How to cope with a dip in demand for your product
When you first decide to start a business, you probably already know to research your target market and make sure there’s enough demand for your product to at least get things off the ground. Making sure you have a solid selling point for your stock or service is so important. It builds the foundations of your company and affects how well you perform in the future.
But even if you’re 100% confident with what you’re offering, it can still be difficult to judge whether your business will be popular with customers in months or years to come. And no matter how thoroughly you plan for the future, you might find demand waxing and waning over time and your revenue taking a hit as a result.
But what can you do if you find yourself in this situation? How can you ensure you’re still bringing in money and attracting customers? Here are some pointers to help you out.
What can cause a dip in demand?
Sometimes it helps to unpack why there might be a lack of interest in a product you’re selling and what kind of dip you’re experiencing. If you’ve always struggled with reeling customers in, then you might want to do some extra research into your target market to find out what they want or need from you.
But if you’ve been enjoying regular custom and notice a sudden dip, there might be a few factors to blame. This can be especially tough if business has been booming but demand has suddenly shifted. This type of change can happen at any time and can also depend on what you’re offering.
For example, think of how seasonal businesses face changes in demand. Christmas Tree farm owners will be working tirelessly all year round tending the trees, but they likely won’t be getting any revenue until November and December when customer demand is there.
Ice rinks, snow shovelling businesses and gift-wrapping services are other examples of companies that thrive during winter. The same can be said for pumpkin farms, scare mazes and other Halloween-themed businesses, demand for them only ramps up when October hits.
On the other hand, al fresco dining cafes, swimwear stores, garden maintenance businesses and rentable food trucks are examples of businesses that see a hike in demand over the summer. So, you see the time of year can have a huge impact on demand. But the following factors can affect it too.
It really depends on what kind of product you’re selling as to whether price changes will directly cause a drop in demand.
As a general rule, unless your product is something that people need, you’ll likely see a fall in custom if you increase cost too much too fast. But take supermarket necessities like bread and milk as an example. Demand probably won’t drop dramatically (if at all) when prices go up - people need these essentials and will usually still buy whatever the price is. Also, when the cost of these items increases at one outlet, it usually follows that prices go up across all the major retailers.
But if you sell speciality handmade candles (or a similar item not deemed a ‘necessity’) you may well see a drop in sales if you put prices up too much. If you suddenly hike up the cost of a candle to £20 from £15, you might see an automatic demand drop as customers compare your prices with other retailers and choose cheaper options.
2. Income levels
Disposable income levels have a huge effect on demand. If customers have more disposable income, they’re likely to spend on ‘non-essential’ things like clothes, eating out, going to the cinema and salon treatments.
When income falls (like now due to the cost-of-living crisis) there’s usually a decrease in demand for most goods because people are having to spend on essentials like food, petrol and traveling to work.
3. Consumer tastes and preferences
Customer tastes change over time and products that were once popular don’t always stay that way. Just look at the amount of chocolate bars that have been discontinued over the years despite being initially popular (think Echo bars, Mingles and Mars Delight)
Good advertising plays a part in fuelling the interest of customers and keeping it high. The whole point of good marketing is to make customers want what a particular brand is selling and keep demand up. A good example of this is the light up gin M&S sell at Christmas. When it was first introduced a few years ago, there was a media frenzy as shoppers rushed to their local stores. It was almost impossible to nab one because of clever advertising and the fact it was labelled ‘limited edition’. Demand was high because the gin was so sought after and difficult to find. But, over the following years, demand has dropped and now you can easily get one at Christmas-time.
Your competitors are always on the hunt to reel in customers and encourage them to pick their product over yours. So often they will introduce a similar product and make it a little cheaper. Look at the ‘Colin the Caterpillar’ social media war between Aldi and M&S for example. A cheaper product of the same quality will likely be more popular than its more expensive alternative.
5. Changing fashions
Another thing that can affect demand is changing fashions. When a product becomes unfashionable, demand can automatically decrease. Something that affects this heavily is social media. TikTok and Instagram are great platforms to endorse products on, influencers who have a huge following can create a massive demand for certain products. Followers will buy the product because their favourite influencer also uses it. If it is deemed unpopular then in turn demand can decrease.
How can you fix low demand?
Now you know what can affect demand, how do you fix the issue when you notice customers aren’t excited about your products anymore? Although you can’t magically create demand for your product or service, you can try a few things to boost sales.
Freshen up your products in line with competitors
First of all, you want to make sure your product or service is appealing to customers. Even if it was a hit to start with, you need to constantly be moving with the times and updating as you go. Offer a fresh new take on your product or improve it in a unique way.
For example, nail bars are now pressured to offer new and cutting-edge treatments. Nowadays it’s not usually enough just to offer file and paint jobs. A lot of salons have upped their game by offering gel nail treatments, eyebrow tinting and eyelash extensions. Salon owners see what their competitors are offering and assess what else their nail customers might be interested in, adapting from there.
Introduce a whole new product
This may not be viable for every business, but you could try launching something completely new to get attention back on your business. It doesn’t have to be anything huge though. Say you run a coffee shop, maybe you could whip up some hype by introducing a new latte flavour. If you have a cosmetics boutique, then come up with a lipstick or eyeshadow pallet in a new shade ready for summer/autumn/winter.
No matter how little the change, if customers see you’re showing off something new they’re likely to be re-intrigued by your business.
Upselling is a great way to increase spending in your store but will only work if you have a pool of existing customers.
When customers buy your products, subtly try to get them to purchase another complimentary item or opt for the pricier version. A good way to do this is to have key items you want to sell at the till or positioned when customers are queuing.
Another is to introduce clever deals like ‘buy two get one half price’. Even though the third item will be discounted, the customer will still be spending more than if they were to just buy the one product.
Marketing is key to driving sales and creating demand for your products. When you see a dip, you need to work hard to convince people they need or want what you are selling. It’s all about communicating the value of your business.
Again, social media is great for tapping into your customer base and driving demand with fun graphics, posts and ‘get now before it’s gone’ messaging.
But you could also try reaching out to your existing customers via email campaigns too. Give them a nudge to purchase a new product or offer a small discount/reward for being a valuable supporter. Think about your wording, phrases like ‘last chance to buy’, ‘limited edition’ or ‘back for a short time due to popular demand’ are great for piquing interest and inadvertently creating demand.
Putting on promotions and creating a ‘get it before it’s gone’ mentality will encourage your customers to spend. If they think this is the last chance to bag a bargain or snatch up your product, they’ll be more likely to part with their money.
Carry out demonstrations
A great way to create demand for your product is to show (not tell) people what you offer. In store demonstrations of how to use key items are great for this. Think about how supermarkets often have tasting stalls for new products or how technology shops let customers try out iPads, phones and TVs before purchase. But if you don’t have the capacity for in-store demonstrations, social media can work just as well.
For example, say you were a quirky clothing store trying to drum up interest. You could upload a social reel or video showing how to style a specific piece of clothing you sell. If it was a skirt, you could pair it with tights, boots and a jumper ready for winter or show a more summery look; sandals, a complimenting top and a lightweight jacket for warmer months.
Partner with other brands or influencers
As we briefly mentioned before, influencers can be a huge asset to businesses and help create demand for a product, they ‘influence’ people after all. But partnerships don’t just have to be with social media personalities or accounts with a big following.
Say you were a bespoke food truck that attended local events, serving ‘festival food’ like burgers, pizza and hot dogs. You could partner with a local brewery and serve their beverages and create a unique partnership.
It would also work well if you were the hypothetical salon owner we mentioned earlier, you could rent out your space to a local makeup artist and offer your combined services in one place.
Partnerships can really help increase demand because not only are you offering something fresh and new, but you get access to each other’s target audience. It helps tap into potential customers you might not have been able to access before.
A real-life example of this is bath bomb shop LUSH and their current partnerships with big movie franchises like The SpongeBob SquarePants Movie or Mario Bros. Their ‘limited edition’ bath bombs and shower gels not only attract current LUSH customers wanting to try something new, but also taps into fans of both those movies.
How can Bionic help you boost your business?
Coping with low demand for products can be frustrating but hopefully this blog has given you a few ideas on how to increase interest.
Although Bionic can’t boost demand for you, we can help with other hassles that come with being a busy business owner. Our team can compare and help you switch business energy, phone and broadband deals.