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 becoming more and more difficult and in order to get out of it you first need to find the causes of low profits.
The situation itself will not be resolved, so it’s time to take active steps. To begin to act, 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 the 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, bearing in mind as the recipient of an advertising message.
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.
The second reason is pseudo-advertising. As it was said 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 bad advertising.
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 the intensification of other people’s ideas, not getting into your target ideas, but into others, as a result of which a demand is created for goods and services of other companies. These companies get free customers and thus 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 connected with the fact that there are no preliminary studies to establish exactly which ideas need to be activated in order to create demand for your goods and services. The situation is paradoxical, because there seems to be an intensification of ideas, but there are no sales, and it looks as if you do not know your target ideas, everything looks like a real advertisement, which complicates the search for the causes of low profits.
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.
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 in general 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.