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Factors Affecting Sales Performance


Any business, whether small or large, should put maximum efforts in expanding sales volume because continuous growth in sales is the only way to survive in the market. To achieve this, a company may introduce new products, promote them through enticing marketing campaigns, offer discounts, and make payment options easier.

Any business that continuously misses its sales goals may be forced to cut off some operations or shut down completely. That’s why it is very important for any business that struggles with sales to quickly determine factors that may be affecting sales and correct them.

Factors that may affect sales performance can be internal or external.

  • Internal factors

These factors originate within the company, and it’s the company that has control over them. They include:

1. The product

One of the top factors that can determine the business’ sales growth is the capital itself. If the product is satisfying customers’ needs at reasonable prices, it will sell. The business should ensure that they maintain the quality of the product and add or modify the functions according to the ever-changing technology and the varying tastes and preferences of the customers.


2. The business’ marketing strategy

The marketing strategy of an organization plays a significant role when it comes to sales. Marketing strategy is all about selecting the correct target audience, positioning the brand, proper pricing, etc. when you do all these correctly, it can make a significant effect on the sales of a product.


3.  The Marketing team

The qualifications and experience of the company’s marketing team are crucial in winning over more consumers. Creating well-defined marketing strategies, promotion ideas, using the right sales enablement platforms, and staying updated with current market trends can help the organization to achieve higher sales volume.


4.  Availability of finance

Availability of adequate capital at critical moments, like when introducing new products, during an expensive campaign, or when switching your manufacturing technology to a more sophisticated one, require a significant amount of money. If the business has the money at its disposal, it can be easy to introduce newer business methods that can positively affect sales.


5.  Technology and automation

Any business that wants to achieve higher sales growth must upgrade their technology. Investing in newer, smarter technology and automating their business processes like electronic payment services, automated order booking, or electronically addressing the customers’ grievances can generate an excellent market base and increase sales.

6.  Availability of suppliers

It’s crucial to build and maintain a good network of suppliers. The availability of raw materials, consumables, and components can affect the sale of a finished product. Getting raw materials at the right time ease the manufacturing process and the delivery of the right quality product in the market.


  • External factors

These are competition, political, economic, and technological forces that affect sales.  The company has no control over them, but they can develop some strategies to respond to them. The external factors include:


1.  Economic cycle

The economy of any country goes through various cycles like growth, expansion, and recession. The demand for a product depends on the economic cycle that the country is currently experiencing.  In the growth phase, the demand is high and customers have more disposable income, while in a recession phase, money is reduced and as well as the demand and supply of a product. Therefore, the economic cycle has an impact on sales.


2.  Consumers’ expectations

Consumers’ tastes and preferences and expectations with regards to prices, new features, packaging, and delivery keep on changing, making a significant impact on demand for a product. The company has no control over these expectations; it can only change its production and marketing methods to meet its consumers’ needs.


3.  Laws and regulations

Ay business has to comply with the demands of laws and regulations of that particular country where it operates. Pronouncements of laws by the government regarding the legality of the product, its minimum pricing requirements, and taxes can affect sales of that particular product. Moreover, advertising restrictions can also affect sales.


4. Competition

The market position of the competitors’ products plays an important role in determining the sales of a particular business’ product in a market. If the competitor has a reputable brand controlling a significant market share, its presence may negatively affect the sales of the rival’s products.


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