One of the biggest mistakes I see companies make is deciding that their brand position is set in stone. Done. Final. Never to be changed again. I have heard the sigh of relief from executives “glad that’s done!” and off they go to the next important product feature or customer issue. They charge the marketing team with defining the brand, the market, the positioning, the messaging, the customer. They do all this work and forget one very important thing: Their brand position is developed at a specific point in time. Wouldn’t it be grand if your market never changed? If your customers never changed? Imagine a world where there was no new competition ready to eat your lunch, your customers loved you forever, funding fell from the sky, your product evolved perfectly, and I think you get my drift.
If you are living in this brand la la land, it’s time take the way-back machine back to a time where we would stop at the video store on a Friday night to decide what we were going to watch over the weekend. The disappointment when all the hot new movies were all out and having to settle for reruns. As if that wasn’t enough frustration for one Friday, the complete lack of convenience of going to the store and then having to go back to drop the movies off after we watched them was just part of the process. The list of inconveniences and flaws from a customer perspective goes on and on, but the reality was that, for a certain period of time, in-store movie rentals were the only way and Blockbuster was the king. Sure there were lots of local and neighborhood shops and a few bigger name rivals, but Blockbuster was the force to be reckoned with.
That was all until one day, when a company called Netflix changed the game. They let you rent movies online. You could try the service for free and then it was a fixed monthly price to rent movies. You could line up your queue, and they would send you the movies in the mail. Watch, send back in the same postage-paid envelope and the next movies get mailed automagically. And just like that, the movie rental business was changed forever.
Blog posts, B-school classes and management consulting case studies have all covered Blockbuster’s failure and categorized it into a number of themes and reasons for why Blockbuster failed. The reality is that Blockbuster failed because they refused to pivot. They had ridiculously high brand awareness, zillions of stores, people buying what they had to sell and it seemed like everything was going their way. But, their fatal flaw was that they set their brand and their offering in stone and sat back and relaxed. I can almost see the C-suite at Blockbuster saying “Don’t worry! It’s a fad. Who would ever rent movies on the internet?!” and they didn’t change. I kept waiting for them to at least TRY to pivot. To at least acknowledge that their market had changed, but they stood still in their original brand position, convinced that their company would not be affected by the new competition or by the monumental change the internet brought to how their customers consumed movies. By the time they tried a “reserve your movie online feature,” they had already missed the boat and just a few months later, stores started closing and the rest is known as one of the biggest failures in the movie rental business and the rise of one of the biggest opportunities for the next generation of movie consumption.
What did Blockbuster do wrong and how do you prepare your brand so you don’t make the same mistakes? Here are the 5 signs that will tell you it’s time to pivot.
- Your customers needs and wants have changed. Your customers may love you today, but their needs are always changing and if you don’t pay attention, they will leave you for another lover. Pay attention to where your customers are going, what they want, how are they using technology, which other apps/products they are using, how they are interacting with you. Customers’ expectation are always changing and the bar to reaching them has never been higher.
- Your competition has stepped up their game. Yes, you have competition and knowing how you are different and what they do better, who they’re targeting and how they’re positioned is critical to knowing and articulating where you’re going to play and how you’re going to position your business. Where is your value versus your competition? A deep understanding of your competition can also lead you to the realization that it’s time to pivot.
- Your market has changed. No one has a crystal ball, so you need to keep your eye on the bigger picture and see where your market is going. How is your market changing? What are customers demanding? Who is leading innovation? How will these changes affect your position in the market? It’s tough in the day-to-day minutia to pick your head up and look forward, but you must, or you might have the greatest product no one wants to buy.
- Your brand position sounds like all the other guys. Give your brand positioning statement a sound-alike test. Line it up against your top 3 competitors and see if it sounds the same or different. Does it differentiate you enough so your customers will know why to buy your product and not the other guy’s? Be honest.
- You’re afraid to change. Let’s face it, change is scary. But with change comes opportunity and you can either stand still and miss your moment, or you can put your neck out there, pivot and change. So many companies fail because they are afraid to take risks. It’s not always easy to know where to start or how to pivot, but that’s where I come in. Remember your ability to recognize the pivot and take the turn is what could mean the difference between success and failure.
The moral of the Blockbuster story is that your brand is the heart of your business. It is a living, always evolving, integral piece of your success and needs constant care and feeding. Just as the needs of your customers change every day, so does the market. Successful companies remain successful because they are always looking at what’s next, not afraid to take risks and striving to pivot in order to meet the needs of their ever evolving customers and marketplace.
Fast forward to today. We’ve been talking about the Netflix of the late 90’s. They probably had 3-5 pivots in their first 10 years of business. They kept up with the change in movie consumption and now it’s Netflix on-demand, which our family watches at home, in the car and just about anywhere via Apple TV, iPads, iPhones, iTouches and any other possible device. What’s their next pivot? Can’t wait to see.