Why Your Small Business Needs to PivotRamon Ray
For an established business like House of Flowers, a name change can be risky. Customers have already grown accustomed to the established name and may be resistant to something new or unfamiliar. But for House of Flowers, the change paid off, increasing sales and allowing them to expand. When an established business makes a dramatic change, or a “pivot,” it can be a great way for a business to change direction for the better.
One of the best-known pivots is Twitter, which started as a site designed to help listeners find great podcasts. When the founders of the service, known as Odeo at that time, saw iTunes begin to take over the podcast market, they realized they needed to find a new niche for their site. As activity began dwindling, Odeo held a hackathon where employees were asked to come up with a new idea for a site. From that hackathon came “Twttr,” a site that revolved around status updates.
Twitter’s journey is an example of how a business will sometimes encounter insurmountable obstacles as it grows. In reconstructing their concept, Twitter’s team considered the growing popularity of social media at the time and created an innovative idea within that space.
How to Pivot
Once a business identifies a need to pivot, it’s time to begin the process of identifying what the new direction of the business will be. How does a business maintain its existing customer base while also reaching out to potential new customers? Often many of the variables that have made the business work well can be translated to the new environment. For a business like House of Flowers that finds itself operating in a more Internet-driven world, the change might simply involve using new technology to provide the services they’ve always offered.
A pivot can be a fresh start for a business that finds itself struggling. That means defining a mission and goals and making sure every employee adjusts to the new course their employer is taking. It also means finding a way to get existing customers used to the change, which won’t be easy if the pivot is as dramatic as Twitter’s was. In that case, a business may find that it’s wiser to go after a new customer base and merely invite existing customers to learn more about the new direction the business is taking.
While a major change in direction can seem risky for a business, continuing in a direction that isn’t working is the surest way to failure. When planned carefully, a pivot can be a great way for a business to venture into exciting new directions.
This post was written in partnership with Progressive Insurance. I have been compensated, but the thoughts and ideas are my own. For additional small business tips, check out Progressive’s Small business Big Dreams program.