Changes and adjustments are a natural part of operating a business. You’re always looking to optimize sales funnels, cut costs, and better understand the needs of your customers. But in a crisis, like the one we are experiencing now, it may take more than slight refinements to keep your business going. Instead, you may need to look for innovative ways to pivot your business.
What does it mean to pivot your business?
Pivoting involves any large-scale change to your core business. Typically, a pivot is executed to increase revenue, dramatically cut costs, or to adjust to market opportunities. In other words, pivoting your business is simply adapting to your current environment to improve your chances of success.
Ways to pivot your business
Over time, the term pivot has evolved to include any change that shifts away from your current trajectory. It doesn’t have to be an entire shakeup of your business. It can solely be a change in a specific department, product line, service, or even your mission statement.
Traditionally, pivoting your business involves adapting your business model. It’s more than asking for price cuts from vendors or hiking your prices up a few dollars. Instead, you’re taking a long hard look at the way your business makes money and identifying opportunities to optimize your revenue streams. Here are a few areas you can look to pivot your business.
Your customers may not be buying like they once were. When the market changes, consumer interest, and spending habits change. In a crisis, this typically means a decrease in discretionary spending and an increase in essential purchases. Depending on your industry or business type, that can mean an increase or decrease in demand.
If you’ve seen a decrease in spending from your current customer base, finding a new target market to pursue may be necessary. Look at who continues to buy, who your new customers are, and build out your new “ideal customer.” Once you do focus on catering to their needs and the aspects of your business that keeps them coming back, even in a financial crisis.
Products and services
As we said before, the tastes of your customers change in a crisis. Products and services that were hot 6-months ago, may now be gathering dust. Instead of pushing forward with the same offerings, look to what your customers are currently facing and adapt your offerings to complement their situation.
If you’re a local restaurant, offer no contact delivery. If you offer in-person counseling, promote remote sessions. Or look for ways to adjust your pricing models to be more accommodating to the leaner financial situations some people are now experiencing.
No matter what you change, look at ways to sympathize with your current (or new) customers. Show that you are making changes or introducing new offerings due to your desire to help. And in the meantime, pause production or advertising around traditional products and services that aren’t moving sales like they once did.
Online and eCommerce
If you haven’t considered going digital before, now may be the time. You need to meet your customers where they now are. At home and online.
Look for how you can adapt your current physical sales model to operate online. Identify new costs and services, like credit card processing and delivery, while focusing on making the customer journey easy. Start small and work out all the bugs, you don’t need to worry about having all of your products or services up at once.
It can be something as simple as a landing page, or even a prebuilt eCommerce store that you’re just filling in. You may not even need to change the way you do business, and simply having a digital storefront is enough to get people shopping again.
Not all pivots involve who, how, or what you’re selling. Some have more to do with the productivity and collaborative needs of your workforce. And as our current crisis extends, it may be time to consider adapting your business to manage full-time or part-time remote work moving forward.
For many, this is simply finding ways to make the short-term transition viable in the long-term. This means investing in tools, adjusting goals, and solidifying any other element of your business that you’ve been struggling to maintain.
You may find that some level of in-person work is still required once the crisis has passed. But for now, preparing like it won’t can help get your employees on board, cut costs and allow you to focus more intently on other areas of your business.
How to pivot your business
Now, don’t let the concept of a pivot deter you from doing it. You’ll still be walking through similar steps that you take when planning, forecasting, and managing your business. Here’s how to approach a dramatic change in your business.
1. Talk with your customers
Before you start making changes you want to be sure you understand the state of your current customers. How do they feel about your business? The industry as a whole? What struggles are they going through?
If you’ve been experiencing lower demand, listening to your customers can help you better understand why that is. You’ll uncover new pain points and needs that may require adjustments on your part to better serve them.
2. Conduct market research
When looking for an opportunity to change, you need to look beyond your current market. You may find that shifts in customer interests require further exploration to truly fill the gap caused by the crisis. You need to conduct a market analysis.
Now you’ve technically already started by talking with your customers. But to truly understand what you’re dealing with, look into the following.
Think of emerging trends as the market response to large-scale events. Aside from a crisis, this can also include disruptions in technology, national and global events such as elections, or cultural movements. In your case, you’ll want to look at broader national trends in your industry as well as changes in the community you serve.
To get a pulse on bigger shifts in opinion, use tools like Google Trends and Analytics (if you have a website) to understand how interests have adjusted over the course of the pandemic. Tap into social media, set alerts around hashtags, and stay on top of the news whenever possible.
Lastly, send out customer surveys and provide opportunities to chat with local customers and businesses. This can provide you with first-hand accounts that can either confirm or deny the trends you’re seeing on a larger scale.
Your competitors are likely in a very similar situation right now. Although, some may be fairing better than others, and you need to understand why that is.
What are their strengths and how have they leveraged them? What have they changed during this crisis? What have been some of their missteps?
You probably already know your competition well, but it never hurts to take another look. Hone in on what they’ve done to succeed over the last few months, and look for how you can adapt those changes to your own business.
3. Focus on your core competencies
It can be tempting to take a drastic departure from what you’re already doing. If your business has been struggling for a long-time, even before the pandemic, this may be necessary. But when exploring ways to pivot, keep your core competencies top of mind.
You’re already navigating plenty of uncertainties, the last thing you want to do right now is jump into a line of business or industry you know nothing about. Work with what you know best and identify opportunities to repurpose, reposition, or re-imagine what that could be for customers.
4. Develop a pivot plan using your business plan
Once you have an idea of how you can pivot your business, it’s time to step back and develop a plan to do so. Rather than starting from scratch, you can work off of your current business plan to develop a holistic picture of what the transition might look like. This includes a snapshot of the current state of your business, the desired end goal, and the steps you will take to get there.
This is also where you’ll check the feasibility of your changes. Run best and worst-case forecasting scenarios based on anticipated customer response. Review your budgets and cash position to be sure any upfront investments won’t put your business in a worse situation. Set milestones and metrics to track to make sure your pivot actually creates the positive results you want.
All of this should already be started in your original business plan. If it’s been a while since you’ve updated it, or if you never created one in the first place, now is the time to do so. If the idea of creating a full business plan right now sounds daunting, start with a lean plan or simplify the whole process using a tool like LivePlan.
5. Communicate your changes
As you begin to execute your pivot plan, make sure you communicate what is happening to both your employees and current customers. Hopefully, you’ve had some or all of your team involved with the transition from the start, but if not, give them access to the projected milestones and steps you intend to take. Give them a glimpse into your vision for the transition and ask for feedback throughout the process to ensure things go as smoothly as possible.
For external communication, you just need to be transparent. If it’s just subtle changes like new products or pricing, simply update your website with the necessary information to make that clear. When customers ask questions, work to give them a full explanation of how you’re handling the crisis and making these adjustments to better serve them and your employees.
If it’s a more dramatic change, like becoming a fully online retailer, a press release or direct statement may be necessary. Gauge the level of change and communicate accordingly. The more upfront you can be, the better your customers and employees will react.
Plan for success and plan for failure
A pivot is meant to change your business to take advantage of opportunities. In a crisis, it may be the only way for your business to survive and thrive. But keep in mind, not every adjustment will lead to success.
On paper, it may seem like the direction the market is headed or what your customers now want from a business like yours. But upon execution, you may find negative reactions, a lacking clientele, or a heavy investment that hurts your business more than it benefits.
The best thing you can do is be prepared to go back to square one. Continue to revisit your business plan and forecasts, keeping an eye on what success means in this transition. Don’t be afraid to pivot again, mid-pivot if the initial changes aren’t working. The more actively you can adapt and cut losing strategies, the more likely your business will succeed.