10 main reasons for low profits
Many companies have low profits, are on the verge of bankruptcy and are waiting for a miracle. This has even become the norm for some. This happens for years, sometimes even decades, but no miracle happens. Before the crisis, there was still extra money in the economy, which somehow saved the situation. But a crisis has come, extra money is becoming less and less, and therefore the situation is getting harder and harder and in order to get out of it you first need to find the reasons for low profits.
The situation itself will not be resolved, so it’s time to take active steps. To take action, you first need to find out the reason, or rather the reasons for low profits. There are many of them, but there are major ones that give the maximum contribution to the decline in profits, including a number of other negative points. It is with their elimination that it is advisable to start everything.
… the first reason for low profits is subjective advertising, which is done without reliance on the market and needs …
So, we begin to determine the causes of low profits. The first of these is subjective advertising, which is done without reliance on the market and needs, but on the basis of considerations of the specialist who deals with it. He decides what should be advertising. Analysis of the market and needs, the use of technology – are not assumed. In fact, an expert makes an advertisement for himself, namely himself, having in mind as the recipient of an advertising message.
Main source of problems
reason for low profits
He regards his psychological portrait and his needs as a base and focuses on them. Many people do not react to such advertising or even react negatively. As a result, there are no sales, and the reputation is spoiled, which further aggravates the situation. By itself, advertising is the revitalization of embedded ideas. But not those that are embedded in the specialist, but those that are embedded in the consumer. To get an objective advertising – they need to learn and know.
Anything that does not lead to the activation of the idea – psevdoreklama
The second reason is pseudo-advertising. As mentioned above, the real advertising is the activation of the ideas introduced into the buyers. If ideas are not active, a person does not need anything, he is in a state of complete satisfaction and happiness. In order for a person to want something, it is necessary to activate embedded ideas in it and this is done just by means of advertising. Only when an idea in a person is active, he wants to realize it, and for this he needs a product or service, which are ways to implement the idea.
Only a real activation of the idea – this is advertising. Anything that does not lead to the activation of the idea is pseudo-advertising. It is bad because it does not create needs, does not create the desire to buy a product or service and thus does not sell. Psevdoreklama – a kind of slot machine from the casino, which slowly but surely eats up your money. So we can safely say that many of the reasons for low profits are closely related to poor advertising.
The main reasons for low profits
reason for low profits
The third reason is non-targeted advertising, which creates customers not for you, but for other companies, including competitors. With this approach, you spend your money on activating other people’s ideas, not getting into your target ideas, but foreign ones, as a result of which a demand is created for goods and services of other companies. These companies get free customers and thereby increase their profits at your expense, while you either get low profits or not at all.
This is a very common situation and it is due to the fact that there are no preliminary studies to establish exactly which ideas need to be activated to create demand for your goods and services. The situation is paradoxical, because there seems to be a revitalization of ideas, but there are no sales, and seemingly, if you don’t know your target ideas, everything looks like real advertising, which complicates the search for the causes of low profits.
The fourth reason is unprincipled advertising.
The fourth reason is unprincipled advertising. As mentioned above, advertising is the activation of an idea. One idea can only be activated by another idea. But very often attempts are made to activate the idea with thoughts. Everything is done correctly, according to technology, but instead of an idea a thought is transmitted. Money and time are spent on getting it and arranging it in communication. Moreover, it is planned to return the money by creating needs and, accordingly, sales.
No market means no profit
reason for low profits
But this does not happen, because thought cannot activate the idea and cannot create a consumer; it can create only a like-minded person. As a result, the company incurs costs that are not refundable. This accordingly reduces the profit as a whole at the expense of expenses, and also eats up the possible profit from sales. It turns out that the company suffered double damage.
Moreover, the money invested in your market remains forever yours, because you can sell it …
The fifth reason is the absence of its market. When there is a market – there are people pumped under the control idea. They are constantly on the alert, constantly waiting for you to activate the idea and offer it.