Thu, 15 October 2015
An Infinitely Complex Pattern…
…that is self similar across different scales. Admittedly I have no idea what that means but apparently it's the definition of a fractal. As it so happens, we have Chris Curran making a guest appearance today, master podcasting genius behind the podcast production company Fractal Recording.
Chris was very kind to join us, considering we sprung it on him about a half hour before we started recording and didn’t bother to tell him the topic. He's a good sport! And he's the perfect guest for today's topic: pivoting.
To Change Or Not To Change?
Coincidentally (or is it karma?) Chris is going through a major shift in his business at the same time that we are. And much like us, he has gone through this before.
Today we talk about two kinds of pivoting: the voluntary kind where you know you have to change something because of financial reasons or because you're not exactly in love with what you're doing anymore and the involuntary kind where some s#%! goes down and you realize you have to change or die.
Both Chris and we have been through both kinds so we have plenty of notes to compare. Recently, Chris (in his own words) "got screwed over" and royally stabbed in the back by a business partner and that forced a pivot for him. Plus he knew he wasn't quite realizing his vision for his business so when things with his partner went south, he made a major shift.
Interestingly, Chris acknowledges that this pivot has made him profitable for the first time since he started the business.
Change or die, right?
Raise Your Prices, Close More Business?
Chris told us something both fascinating and counterintuitive: he raised his prices substantially and got more clients. Perhaps the most interesting thing is that coincidentally we did the same thing. And we got more business, too.
Yet the idea of raising prices is hair-raising for most small business owners. It was hair-raising for us! After all, when it comes to building websites and doing marketing, there's a developer and a social media ninja guru on every corner. And many of them charge a fraction of what we do.
But after a lengthy analysis we recognized that we were charging too little for the comparable time we invested and value we provided to our clients. We were in a race to the bottom with all the DIYers and "day trippers" (people who work at the supermarket by day and do social media marketing by night because they read a book about it). And we couldn't – shouldn't have even tried to – compete with that.
Chris's story shares the core of ours. We both wanted to attract a higher quality client, one who understands the value of our services and has the means to pay for it. Like Chris, we raised our prices to match our value. The result?
We lost a lot of leads. Lots of people walked out the door and many never even knocked.
We also closed more business with the right people. So, fewer clients but higher value clients. In the end we could invest the time and produce the quality work we wanted and get paid to do it.
And that's something for you to think about as you continue to grow your business. Are you pricing your services commensurate to the value you provide and the experience and knowledge you bring? Or are you undermining yourself by trying to charge the same – or less than – your perceived competition?
Chasing Down The Next Product
One of the key pivots Chris made early in his entrepreneurial life was to evolve from being a life success consultant to being an audio engineer. Now that's a serious shift!
At the time, he'd been developing products, including courses, webinars and even books. And one of the things he found was that when he released one of these courses or webinars it took off and he made some nice money. But over time fewer people showed up and fewer people bought. So he had to create a new course or a new webinar and when he released the next one, it took off and made money. But the cycle repeated itself and over time interest and attention dwindled.
Chris knew he couldn't sustain a business or a life by constantly trying to release new products as soon as the ones he already created started to wane. And we totally agree. It's exhausting and not entirely profitable to keep chasing down the next thing. A business has to be sustainable and if you spend your life in a constant state of anxiety over "the next thing" that's not only bad for business but for your well being.
Know When To Hold 'Em, Know When To Fold 'Em
All this talk of making changes in business (some of them rather significant) makes us wonder: where's the line between "I need to keep going and make this work" and "It's time to bail out before I sink"?
For each of us it's slightly different. For Chris, he was tired of chasing "the next thing" and wanted to make money. He was out of ideas for how to promote his products and services and essentially stuck where he was. He does say that if you have more ideas for improving then go ahead and try them! But if you're done then you're done and some of that is just instinctually knowing yourself, knowing your limitations and knowing what you want to do.
For us, we've been faced with the decision to bail or not to bail before, most significantly during the financial collapse of 2008. One of our largest clients, a financial service provider during a time when financial service providers were going under every day, went from providing us with a substantial amount of work to cutting the cord instantly.
Ralph and I seriously considered quitting the business and getting jobs. Why didn't we? Well, lots of tangled reasons, in part because we didn't want to (we enjoy running our business too much), in part because like Chris said, we still had ideas for pushing forward, and in part because we were willing to suck it up, tough it out, suffer through it and plan for the day we saw the other side.
For you, the line may be in a completely different place. There's no science behind knowing it's time to take a new path or tough out the one you're on. Just know that every business has to change at some point. And if you're a business owner and entrepreneur, part of your job is to keep your eyes open for the signs, to pay attention to your industry, your clients and your own needs and desires, and decide.
Pivoting: Piece Of Cake Or Pain In The @$$?
We're in our 40s now, so pivoting involves a lot more creaking these days. The hinges are getting rusty. We want to retire one day! So our business changes involve a whole lot more thinking about our end game than it did when we were 20-something.
We're a little more careful, thoughtful. But that doesn't mean we're stopping. We all agree that unless you are ready financially and emotionally to retire then you have to keep going. You have to keep trying. You can't quit! You just have to evolve.
But that doesn't make it easy. There are depressing moments. Frustrating and disappointing ones. You may want to quit. You may, like us, drown yourself in box after box of Oreos.
But as a true entrepreneur you've got something special. You have a certain creativity and an ability to adapt. You wouldn't be here otherwise. You would just be doing "a job", collecting a paycheck and going home.
So even though there are going to be miserable moments that may even make you doubt your own entrepreneurial cred, you'll come up with another idea. You'll set a goal that will spark that passion again. You may succeed this time, or you may fail. But you will keep going!
Your Action Item
From Chris: Look at your personal life, from spiritual to mental, wellness to diet, and see if there are any areas there where you need to pivot. You are a whole human being and your personal life affects your business life. Your interests and hobbies and relationships pivot, too. So see where your personal life may be impacting your business and make some positive changes there.
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Direct download: 0153-pivoting-in-business-the-agony-the-ecstasy-and-the-oreos.mp3
Category:marketing, business -- posted at: 12:00am EDT