As with many aspects of business and daily life in recent months, the pandemic is adding new meaning to the term “pivot.” Traditionally, pivoting means changing directions for your business. Today, Harvard Business Review defines a pivot as a lateral move that creates enough value for the customer and firm to share.
However, the pandemic requires businesses to pivot to meet changing customer needs based on social-distancing requirements and other challenges. Common pivots in recent months have included retailers offering curbside pickup, restaurants selling grocery items, gyms live-streaming workouts, and hotels providing day rates for work-from-home workers.
These changes in response to the pandemic and evolving business needs were a focus of the third episode of Square’s podcast, “Talking Squarely.”
Brittany Sarhage, the owner of Rudy’s Flower Truck in St. Louis, Missouri, was only in her second year as a business owner and still getting into a groove when the pandemic hit. “All of our places shut down. We had to transition over to a delivery-focused business, which we were already set to do. Our deliveries pre-COVID were really low and that’s completely flipped,” said Sarhage.
Successful pivots require much more than a lucky guess or a gut feeling. Business owners must carefully evaluate every pivot to ensure it meets customer needs, aligns with the company’s goals, and increases revenue, and ensure they have the resources to successfully navigate the new direction.
To that end, Lauren Stovall of Hot Sam’s, a men’s clothing store in Detroit, Michigan, shared on the podcast how she evaluated her customers’ needs and accelerated plans to add eCommerce to the company’s website, which required significant effort. She says that in many ways you have to be uncomfortable to change. Her 99-year-old store had a website but didn’t sell items online, just at the brick-and-mortar store. “We shut down the store on March 16 and four days later I launched the eCommerce website on Square,” said Stovall.
Business owners often wonder if it’s time for a pivot. You may notice that one product continually outperforms others, indicating you may want to focus your business in that direction. Or, customers continually ask for services you don’t currently offer. You may also notice a gap in the market that is not being filled by another business but which you have the skills and expertise to meet.
Before moving forward with a pivot, you should carefully decide if it’s the right time and the right pivot. Here are four steps to get your existing operational framework ready for your business to make a pivot during unexpected events.
Define your business goals
While your business plan includes goals for your company, those goals should be updated regularly, as well as after significant market changes, such as the current pandemic. Set some time aside to focus on updating both your long-term and short-term business goals, or write them out, if you haven’t already done so.
The first step is to think deeply about the purpose of your business, and then expand into specific goals to fulfill that purpose. For example, a business goal could be a specific revenue target you want to meet. You can also set a goal to launch a new product or service. However, your goal can be smaller, such as growing your newsletter or social media channels. When it comes time to pivot, pull out your goals and ask yourself how each option will move your business either toward or away from your goals.
Stovall said one of her focuses has been their vision, which is remaining a community hub where you aren’t just shopping but having conversations. Evan Kidera, the owner of Senor Sisig in San Francisco, California, added that businesses should resist the pressure to give in to the idea that bigger is better, if that’s not what they want for their business. “As business owners we have to look in the mirror and ask ourselves why we are in business, and that’s not always money,” said Kidera.
One strategy for setting goals includes using the OKR (objectives and key results) tool. You start by setting short and inspirational objectives, usually four to five at a time. For example, an objective might be to increase sales by 25%. Your key results are measurable projects that help you meet each objective.
By using OKRs, you create both a road map and the metrics to measure success.
Define your target customer
Due to the pandemic and social distancing, the way that customers interact with businesses has changed dramatically, including the expectation of curbside service and online shopping. While you’ve likely already defined your target customer, you should revisit it, as what your customers need has likely changed.
However, more than simply stating the demographic, such as males over 40, create a customer profile that helps you understand your ideal customer’s wants, needs, and challenges. Consider characteristics like where they shop, events shaping their decisions, and current challenges.
Kidera saw business at his six food trucks plummet when offices closed down in the city. During the podcast, he shared how he used the flexibility inherent in the mobile nature of his business. “We were able to move our food trucks into other communities where people were working from home,” he said.
By clearly defining your customers, you can evaluate each pivot option in relation to your target audience and consider how the change would affect them.
Pivots can also open your business up to new customers. Sarhage was surprised that the pandemic brought a really big increase in business and gave her a financial cushion she didn’t have before. She hopes the pandemic put eyes on her flower truck and that the people who didn’t know about her business before will continue to use it for their flower needs. “Maybe this has allowed people to introduce flowers into their life and maybe [they] will want to keep flowers in their home after the pandemic ends.”
Create operational processes
Many businesses were forced to change their operational processes to meet new requirements and shopping behaviors. Businesses that did not have written processes to start with were forced to document all their processes from the beginning, during an already stressful time.
This additional work delayed the reopening of many businesses and potentially cost them revenue.
Types of operational processes include both internal and customer-facing tasks. Walk through the tasks that employees perform, such as processing orders and handling customer issues. Next, walk in your customer’s shoes to understand the experience from their perspective, such as the checkout process and eCommerce experience.
By taking the time now to write out all your business processes and create new ones, your business will be able to pivot faster, especially with the help of technology. Stovall said that it’s important to have processes but also remain teachable. “Just because we are the oldest men’s clothing store in downtown Detroit, we didn’t want to look like or operate like the oldest men’s clothing store. We have been very intentional in enhancing our technology.”
Lay a technology foundation
With an increased shift to digital payment and delivery methods, technology is even more important now than it was even nine months ago. Business pivots both today and in the future depend on using digital channels to transfer information over the cloud. Because security is a key concern for customers, make sure that your technology has security built into the core and provides protection from viruses and other cybersecurity attacks.
For example, a mobile flower shop, like Rudy’s, can benefit from using contactless payment tools and QR codes for customers to scan to view the available flowers and prices on their phones. Other digital channels include an automated inventory management system, such as Square, that connects online and in-store inventory, with built-in security features. Kidera was able to use his mobile POS system to take payments from any location, even when he moved his trucks into neighborhoods.
With this preparation, you’ll be able to make changes much faster in the future because the technology will already be in place. Using cloud-based technology for all processes enables employees and customers to do business no matter where they are, using whatever device is in their hands.
You can take the lessons from the decisions you made, as well as how other businesses managed the change, to prepare for future pivots. By focusing on building a foundation based on today’s current reality, you can be prepared to handle whatever the future throws your way.