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August 28, 2005
My take on "seasonal revenue fluctuations".
I have somewhat of a radical attitude toward seasonal sales and revenue fluctuations. I believe that more often than not companies and people use typical seasonal changes as an excuse to not perform up to their own expectations. The web hosting industry, as much as many other online markets tend to have weaker sales numbers during the summer months as well as between Thanksgiving and New Years Day. Now I look at these typically slow times as tremendous opportunities to find out was exactly triggers consumer behavior to change during those times.
I have spend and continue to spend a significant amount of time to study consumer behavior, seasonal sales cycles, purchase considerations, and what I call "trigger events" (what exactly triggers a purchase decision). IMHO many companies, and mine are no different at times, simply don't gear up and face the challenges early on. They simply accept the "inevitable"; which is certainly not the natural entrepreneurial behavior pattern! Think about it; if you stand in the middle of a street and you know a car approaches, yet you continue to stay in your spot without moving until the car hits you, that wouldn't necessarily qualify you for the Genius Hall of Fame. You'd move because you know well in advance what this car is going to do to your health should you decide to "accept the inevitable". As with many "inevitable" things in your life a season drop in sales is only inevitable if you don't "move out of its way" early enough.
Now, you might ask: "But it has always been that way; what can we do"? Well, specific details depend, of course, on the business you are in, but generally speaking there are several basic techniques you could apply to make it through your traditionally slow times without getting “hit”.
1. Get to know your customers and prospects ahead of time. That way you can leverage your consumer knowledge the moment you see “the car coming”.
2. Tap into your customer base by up-selling them, assuming you have the Loyalty Factor on your side. If not, you have a fundamental problem that goes way beyond seasonal fluctuations.
3. Get much more aggressive with your pricing policy and specials.
4. Incentivize your sales staff (a mix of 2 and 3 work even better).
5. Adjust your thinking in regards to where your customers make their purchase decisions and try to get in front of them at their “new place” (i.e. during the day a hot dogs stand’s regular spot is in front major office buildings, but at night it moves to the exit of a sports stadium or a concert venue). Be where your customers make their purchase decision!
The list is by no means complete and should only serve as a general concept and a motivator to get you thinking about your counter attacks rarly on to avoid your typical seasonal “beating”. If you have any other interesting ideas, feel free to comment.
Posted by Ben at August 28, 2005 04:15 PM