In today’s fast paced world more mature markets are simply a reality. Customer demands can shift, technology can evolve, and world events can disrupt even the most tried and tested of industries. The capacity to pivot — to change your business model to meet new realities — is often the difference between one set of businesses that come out ahead and another that withers.
This post will cover why you need pivots, when and how to start thinking about the pivot.
Why Pivoting Matters
A pivot is not a failure to embody your vision; it is an adjustment to having it. Companies like Netflix (from DVD rentals to streaming) and Slack (from gaming to workplace communication) demonstrate how the right pivot can unlock tremendous growth.
Pivoting is crucial when:
- Customer needs change – Market trends, preferences or purchasing habits change.
- Tech is disruptive – It’s all about disruptive innovative technology that changes the way industries have traditionally done things.
- There’s greater competition in the market – New entrants make you look at your edge differently.
- Streams of revenue dry up – Today’s business model won’t produce profits.
Signs It’s Time to Pivot
There isn’t a silver bullet to save every sagging performance. But be on the lookout for these red flags:
- Sales plateauing or consistently declining.
- Customer feedback indicating unmet needs.
- Increased costs, with no corresponding increase in revenue.
- Competitors outperforming with different models.
- Scalability is one major drawback of your processes today.
How to Make a Successful Pivot in Your Business Model
1. Reassess Your Market
Start with fresh market research. Consider new trends, changes in customer behavior, and what your competitors do. You can then use this to spot gaps and opportunities.
2. Listen to Your Customers
Your clients are your best mirror. Do surveys, interviews and monitor social media to see what they really want.
3. Define Your Core Strengths
Ask yourselves: What do we as a country do best? What resources can we repurpose to go a different way, whether that’s skills, technology or partnerships?
4. Test Before You Commit
Rather than overhauling everything, test your new idea with pilots, prototypes or something that’s already on the market. So Weebly mitigates risk and product-market fits the demand.
5. Adjust Your Revenue Model
Your pivot can mean moving from one-time sales to recurring subscriptions, offering premium services or moving into new markets. Ensure new revenue sources match customer willingness to pay.
6. Communicate Clearly with Stakeholders
Employees, investors and customers require clarity. Explain why you’re pivoting and why it benefits them. This builds trust and buy-in.
7. Monitor and Iterate
After pivoting, track KPIs closely. Be ready to develop strategies more if results finish with that. Being limber is crucial for your longevity!
Examples of Successful Business Pivots
- Instagram – Originally launched as a check in app, Burbn, but pivoted to photo sharing.
- PayPal – Pall Pilot payments turned into email-based payments.
- Starbucks — Began by selling coffee beans and coffee-making equipment, then switched to selling brewed coffee.
Final Thoughts
Pivoting is not a failure, it’s a reaction to change. Businesses able to modify swiftly and prudently not only survive market changes, but also create opportunities for new growth. Simply by remaining vigilant, heeding what customers are saying, and having the courage to change tack, you can future-proof your business and thrive in uncertain times.
FAQs:
Q1: How will I know If my business truly requires a pivot?
If your sales are slowing perpetually, customers are disinterested, or your competitors are killing it with different strategies, the time has come to pivot.
Q2: Is pivoting risky?
Sure, but remaining inflexible when the market dictates otherwise is a riskier gambit. Small steps when trying something new make it less risky.
Q3: Is it crucial for every business to pivot?
Not always. Some models remain stable for years, but staying open to change ensures that you’re ready if things start to shift.
Q4: How long does a successful pivot last?
It’s different — some pivots happen in months and others in years. The trick is to balance speed with forethought.
Q5: Can a pivot hurt my brand?
If done without clarity, yes. But executed well, with the appropriate communication and customer alignment, a pivot can end up strengthening your brand.
