5 signs your business needs to change course

 Long before a hurricane strikes, meteorologists can detect changes in deep-sea temperatures that indicate when and where a storm might hit. Similarly, executives can forecast the future relevance of their market offerings by looking for certain signs. These subtle, easily overlooked signs can indicate that a company is headed for choppy waters and it’s time to change course. Here are five signs to look for:

1. Customers ask for shorter contracts

If many of your customers start asking you for shorter contracts — even if that means paying more for your services — it can indicate that they feel uncertain about the future or sense volatility in the market. Businesses that notice this trend need to consider how to position themselves as a better long-term solution to a problem.

2. Talent Trends

When competitors poach your employees, they want to save time. Your ex-employees take your customer knowledge, what you have trained them to do and any industry knowledge they gained while working for you. Competitors poach your people when they perceive their value as higher than you see it. Often companies believe that customers look at their products as a commodity, paying the lowest price. Likewise, the price we are willing to pay our employees reflects a commoditization parallel. This is a data point, not a criticism, and could signal the need for change.

3. Innovation stalls

If innovation in your industry has slowed or stalled, it can indicate that market demand is decreasing or expected to decrease. Meanwhile, if interest in meeting or anticipating customer demand slows, it can indicate that the market is saturated or customers are taking a different approach to the problem you have solved in the past. Smart businesses perceive this trend and plan accordingly.

4. Buying behavior changes

Buying processes dictate selling processes — not the other way around. When prospects and customers in your category of products/services change their purchasing process, it can indicate that they believe that maximum value has been defined and price is the only differentiator. This shows up in bids, RFPs, reverse auctions and other purchasing mechanisms that distance the seller from the user of the product/service.

5. You experience a ‘referral drought’

A “referral drought” is when your customers can’t think of anyone else who needs your products or services. There are a number of reasons why this can happen: Your customers have exhausted their contacts. Your customers have had problems with your company and don’t want to confront you. Your customers are too busy. Or it’s inconvenient for your customers to make a referral. If none of these explanations are true, however, then you may have an outdated product or service— which means it’s time to make a change. Don’t risk the future success of your business by overlooking these signs. If you watch for these indicators, you’ll know when to adapt your business and how to gain an advantage in the marketplace.

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