Learning & Innovation
How do you stay relevant in constantly changing markets? To move forward boldly (and increase your revenue), it may be time to read up on how to thoughtfully pivot your business strategy. To quote the American business leader William Pollard, "Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow." All in all, if you want to get ahead and stay ahead, you're gonna need to pivot. Let's look at what you can expect from a pivot and how you know you need one.
What Is A Pivot To Your Business Strategy?
COVID-19 (and the dramatic industry changes caused by the pandemic), has made "pivoting" a buzzword in the media. "Pivoting" has been thrown around left and right every time a business changes course. Ultimately, pivoting a business strategy relates to how companies change and how they're doing things to reach new markets and improve revenue.
For your business, pivoting could mean creating new offers, delivery mechanisms, branding, or some other modification that substantially changes your business model. But, keep in mind that pivoting is not a one-and-done approach. It requires a commitment to try new things and then measure how things work.
Is There A "Right Time" To Pivot Your Business Strategy?
Timing is everything. If you pivot your business strategy too late, you may miss opportunities. To be ready for a pivot (and know if the timing is right), you need to pay attention. So, what are you looking for? Here are some clear signs that it's the right time for your business to pivot:
- Revenue Loss: The most obvious sign that you need to pivot your business strategy—is declining profits or growth.
- Market Changes: Market changes are usually due to factors outside of your control—for example, the move from gas to solar energy, or the changing tastes of new generations of consumers, such as Gen Z’s focus on purpose-driven and sustainable brands. A new trend or market shift may signify that you need to shake things up.
- No More Rave Reviews: Have your customers lost their excitement over your products or services? Are they complaining more often? This is more serious than just a Google review, it digs deeper into your customers' passion (or lack of) for your products. Your solution may be a new product strategy or a future offering.
- New Technology: If your market has shifted to new technology, but you're still doing things "the old way," you may want to pivot in order to stay competitive and relevant.
- Too Much Competition: A crowded market may mean you need to offer new services or find a new target audience.
- Low Morale: Perhaps you're experiencing staff turnover, team apathy, or other signs of burnout in your organization. This may be a clue that you're headed down the wrong path, and a pivot is necessary.
Depending on the changes affecting your business, there are various steps you can take to pivot your business strategy.
Your Path For Pivoting Your Business Strategy
If you think that your business needs to pivot its business strategy, your next question should be, "How do we get started?" Depending on the changes affecting your business, there are different paths to pivoting. Let's look at how you can get started immediately.
Evaluate the State of Your Business Strategy (Are You Meeting Your Goals?)
A pivot is a major change to your business, so you can't go in recklessly. Your first step is to look at how business is doing today. This means deep diving into your business's strengths and weaknesses. It's easy to recognize what's going well—but it may be harder to identify what you are doing poorly. It'll be harder to evolve and pivot if you don't acknowledge your pain points. You can evaluate the state of your business by:
- Assessing Internal Factors in Your Business: Deep dive into your business by looking at your location, your products, your staff, and your leadership. Consider things like staff turnover and technology changes. How are all these aspects of your business performing?
- Following the Money: Companies fail due to a lack of financial planning. Review your finances to ensure your business is on the right track for a pivot. Look at metrics like cash flow, working capital, credit, and growth.
Connect With Customers
Customers' needs are constantly evolving. To stay in sync with your customers and understand them (beyond metrics and data)—find out what's important in their lives and how your product can fit into their world. Starbucks is an example of a company that owes much of its success to its close connection with its customers.
From humble beginnings selling roasted coffee beans in Seattle to full-menu offerings worldwide, Starbucks stays ahead of customer trends due to its customer-centric business strategy. Starbucks recognizes the value of social listening and market research. For example, between 2012-2017, consumer trends grew for plant-based milk alternatives. Starbucks kept pace with market demand by widening its milk offerings beyond dairy and soy, unveiling coconut milk in 2015 and almond and oat milk in 2016. How'd they respond so quickly? They listened to their customers. According to Starbucks, they used their My Starbucks Idea platform to gather customer feedback. What did customers want? Expanded plant-based milk offerings.
In the end, your customers may give you insight into emerging markets, so put in the effort to learn about them and their needs, and you may find new opportunities for a profitable pivot.
Sizing Up the Competition
Your company is not in a silo. You have a whole market of competitors out there who are doing their thing, and you need to know what they're doing (and how you can do it better). Therefore, before you can make a pivot, you need to check out the competition. This means more than just taking a peek at what they're up to. No, investigating your competition involves a competitive analysis. A competitive analysis can help you find new opportunities as well as uncover any weaknesses that need work.
Craft Clear Messaging
You want your next great idea to get noticed. So don't neglect your messaging. You need to be able to explain this change and what it means for your customer. A clearly crafted brand strategy will set the expectations for your target audience and connect with your customer's needs and ambitions. Your messaging is the perfect opportunity to redefine your brand's influence and highlight your pivot. Dropbox rebranding shows how clear messaging can help with a mission-driven pivot to a business strategy.
In 2007, Dropbox launched as a file-storage web service company—but in 2017, it moved to be a full suite with APIs, tools, and integrations. They wanted to be known as "the connective tissue for teams and businesses of all sizes." As such, Dropbox refreshed its mission and its logo to reflect its new products. According to the Dropbox design team, "Our old logo was a blue box that implied, 'Dropbox is a great place to store stuff.' The new one is cleaner and simpler. And we've evolved it from a literal box to a collection of surfaces to show that Dropbox is an open platform and a place for creation."
Ultimately, the act of pivoting is not enough, you need to share the value of your pivot with your audience. Don’t let a great idea go unnoticed, craft messaging that showcases how it benefits your audience.
Try A Slow Approach
It's easy to see an opportunity to pivot and want to dive straight into changing everything overnight. But, it's hard to track what's working (and what isn't) if you're moving too fast. Instead, try a more intentional approach to pivoting your business strategy. Focus on the incremental ways to pivot your business for growth. Some first steps towards a pivot include:
- Choose goals that align with your business: If you've had success before, stay true to the parts of your business that are working well. Perhaps it's time to drive innovation to find a new customer segment or tweak or repackage current offerings. You don't have to stray far from your core business model to pivot with success.
- Focus on one key feature: Don't be distracted by trying to please everyone. This can confuse customers and dilute your marketing. Keep it simple. You can always add more features later.
- Plan to pivot: Once you've decided the next move you will make, craft a plan that ensures all the correct elements are in place. This could involve new financial needs, staffing, and scheduling. Get these lined up before your big move.
What Happens Post-Pivot?
You’ve pivoted, it went well, and things are looking great. Now what? Well, ultimately, pivoting your business is never truly "finished." The need to evaluate threats and opportunities and change directions is an ongoing process. To stay agile, innovative, and forward-moving, keep your eyes on your competition and customers—they'll be the best indicators that it's time to pivot again.
Pivot Successfully With Research & Strategy
If you're gonna change your business, you need to know how your customer thinks. At Rebel, we're driven by the pursuit of knowledge, chomping at the bit to find out how we can set our clients apart. Let's work together to find the answers you need to pivot your business strategy with confidence.