BUSINESS LAB · EVIDENCE BEFORE TACTICS

Why are your sales dropping? Separate demand, conversion and capacity.

Break the sales change into comparable periods, customer groups, purchase frequency, volume and realized prices. Lower sales can come from demand, conversion, retention, availability or accounting timing. Find where the change occurred before increasing advertising or cutting prices. Revenue, margin and cash may move in different directions.

By Sarah Mck, founder and owner of Business Lab.

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Competing explanations to investigate

Fewer suitable new customers enter the buying process, or an important channel changes.
Conversion falls because of the offer, buying experience, response or availability.
Repeat purchases weaken, a large client leaves or the sales mix changes.
Stock, delivery capacity, invoicing or collection timing distorts the comparison.

What evidence do you need?

Use consistent revenue definitions and compare a relevant period with an earlier comparable one. Separate one-off contracts, seasonality, discounts, returns and lost customers. Review units sold and realized price, not only the total. Map the decline by channel, product and customer group where the records support it. Label estimates and gaps rather than filling them with a preferred explanation.

A limited first test

Investigate the segment that explains the largest credible part of the decline. If availability fell, test the supported supply or scheduling cause. If suitable enquiries declined while conversion stayed stable, investigate demand and source changes. Preserve working areas while testing the suspected constraint.

How to decide what happens next

Judge a response by its effect on contribution, customer experience and the ability to deliver, not only a temporary revenue increase. A large discount can conceal a deeper problem. If the decline threatens obligations or available cash, coordinate the operating review with appropriate accounting support rather than relying on a marketing dashboard.

Frequently asked questions

Should I advertise more when sales fall?

Only if the evidence supports insufficient suitable demand and the business can acquire and serve it affordably.

How do I separate seasonality from a problem?

Compare relevant prior periods and segments, and record other changes. A single short comparison may be misleading.

Can revenue fall while profit improves?

Yes. A change in sales mix, discounts or costs can alter contribution and profit. Check both rather than assuming they move together.

Start with the right question.

The introductory call clarifies your challenge and checks fit. It is not a full diagnosis. Outcomes depend on your business and implementation.