KPMG Spark Blog
It’s easy for business owners to become attached to the dream they had when they first started the company. But what happens when a product flops? Don’t worry. A failed product launch doesn’t have to mean your company is doomed to fail. Join us to learn better how to pivot your company's product line.
It’s easy for business owners to become attached to the dream they had when they first started the company. But what happens when a product flops? Don’t worry. A failed product launch doesn’t have to mean your company is doomed to fail. Plenty of household names have weathered major product flops. Those companies didn’t give up because one product didn’t work out. They pivoted.
Pivoting can mean changing the business model entirely, but it can also mean trying a new product line, identifying a new target audience, or changing the process used to accomplish a goal.
There are two primary reasons a company may need to pivot:
● Internal factors such as high turnover, lack of engagement and poor performance can indicate a problem that may signal a need to pivot. While some turnover and personnel problems are par for the course when hiring people to work in your business, large groups of people leaving the company simultaneously, an overall culture of disinterest, and a track record of poor performance indicate a serious problem.
● External factors such as market changes and evolving customer needs can also indicate the need for a pivot. The market and customer needs and wants are what drives business, so failing to recognize and respond to these forces can be disastrous.
Pivoting your product line allows you to build on the foundation you already have but tap into new markets or customers in order to expand revenue and bring more profit to your organization.
When it’s time to pivot, it’s important to have a solid plan but act fast. Those may seem like conflicting goals, but pivoting is important. It’s crucial to recognize problems in your business and implement a strategy to fix those problems without taking so long that you run the risk of going under.
Adhering strictly to a losing business model simply isn’t feasible, so you need to be ready to keep what works while exploring new ideas to improve success.
Here are three things to consider when planning a successful pivot:
1) Choose the right time
Picking the right time is half the battle in a successful pivot, but it can be hard to listen to what the market tells you. Many entrepreneurs overanalyze the data, second-guess their gut feelings, and miss market opportunities. Reacting quickly to seize the opportunity is key.
2) Absorb information
Successful business owners seek out information. They learn everything they can about a customer’s wants, needs, problems, and fears and use that information to guide their products and services. Either use your own knowledge and experience or seek outside help to assess the risk, forecast costs, and measure them against potential rewards.
3) Adapt to the marketplace
Often, windows of opportunity are open only for a brief time, so your ultimate success or failure depends on your ability to adapt to fast-changing market conditions. It’s important to always assess and measure the market, have a trustworthy team, and the resources needed to adapt to the market. This will help optimize your momentum for a positive outcome.
Product pivots are an important success strategy for new and growing companies. It takes flexibility and focus to initiate a pivot and reorient your team toward a new goal. But if you take time to do the research and plan your pivot well, it can be enormously rewarding.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG LLP.
This blog article is not intended to address or provide advice concerning the specific circumstances of any particular individual or entity and does not constitute an endorsement of any entity or its products or services.
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