The Business Pivot: Why Customer Retention is Key
With ever-evolving markets being a constant challenge, companies are working tirelessly to stay ahead of the competition. Many have begun to embrace change by pivoting – making a sharp shift in the direction of their business – and some have done so with great success.
The most famous contemporary pivot is probably Twitter, which transformed from an iTunes-like podcast repository to today’s ubiquitous micro-blogging behemoth. Other notable pivots include Groupon, originally a fundraising site; Nokia, which started out life as a paper mill; and Wrigley, which pivoted from soap producer offering a stick of gum inside each box to a chewing gum company.
Companies reinvent themselves for a number of reasons. Some do it to stay relevant in a constantly changing market, while others make the change as the result of understanding of your customer needs. For example, David McConnell, a book salesman, found that his mostly female clientele were more interested in the free perfume samples than the books he tried to sell door to door. Pretty soon, Avon was calling.
Reinventing yourself is not a decision that should be taken lightly. It can be extremely risky, but also can be extremely rewarding. When considering whether a pivot makes sense for your organization you should ask yourselves a few questions:
- Does it make sense for your company to reinvent itself?
- What are your main reasons for the change?
- Are you in a position, financially or otherwise, to take a risk?
- How do we do it without losing customers or market credibility?
While all of these questions are extremely important, I would argue that customer retention is the most critical. You worked hard to gain the trust and loyalty of your customers and the last thing you want to do is lose them in the transition. Keep your customers informed of plans, talk to them about why this is important and how it will help you provide better products and services. Give them an opportunity to provide input, and once the transition is in place, continually keep your ear to the ground so you know how they feel about it. Helping your current customers feel part of your journey is the best way to keep them loyal while opening opportunity for additional customers.
One of the best ways to keep your customer base updated is through your customer engagement organization. Customer service representatives should be trained to have an open and caring dialogue with customers to answer questions and acknowledge comments. Customer engagement and remote support tools are a great way to keep to ensure constant contact with customers no matter where they are. If part of your pivot plans include rolling out a new product modern tools like remote access can help you provide excellent education and support for your customers as they get acquainted with the new product.
Done well, a pivot – or several pivots – can lead a business through changing market conditions to come out a winner.