Hot take: Business in a slump? Why you might not want to advertise

If this were just a one-time thing, I wouldn’t be writing a blog about it, but, unfortunately, it’s a pretty common scenario among SMBs. So let’s talk about it.

The reason that the advertising doesn’t work in these cases is likely that something is broken in the business’s customer acquisition funnel. Somewhere along the customer journey from seeing an ad to buying the product or service, there’s a big leak in the pipe… and all the customers are falling out. And if this is the case, you can run all the ads you want and they won’t do you a bit of good. 

After all, advertising won’t work unless you have a product people want at a price people want to pay. (If you want long-term good revenue, that also has to be backed by good service and delivery, but that’s a story for another blog.)

Of course, there are cases where there’s nothing wrong with the customer acquisition funnel, and it’s just a matter of needing to get the word out to more people. In those cases, advertising is absolutely the answer! But your marketing agency should be asking the hard questions and making darn sure that your funnel is working before they sell you on an expensive ad campaign. 

If it’s not a marketing problem, then what is it?

The number of reasons why revenues may have dropped are as numerous as the types of businesses out there, but we’ll take a look at the few most common:

1. Have you made any recent changes to your business? I can’t tell you how many times I’ve had a new client come to me complaining of lower revenues, only for me to learn that they’ve raised their prices recently - thereby pricing themselves out of the market. Other potential triggers: Have you recently hired an outsourced customer service provider that might not be helping your customers as well as the old system did? Did you change your shipping prices? Have you changed a key product design? Any of these tweaks to your business could be the reason revenue is dropping—and advertising alone isn’t going to solve the issue.
2. Has the world changed around you? You might not have made any changes, but what about your competitive landscape? Is there a new competitor that offers what you do, but better or quicker, or less expensively (think taxi companies and Uber)? Are you still expecting potential customers to call or email you when your competitors have a slick online booking or ordering system? Are your shipping times much longer than the instant gratification that companies like Amazon have trained people to expect? Any of these could be turning off new customers. Worse, you may sell a product that people just don’t want anymore. There’s a reason Blockbuster went out of business, after all. 
3. Is your website out of date? If your website is over five years old, it’s going to look dated, no matter how cutting-edge it was when you built it. Even worse if it uses outdated tools, communication channels, booking software, e-commerce software, etc. The ugly truth is that you can very well lose potential clients if your site is too clunky or too hard to use.
4. Do you have bad reviews? Social proof—reviews and testimonials—is a real part of today’s marketing landscape. Too many bad reviews can have a negative impact when it comes to acquiring new customers. If you do, fix the issue that is causing those bad reviews (whether it’s a customer service problem or a product problem), and then invest in a review generation platform to help get a lot more good reviews. And on that note, make sure you answer each and every review you get, good AND bad alike. It’s not only common courtesy, but it shows Google (and the world) that you’re actively engaged in managing your business and that your customers really matter to you. 

This isn’t a comprehensive overview of why your business may be struggling, but it’s a good place to start. Before committing a lot of money to advertising, ask yourself these questions. Try to find the reason why revenues are dropping. Plug the hole. Only then should you reach out for help spreading the word about your fabulous business. 

‍