next step is to develop a solid and systematized sales strategy, essential to survive in the long term. According to information from the Organization for Economic Cooperation and Development (OECD), 58% of companies in developed countries have standardized processes, while in Latin America only 36%. If the lack of standardization of processes is added to the economic instability characteristic of many countries in the region, business development becomes much more difficult, and there is a risk of falling into the trap again.

I know, from experience, that in these countries the immediacy of the situation often clouds the vision of SME entrepreneurs. Many will say that there is no time to build a long-term strategy, because the priority is survival. But the truth is that this standardization works as a buffer for moments of crisis, because it provides financial health that is solid enough to overcome market fluctuations.

Sales expert and founder of Lay Us

Source: Ambito

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