The pandemic has highlighted businesses that chose to switch up their business strategy in order to remain profitable. Retailers have found new ways to sell to consumers, such as The Gap's highly successful pivot to selling masks, and many manufacturers are turning to a DTC (direct to consumer) model. Any crisis is a true test of agility for entrepreneurs and large enterprises alike, and the COVID crisis is definitely testing most companies around the globe.
Here are 10 Steps to a Successful Pivot for your Business Strategy.
Know When to Pivot
The best way to determine your new business strategy is to pay attention. Most entrepreneurs are prepared to pivot on an idea, especially if they have a modicum of success. They will analyze customer feedback to determine timing and what adjustments need to be made. A good clue that change is necessary is a global crisis 😏 or if your customer base has started asking for more than you are providing.
Align with Your Current Business
It's important that any changes to your business strategy are an extension of your current business capabilities. If you've had success prior to the crisis, stay true to the core business with a few evolving tweaks. Talk to your customer-facing teams to find out what they're hearing from customers. Examine the market to determine if other companies are meeting the same needs as yours. Perhaps it's time to differentiate or carve out a new niche.
Know How to Pivot
Some types of pivots, especially for startups but have been used in larger businesses too, include:
- Zoom-in: A single feature becomes the whole product/service
- Zoom-out: The whole product/service becomes part of a larger product/service
- Customer segment: The product/service serves a different audience than intended
- Customer need: The problem being solved is different than intended
- Platform: The product/service becomes a platform for other products/services
- Business architecture: The business changes from B2B to B2C or vice versa
- Value capture: The product/service has value but the revenue model needs to be changed
- Engine of growth: The company changes growth strategy to be more profitable faster
- Channel pivot: Changing how the product/service is brought to market (such as direct vs reseller)
Pivot within the New Reality
Market research should also include a close examination of the global market changes that are happening. For instance, it was the COVID-19 crisis that forced Zoom to pivot from a B2B company to B2C, and quickly. Where many other organizations may have assumed that the shutdowns would be over by summer, Zoom was agile enough to capture all of those customers that needed a solution immediately. The pandemic has revealed new supply chain challenges, new consumer buying habits that affect B2B buying habits, technology use and more.
Instead of changing the entire business at once, develop a prototype or small beta program of your new idea and measure its success. Changing too many things at one time make it more difficult to monitor what is working and what isn't. Also, a loyal fan base can be supportive of small changes gradually instead of an entire do-over.
Train Your Employees
Your employees should be included in any new changes to your business strategy, especially those on the front lines of your business. They need to be fully equipped to answer any questions or sort out any confusion. Your clients will need to know what's happening so they're not concerned about losing whatever products or services you're currently offering them.
Change Your Messaging
Once you've decided to incorporate your pivot into your full business strategy, you'll need to communicate with your clients, brand fans and investors. A good place to start is to share the reasons why you're pivoting. Tell your story and share successes and positive feedback that you've heard so far. Transparency goes a long way and, if you've already worked with your customers regarding the changes, the pivot will not be a shock. Update your website and other messaging, especially if you're using new branding or marketing. Change your email campaigns to reflect your new strategy.
Use Technology & Outsourcing
Help to ensure the success of the changes by investing in technology or outsourcing. Your internal teams, such as sales and marketing, might need to switch to virtual meetings and events, a CRM system or automated marketing platform. Your accounts receivable team can help bring in revenue with a strong A/R management policy or outsourcing accounts receivable, if there are too many accounts written off as bad debt. By honing your internal processes, your pivot gains more resources to make the changes as seamless as possible.
Monitor & Measure
Now that you've fully pivoted your business strategy, monitor and measure any successes or added changes that might be necessary. Your business goals, such as growth, customer loyalty, revenue and more, must also be changed to reflect the reset button that started with the pivot.
Know When to Pivot... Again
Keep listening to your customers, your employees and the market as a whole. Small changes may lead to even bigger ones, if you're paying attention. Remember, these companies made successful pivots due to the pandemic. Stay positive and take a step forward.