The speed at which everything changed made it even more challenging to step back and objectively plan your next steps. How do you map out your next move? What is a pivot strategy, and how can you develop one quickly that will help change the trajectory of your business?
The best definition of a pivot strategy I’ve heard is changing your business strategy without changing the purpose or vision of your organization. A pivot is about a change in direction. It’s changing how you’re doing it, but not the why.
In a more formal sense, it’s taking some fundamental aspects of your business strategy and deciding to change them because of a disruption that has occurred. In our current case, the disruption is reduced consumer demand due to social distancing and the mandatory shutdown of businesses, which has caused revenue to drop and regular consumer consumption patterns to stop. For some industries, consumption has been almost eliminated. This disruption can force businesses to adopt defensive strategies like cost savings and offensive strategy, which is pivoting.
At Crew, we approach all strategies with the 5 P’s of marketing, the five levers that help drive demand in the economic value exchange. They are people, product, place, price and promotion. By looking at your business or product mix through the lens of these 5 P’s, it will give you clarity around how to develop your pivot strategy. These are in order:
Whether you’re B2B or B2C, you must consider what’s happening to your customers and/or consumers. What’s going on in their world right now? In terms of purchasing your product/service, is this going to be a short-term or a long-term barrier? Will they start buying again, or is there a chance they’ll say, “You know what? I didn’t need that.”
Right now, more than ever, it’s important to draw close to your target audience. Whether it’s fast and inexpensive market research or calling your customers directly, take some time to open more dialogue and understand what they’re thinking. What do they need? What do they like or not like? This information will help inform which strategies you should employ. You only have so many resources of time and money, so you must quickly and strategically figure out where you should invest for the benefit of your audience.
Look at your product line as it sits within the current economic climate. You need to honestly and fairly answer this question: do you have the right product or service mix for the current market and is it positioned to meet consumer needs? Do you need to change it? How does that work? Should you actually look at a new product and service delivery? Like a lot of restaurants right now, you might decide that you’ve got a great product and you don’t have to change that. Instead, it might be a matter of changing the place and start offering delivery. Or moving to a direct model and offering your products or services online.
Place is about the distribution of your product or service. When people are self-isolated, they’re not going to restaurants, salons, retail stores or fitness centers. If this is affecting your distribution, then you must change the delivery mechanism. Restaurants are adopting delivery services, yoga and art studios are offering online classes, and professional services like marketing or counselling are supporting their clients entirely in the virtual space. Depending on your business, pivoting your distribution can be difficult, but for others, it may be the solution you’ve wanted to pursue. Embrace this as an opportunity to scale your business for the global market.
Once you’ve figured out what the product is going to be and how you’re going to deliver it, what should you charge? Given the current climate, should you even charge anything right now? Would it be considered bad corporate citizenship to do so? Should you offer it up at no charge like other larger corporations are doing? The pricing strategy is an important decision and often a hard one because there’s no right answer. It comes down to how receptive your audience is, what they’re going through, and what their willingness or ability to pay is. And that’s why knowing your audience is so critical.
Do you have a new offering that they would be open to spending on at this time? For example, a gift card, subscription service, or online delivery? Do you want to offer a product that supports the crisis effort free of charge and focus on consumer loyalty, brand building and goodwill?
Now you must decide how to bring this to market. What should the name of it be? How are you going to create awareness? Where is your target audience spending most of their time now? Why should people care about it? What message will resonate with them? When you’re in a situation where you need to pivot fast, these are all things you need to move on instantly. Right now, digital ads, social media and even direct mail are good solutions for reaching your audience.
With all the choices and decisions to be made, there are also a lot of opportunities to adapt. If you’ve walked through these steps and are struggling to develop a plan, we’d love to help you build that out.
Every day we are seeing new thinking applied to old business models and marketing strategies. With crisis comes the dissolution of old boundaries and barriers. New priorities for consumers mean new avenues for making a strong connection.
At the end of the day, if you care about your consumers, you will know what they need. If you can pivot to meet their needs, you have an opportunity to adapt your business and hopefully provide a new revenue stream.
The hope for all of us is that we not only come out of this crisis viable but also a better, more agile business with a stronger relationship with our clients, customers and consumers.