How do you know when it's time to pivot and update your business plan? For the sake of this article, I'll assume you're constantly thinking about your business plan, brainstorming ways to improve, and strategizing growth hacks.
After all, it's Business 101 to refresh your plan annually and track your progress monthly. Things like monitoring financials, doing customer research and developing expansion plans are all part of the game.
But when you hit an unexpected situation, something that may be out of your control, what should you do? Here are three of the most important times to pivot your business, examples of brands who worked through them and tips for how you can do it, too.
1. When there's a new competitor in the market.
When a new competitor enters your market, don't panic. Learn how to use it to your advantage, like Apple.
When it launched in 2001, iTunes dominated the online music space. It was the best, easiest, and most innovative way to listen to music. Music streaming competitors, like Pandora, popped up over the next decade. But not until Spotify's 2011 U.S. launch did it become a real threat.
To compete, Apple launched a new product offering--and they made it different, better than the rest of the market. Apple Music debuted in June 2015 with the unique angle, "All the ways you love music. All in one place." With a focus on customer experience, they offered the best of both worlds--an expansive music library and the ability to stream music.
So, what did Apple do right? They waited. Then they played to their strength, the music library, and fixed their weakness, purchasing requirements. Together, it was a foolproof combination.
The takeaway: When a new competitor enters your market, be smart about it. Don't have a knee-jerk reaction and quickly change your plan. Wait and see how the competitor does. Once they gain traction and start to take away a chunk of your revenue, make a smart, notable change. Keep your character, use your strengths and fix your weakness.
2. When there's significant revenue challenges.
Every business has its ups and down, but if you're seeing several quarters or years of decreased, or stagnant, revenue, something needs to change. Take Whole Foods Market, for example.
As a big, publicly traded company, Whole Foods needed consistent growth to keep shareholders happy. Below is a screenshot of Whole Foods' revenue since 2013.
From 2013 to 2015, the business experienced strong, consistent revenue growth. But it started to slow during 2015. That's when Whole Foods attempted their first pivoting strategy--365 by Whole Foods Market stores. Clearly, it didn't help.
After many quarters of same-store sales decline in 2016 through 2017, another pivot was needed--and Amazon swooped in for an acquisition.
The takeaway: When finances start looking bad, again, play it smart. Plan for a sustainable solution, rather than making a quick fix. We don't know exactly why the 365 stores didn't take off as planned, but they certainly didn't help boost Whole Foods' profits.
The sustainable pivot? A new partnership. If you can't beat 'em, join 'em.
3. When there's an upset in suppliers or operations.
In this example, I'll pull from my own company's experience. We have product suppliers all around the world, which helps keep us agile and improves our customer experience. (It's better to be shipping business cards to Brazil from Brazil, right?).
At a time, we partnered with a large provider of marketing products to print and deliver our orders in Brazil. Until one day, after doing some customer research, we learned that our shipping times and customer experience in Brazil were horrible.
Instead of looking for another big provider, we decided to pivot completely. We did some research and decided to dump the well-known provider and partner with some small local vendors. These providers are more in touch with Brazil's markets and landscapes, and they do whatever it takes to complete our deliveries.
In the end, this was a phenomenal decision for both our customer experience in Brazil and our product margins.
The takeaway: When you're suppliers or operations change, don't just replace them with the next best thing. For us, that would have been using the second biggest producer of marketing products. What may feel like a failure can actually be a huge opportunity. Think outside the box for a creative solution.
All in all, when things go awry, don't panic. Take smart, strategic action to get your business back on track.