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By DP Taylor, The Blueprint
Chances are, you have a Netflix account or know someone who does -- by 2020, Netflix had around 73 million U.S. subscribers. The company is one of the most dominant forces in American media today, and it’s even producing its own films, such as The Irishman, with A-list Hollywood actors.
But they didn't start that way. People who rented movies in the late
1990s and early 2000s -- before streaming became big -- remember Netflix
as the company that mailed you DVDs so you didn't have to go to the
video store.
The company carved out a nice niche, but reinvented
itself to take a bigger bite out of the movie rental business: it
launched an online streaming service in the late 2000s and transformed
the media landscape.
For every successful reinvention story,
however, you’ll find plenty of examples of businesses that failed to
adapt and collapsed. Blockbuster is a prime example -- had it
repositioned itself as a Netflix competitor early on, it might have had a
chance, but it didn't see the future the way Netflix did.
These
lessons are all fine and good for corporations with deep pockets -- but
what can a small business with limited resources do to reinvent itself?
Here are a few tried and true methods for reinvention you should try if
you feel your business needs a change.
1. Create a new product
A
new product may give your business a shot in the arm. Don’t ditch your
bread and butter products, but if sales are lagging, perhaps it’s a sign
to go back to the drawing board and do some market research to see if
your customer base is craving a new product you aren’t offering yet.
Use
surveys to ask your customers their most pressing needs, which will
give you insight into what additional products you could offer.
Success story:
Netflix’s launch of a streaming service in 2007 is perhaps the best
modern example of a company reinventing itself with a new product
launch. It’s wise to hold on to your money-making products in the
meantime to keep the lights on -- Netflix didn’t immediately ditch their
DVD mailing service, after all. In fact, believe it or not, Netflix
still had 2.7 million DVD-by-mail subscribers as of 2019. With a smart,
diversified strategy, a bold new product supported by solid market
research can take a company to the next level.
How to do it low cost:
Rather than create a new product out of whole cloth, save money by
adapting your current products to meet the need. More than likely, your
customers simply want a better or modified version of your current
product to meet modern needs. Make those tweaks and then market it as a
new product to get people excited.
2. Identify an upsell
Upselling involves offering a better
version of a product or enhanced services when a customer buys, or
perhaps later down the road when you are following up with the client.
Upselling
allows you to build off your current customer base, which is generally
easier to do than finding new customers because your current customers
already know and trust you.
Success story: Extended
warranties, rust proofing, gap insurance -- most new car customers are
bombarded at the dealership with a host of upsells by an eager
salesperson. For many of us, it's downright annoying. But dealerships do
it for a reason: upselling works. One study shows that one in every 25
customers will purchase an upsell offer. That means if you're making 250
sales per month, simply offering an upsell gets you an extra 10 sales.
How to do it low cost:
Take your current product and separate it into a standard version and a
premium product. For example, if you offer IT security services to
small businesses, you might offer your standard package and then a
"premium" version that assigns a personal concierge to the client for an
upcharge. You may have been offering this before anyway, but found only
some of your clients were using it. It may be ideal to offer this as an
upsell, which comes at no additional cost to you.
3. Expand your market
Many
businesses fear contacting different segments of the population, but
this is a fundamental part of expansion and company growth. For example,
if your consumer products are reaching primarily men ages 35-49, modify
them to appeal to women ages 35-49 as well.
And after that, you
could look into expanding into younger or older markets. Don’t stay
stuck in one market because that’s the way you’ve always done it.
Success story:
Indian corporation Wipro is one of the largest IT companies in the
world, with $9 billion in annual revenue. It's a little staggering to
learn that Wipro stands for Western Indian Vegetable Products -- its
core business back in the 1940s. But as the company evolved over the
years, it identified different markets, making various consumer goods
before eventually hitting the jackpot with IT.
How to do it low cost:
Identify what low-cost tweaks you can do to make your product or
service appealing in a different market. You may simply need to adjust
the marketing messaging to go for a younger demographic. It may mean a
change in sales strategy where you have your salespeople contact people
who typically don’t buy your product because you never contact them. Or
it could be a minor adjustment to the product itself to address the
reasons why those other customers don’t buy.
4. Find a new niche
Sometimes you get hammered by the
competition that has deeper pockets or was just faster to the market
than you. When this happens, take a deep look at what you do well as a
business, and identify a niche you can fill that isn’t choked with
competitors.
This may require appealing to a smaller market, but
with a more focused product and premium features, you may find more
profits there.
Success story: Garmin dominated the personal
navigation market in the late 2000s and into the early 2010s to where
their ads were ubiquitous -- particularly around the holidays. But the
sudden emergence of smartphones almost immediately snatched that market
away from them. However, the company reinvented itself and shifted more
focus into sports watches and activity trackers, and its early entry
into this market has allowed it to compete well with big names like
Apple Watch and Fitbit.
How to do it low cost: Often,
appealing to a niche market simply means a shift in company strategy. In
many cases, you can decrease your sales and marketing budget because
you’re focusing on a more targeted niche. Focus on developing personal
relationships with those customers and building a loyal clientele who
will pay premium prices for your high-quality, more focused products.
5. Change your marketing strategy
If
you feel you must reinvent, you may not need to change your market or
your product at all -- instead, look into shifting your overall product marketing
strategy. It’s easy to waste money on fruitless efforts in marketing,
but it’s just as easy to shift direction and get more frugal with your
marketing dollars.
Success story: Old Spice, which debuted
back in 1937, was seen as an outdated brand by the public in the early
2000s, resulting in a massive rebranding campaign that attempted to give
the product younger appeal. Thanks to an extensive ad campaign
featuring humorous and irreverent ads, the brand has reclaimed much of
its market share.
How to do it low cost: Even in this age of advanced analytics, it’s tough to tell what your marketing strategy
is doing to move the needle. But analytics can help a lot. Use software
to monitor your marketing efforts and take a deep dive into the numbers
to determine where your money is having the most impact. Use the 80/20
principle to determine which 20% of your marketing efforts produce 80%
of your results, and make a radical shift by pouring the rest of your
marketing dollars into that part of your business.
Use software tools to help you reinvent your business
When
doing something as difficult as reinventing your business, you need all
the help you can get. The Blueprint has reviewed the top email marketing software and marketing automation software to give you a leg up on the competition.
These platforms make it easier to overhaul your marketing strategy and gain actionable insights through advanced analytics so you can identify the most efficient ways to spend your marketing dollars in service of your new company strategy.
See more at The Blueprint
