Is Pivoting a good idea for my business? What is Pivoting? How to Pivot effectively for your business!
Pivoting is a business strategy that has been around for a long time. However, due to recent changes it has become the buzzword and go to business strategy. However, there is more to pivoting than most business owners are aware.
Numerous factors and research must be considered before undertaking any pivot strategy. Hopefully the following information will provide you with a starting point and help you with any potential pivoting strategy.
What is “Pivoting”?
While pivoting is often seen as a major shift to a new strategy and is often believed to entail drastically changing the whole company. This is not always the case, it could be any aspect of the business without being the whole business. Consider the four P’s of marketing, Product, Place, Price and Promotion and significant changes to these could be considered pivoting. Looking at Place within the four P’s if you need to fundamentally change any processes within your business could be considered pivoting, moving from a physical location to an online presence is an example of pivoting. Any major changes within the Ansoff matrix of strategy could be considered a pivot business strategy. If your business has one important problem that needs to be addressed, and only requires one aspect of the company to change, this could be a pivot.
Turning one feature of a product into the product itself, resulting in a simpler, more streamlined offering.
The opposite of the previous point is also considered a pivot, in which one product is turned into a feature of a larger suite of features as part of another product.
Focusing on a different set of customers by positioning a company into a new market or vertical.
Changing a platform, say, from an app to software or vice versa.
Using different technology to build a product, often to cut down on manufacturing costs or create a more reliable product.
Transfering a skill sets to deliver a new service.
These are just some examples of pivoting to help you with your understanding, but at least you now understand that pivoting encompasses numerous directions for any business and not just startups.
Should your business Pivot?
Many companies have pivoted and experienced massive success as a result, it’s easy for naive business individuals to believe that pivoting is a magic pill that can cure any problem. In truth, however, pivoting should only be considered when absolutely necessary, and when all other options have been exhausted. Sometimes external forces will drive the pivot, however, make sure you plan and research any pivoting strategies before implementation.
Here is some areas for you to consider, supporting your planning and identification stage, the following will help you understand if there is a need to consider pivoting:
Your business is Always Playing Catch-Up
Are you getting your fair share of the market? Is the business not progressing the same as others within your industry? Are you not experiencing the right rewards for the amount of effort being expended? The company itself may not need to pivot, but you may need to pivot your business or revenue model, product, or market.
There’s Too Much Competition
We all have amazing ideas and believe that they are unique. Did you do your research, is there a chance that a bigger company with more resources and funding and a built-in audience is already fulfilling the needs of your base audience? Do you need to niche your service or products to make them truly unique?
Your Company Has Hit a Wall
What key performance indicators do you have in place to measure the success of your business, how often do you check your progress against your own objectives? Is your company growing or has it hit a wall. The reasons could be numerous, but there will probably be one significant reason that may benefit from some form of pivot strategy. This is where an impartial external view of your businesses marketing strategies will be immensely beneficial.
The 80\20 rule
When was the last time you identified which of your products and services within your portfolio have a positive effect on the growth of your business.
You could consider using a tool like, The BCG matrix (aka Boston Matrix) which uses the relative market share and growth rate of your offerings to assess the relative strength to the greater good of any business. It might be time to drop some offerings and maximise others or create new offerings.
There’s Limited Response from Your Marketplace
Theory and reality can be completely different. The reality of implementing any paper strategy into reality can on occasions not materialise. You may on paper have an amazing product or service, but all the real world indicators post launch are saying otherwise. A lukewarm response to the first release of an offering doesn’t usually bode well, and while it’s possible to generate buzz with marketing and PR, you can only do so much to convince the world of the value of your product. It is time to reevaluate.
It is with absolute certainty that during the course of your life your goals, vision, and values will change. Researching a niche and experiencing it firsthand are completely different from one another, and you may realize that there are other, more lucrative avenues for you to pursue, and that your current course just isn’t for you.
How to Pivot Effectively
Once you've identified that pivoting is a good strategy for your company, you must take into account the numerous factors that entail a successful pivot. Here are some tips to help ensure that you reduce the risks associated with pivoting and increase your chances of a lucrative outcome:
Do it as soon as you can
Many companies pivot more than once, indeed many worldwide brands are constantly looking at pivoting strategies with many being discarded. Don’t feel bad if you identify that you have to change course a few times to get your company on the right track. However, if you are going to pivot - whether it’s once, twice, or multiple times - you need to do it as early as possible, as this helps avoid wasting time, effort, and money.
Pick new goals that align with your vision
Entrepreneurship and owning a small business is hard, and it requires you to be as brutally honest with yourself as possible. If the path you’re on now doesn’t feel right to you, you not only need to step back and evaluate your mission in life, but you need put in extra time to ensure that your new vision is the right one for you. A huge benefit to gain the insight of an impartial second pair of eyes to help with the reflection.
Don’t scrap that work you’ve already done
The majority of pivots don’t necessarily require a radical change of course, more of an evolution of an existing strategy. In every case, it’s important to identify what aspects of your business can be salvaged, kept, and reused once you’ve settled on the new direction to head in. You’ve already spent so much time, energy, and money on building a sustainable business, that you should be able to redirect your current resources towards your new goal.
Listen to your customers
The feedback you receive from customers is a great indicator for whether you should pivot or not. If you’re constantly getting criticisms like “too expensive”, “not enough features”, “the purchasing process is too complex”, “there are other, better products out there”, or any other feedback along those lines, you might be ready for a pivot of some sort. Customers are paramount with any pivot, ultimately your customers will make you a success or not so their input/feedback is vital to any new strategy. During the research stage you will get the occasional negative feedback, which is expected, you will always get those that do not want change. Ensure your sample group reflects that of your customer demographic.
Make sure your pivot presents opportunities for growth
However, if you pivot your company in a new direction without much thought as to where you’re going next, there’s a strong possibility that you’ll hit yet another roadblock, just under different circumstances. To help prevent this, make sure that you not only consider pivoting from your original path, but that you take into account the opportunities for growth and expansion in your new path. If the market is smaller, the customer base is less diverse, or has too much competition, then it’s not worth risking starting another company, so keep looking. The better the planning and research stage, the more successful any pivot may be.
When it comes to planning for success, just remember: the more you prepare, the less you need to. Making decisions without thought is a recipe for disaster, so before you decide to take your company in a new direction, take the time to prepare.
And then prepare some more.
Because you just might need it.
And finally keep evaluating the new pivoting strategy, it might need some tweaks.