A common trait shared by successful business owners is a flexible mindset, which comes in handy if and when it becomes necessary to shift the course of business to go where the opportunity lies. As companies grow over time, evolution is to be expected as they pinpoint their target audience, find their competitive advantage, and identify their unique ability to fill a gap in the market. Along the way, it’s natural for there to come a time when doing a business strategy pivot is essential to a company’s continued growth and success.
What are the advantages of pivoting?
Pivoting allows businesses to focus more on their strengths or unique opportunities, which in some cases may differ from a company’s original vision. A pivot could be done out of necessity, such as shifting your business in response to market conditions or investor concerns. That said, it can also be a way to seize new opportunities that would have otherwise been unexplored or that expand your business’s growth potential. For example, tracking customer behavior and discovering trends—e.g., your most popular product or service isn’t what you expected it to be—could encourage you to revisit your business model and invest more time and money into the thing customers want most, even if it’s not what you originally thought it would be.
Types of business pivots
There is no one-size-fits-all approach to developing a small business pivot strategy. Depending on the business opportunities that may be presenting themselves or the reasons behind your change of course, business owners can go about pivoting in a variety of ways. Some examples of common pivot strategies include:
Product feature pivot
As times change, so do the products and services that your customers need. A product feature pivot means modifying a product or service based on customer feedback. Product feature pivots can look like adding new features to your product, removing antiquated features, or creating a new product that better meets your customers’ needs.
A competitor pivot utilizes a marketing strategy that either directly or indirectly responds to an individual competitor by emphasizing differentiation targeting their weaknesses and your strengths. This might be particularly useful if you want to highlight something your product or service does exceptionally well, far better than your competitor.
Market segment pivot
Sometimes, a business may find that the audience they’ve been targeting isn’t necessarily the right audience for their product or service. A market segment pivot is when a business changes their strategy to begin marketing to an entirely different segment of customers. This can come about through customer research, feedback, or insights derived from existing customer behavior. A market segment pivot can include changing up branding, marketing platforms, paid ad audiences, and overall market analysis.
Customer problem pivot
It’s possible that your product or service is useful to customers in more ways than one. If you start to see a trend that perhaps your product solves a completely different problem or need than you originally intended, you may be sitting on an opportunity for a customer problem pivot. This means that a business will redirect its focus to marketing their product in a way that more specifically targets a customer problem or pain point that seems to be relevant to your offering.
Sales channel pivot
Sales channel pivots are when businesses find a more effective route to market. As more and more brands move in the direction of a direct-to-consumer model, sales channel pivots are increasingly popular. Creating an online store from scratch can be a huge project, but as e-commerce sales continue to skyrocket, it may pay dividends in the long run.
Remote workforce pivot
If anything was learned from the COVID-19 pandemic, it’s that businesses can run just as effectively (in some cases, more effectively) in a remote setting as they do in person. Going remote is a pivot many companies had to make in early 2020, but there are now plenty that are choosing to keep the switch going even as other companies return to the office on a full-time or hybrid basis—and for good reason.. A remote business model lowers overhead and has even shown higher productivity among employees.
Tips for pivoting successfully
To ensure a successful business strategy pivot, it’s essential to plan ahead and keep the big picture in mind, even as you step through the granular details. Here are some tips to consider along the way:
Plan for expenses
Implementing a pivot strategy often demands the additional expenditure of time and money. To do so effectively and efficiently, the plan to shift focus should account for these sometimes unforeseen or unexpected costs. It’s always better to be over-prepared than under-prepared.
Focus on problems to be solved
The best way for a business to stay aligned with its customers is to concentrate on their needs. Companies should maintain a thorough understanding of what problem their product is solving for their target market. Staying focused on the problem instead of the product enables a company to evolve alongside their customers’ needs instead of remaining overly rigid and fixed in place.
Understand the competitive market
Businesses must consider their competitors and how their products aim to solve customers’ problems in a differentiated way. A company can hone in on what makes its approach unique and valuable through this understanding, which in turn makes it easier to ensure that your business is filling in a gap in the market for your customers.
Prioritize big changes
Once a pivot strategy has been selected, businesses have to focus on where changes will occur, prioritizing the work it takes to implement change. Clearly define what will be different and what is expected, from the high level down to each individual.
If a business has opportunities to test new products, services, or website flows, it is vital to take advantage of them. Whether you’re running an A/B test on a website or email, or you’re launching a new product as a test, trying out new ideas is a good way to see if there’s an opportunity you’re missing out on. Test runs provide feedback that can lead to product or customer funnel improvements, which in turn set your business up for success down the line.
Change does not take effect overnight, and there will inevitably be bumps in the road even with the best-laid plans. Rolling out any new initiative brings about challenges. By asking for customer feedback and keeping an open mind, business owners can adapt as they go. The importance of remaining patient and staying the course as the kinks are worked out cannot be understated.
The bottom line
Business owners who are considering employing a pivot strategy should first and foremost examine their business plan and how feasible it is over time. Business owners need to think about the products and services their company offers and how they will continue to be relevant to customers in the long term. If a pivot seems like a viable strategy, proceeding with careful planning and a flexible mindset can keep your business ahead of the game and help you scale steadily on an upward trajectory.