Is Your Demand Down, or Your Distribution Dying?

Is Your Demand Down, or Your Distribution Dying?

For many firms, happy days are not here again. If your sales haven’t grown past 2007 levels, it’s not useful to keep blaming the recession. Your service may be great, your sales people proactive, and your marketing on-message, but if you aren’t seeing results, something is wrong. Here are some examples:

  • A mortgage originator survives the market crash only to watch sales trickle back while competitors report double digit increases
  • A search firm transitions to temporary placements to combat the jobless recovery but doesn’t grow proportionately as their clients’ overall hiring grows.
  • An old-line construction firm’s new “green projects group” gets little traction while new firms grow fast.

Why didn’t they grow? What are they missing? Is their demand down or their distribution dying? Knowing whether your firm has a demand problem or a distribution problem is critical because the solutions are so different.

If the demand for your firm’s products and services is declining, you know it’s time to create new products and services or target new markets. Before investing in this, here are three signs your demand is down

  • Your customers’ customers are not healthy. Understand how your customers’ sales force is faring. Commercial real estate, for example, has been slow turning around. If you sell products and services that developers buy, it is unlikely 2015 will be a great year for your firm.
  • All your competition is suffering. Ask your most innovative competitors, “How’s business?” If you listen carefully to their answers, you can learn if their business is hurting and not for their lack of innovation.
  • Substitutes and cheaper alternatives aren’t selling. If your buyers aren’t favoring imports or Do-it-Yourself solutions, your premium offer is in trouble.

If demand for your firm’s products and services is strong but they aren’t buying from you or your traditional competitors, you need new distribution channels. Here are three signs to confirm this.

  • The Internet is working for your competitor. Despite your disrespect for how the web commoditizes what your firm sells, your prospects and customers may no longer value your premium service.
  • Your sales reps can’t get customer appointments. Your customers are growing but their buyers keep getting younger and won’t make time for your firm.
  • Suppliers and distributors are now your competitors. Your customers and vendors are connecting with each other and don’t seem to need you.

Too often firms assume they have a demand problem. Often it’s their dying distribution. Learn which it is and you can confidently invest in the right solution.

Look at my recent video, Do You Have a Demand or a Distribution Problem