From: Stephanie Vega, Strategic Planning Manager
Date: July 20, 2012
Subject: Changing Company’s Sales Focus
Contractors Department has been functioning for over 5 years and our friendly and knowledgeable staff always was on top of customer service. Recent reports show that we’ve had relatively stable revenue in past year but no increase in comparison to the years of 2008-2010. However, we all know that it takes a great effort to hold a business at steady state. It’s either growing or shrinking. We offered laminate floor services for the first time in 2008 and became the leading flooring company in Aberdeen. We had no difficulties maintaining this status for 2,5 years but our competitor’s recent activities made us take 6th place in the rating of best flooring companies in the region. Furthermore, a week ago we have received a letter from Super Floors LLC in which they expresses their desire to buy our company. Despite the fact that the company does not operate at a loss, we must admit that the situation is bad enough and requires our immediate action. Maintaining the status is not a solution for our business. At this time we need to take radical actions to improve the condition of the company. This drop is not acceptable for us as we already have noticed a significant decrease in number of customers.
Our marketing sales plan needs to be revised and some changes to be made. Successful and systematic development of our enterprise depends on many factors, but one of the most fundamental is to build our client base. Contractor’s Department is known for providing a wide range of services, from carpeting to installing cork floors. Nevertheless, trend and tendencies in today’s market have put many pressures on us to reevaluate our business plan.
First thing to emphasize is that our business must have distinctive features. Any business that is ordinary in every respect will never be able to withstand the strikes of competition. It will only struggle to stay afloat. New business ideas are the key to success, that’s why I suggest that we start doing something none of our competitors yet do. That is using floor heating systems. When compared with gas radiant heating, combining underfloor heating with renewable energy can bring a 40-50% saving in heating costs.(Allison,17).With the cost of energy skyrocketing, this could be a major revenue enhancing plan.
Problem with current services
Our company currently offers installation of carpets, natural hardwood flooring, ceramic and natural stone tiles, and laminate flooring. The comparative research on our competitors’ services and prices was done by our PR manager at the beginning of last quarter and it showed that our place in the market of flooring services is far behind other firms. The average company has approximately 250 orders per month while we average 195. Likewise, their usual order totals at around £5000 to compare with our average order of £3,500. If we keep on running our business using the same old strategy we are going to be at great risk of operating at loss and a possible future shutdown. Business Performance Innovation Network states that most companies lose 50% of their customers every 5 years. Attracting new customers is for the company is from 7 to 10 times more expensive than keeping current ones and only one out of the 10 potential customers becomes a buyer. (BPI statistics, 2012)
These official statistics are not encouraging for businesses in general but psychological research shows that the main source of failure is the expectation of failure. Businessman deprived of faith in his abilities, his products or his company has no chance to succeed from the beginning. Very few people are endowed with a desire for originality. On their own the people are ordinary and do not see significant value in giving their business originality.
To avoid this unfortunate situation we need to be different from any other