Evolution mandates species either adapt to change or die. While it’s not as dire in business, the sentiment is the same. In a world where everything is uncertain and there are so many varying external factors, it’s important to consider whether you need to reinvent your business in order to adapt and stay relevant.
With the increasing number of crises the world has faced (and continues to face), companies are concerned whether their business will remain competitive or relevant in the next few years. There are numerous factors that influence business leaders to reinvent their models, from innovative competitors and rapidly changing customer needs to highly developed technology and even the political and economic climate.
In fact, traditional business models are dead. In a digital landscape, there’s almost no need for the physical buy-and-sell setup that was so popular in the early 2000s. Now, other business models have been developed. From platform-based and tech-based models to outsourcing and subscription models. Savvy business owners will choose the best one for the business so that they can grow even in a disruptive world.
First, you need to ask yourself four important questions to know if changing your business model will result in success. If your answer is “yes” to all these questions, you’ll have a higher likelihood of succeeding with your new business model. If not, consider the things you still need to adjust before setting out to reinvent your business model.
Having a clear and relevant customer value proposition will help you re-establish the purpose of your business and the relationship you have (or want to have) with your customers.
Developing a value proposition will also answer many other bigger business questions, including the following:
There are three main components to a value proposition:
To create a solid value proposition, you need to have a deep understanding of these components. Remember to stay updated with your target customers. Their preferences and problems may not be the same as they were even just a year ago. And if they are, there may be new innovations from competitors that are offering better solutions than yours.
While it’s important to look at the bigger picture when it comes to your new business model, you also need to consider its moving parts and how everything works together.
Reinventing a business model means looking at every aspect and changing those if necessary. This may seem difficult or tedious on paper; but if this isn’t the first business model you’re developing (and chances are it’s not) then your experience will help you easily identify what components need to be changed or updated.
There are four core elements in a business model:
If all of these elements work well together within your new model, you can expect seamless business operations and production.
Your new business model shouldn't be influenced by any previous negative factors from your original business model, otherwise what would be the point?
Negative factors can influence different aspects of your business, from workplace culture to operations. You need to keep in mind existing issues or negativities in your core business and make sure to keep them away from your new business model.
Some of the worst, most common negative influences include poor communication (either between you and your team or amongst your team members), toxic employees and customers, poor performance management, and even inability to accept change or innovation.
Creating a new business development process allows you to avoid making the same mistakes or encountering the same negative factors in your new model.
It’s important to consider how your new business model will affect your competitors. Ideally, you should be the one disrupting your them, not the other way around. Getting the upper hand will allow you to have more control in the market.
Both minor and dramatic shifts in the market can change the rules of the game so it’s important to stay on top of current trends and events. As a business owner, you need to have a strategy in place to beat your competitors. Having an effective business model is part of that and should allow you to edge out the rest of your competition.
Once you have carefully assessed your readiness in reinventing your business model, you need to keep in mind four fundamental steps to ensure that your reinvention is successful.
Your customer’s needs and problems rapidly change in response to whatever is happening in the world—be it economic downturns, global health issues, or even social injustices. This means you need to develop a business model that can quickly adapt to your customers.
Many companies were able to meet the needs of their customers in innovative ways during crises. Dyson, a household appliances company in the United Kingdom, developed an entirely new ventilator to help those who were affected by COVID-19.
VSP Vision Care, a nonprofit vision benefits company in the United States, expanded access to essential medical eye care coverage for most VSP members with no additional cost during the pandemic. This was incredibly helpful to members who had urgent eye care problems or concerns, especially during the height of lockdown when most practices were forced to close.
As a business owner, you need to be proactive in keeping up with your customers. Pinpoint their needs and how you can address them and actively listen to their concerns and feedback. Knowing your audience also helps you see if there are untapped markets that you can reach with your new business model.
Before you push through with the products and services for your new business model, make sure you review its product viability.
Product viability indicates how relevant and valuable your offerings will be to your target customer. For you to assess the product viability, you need to analyse the demand for the product or service and the profit margin (i.e. selling it at a competitive yet attractive price).
This is interconnected to the first step (i.e.knowing your audience), because it will establish if your offerings are still relevant to your customers. It will also help you decide whether you can mark up your prices or if you actually need to lower them.
How are you currently promoting your brand? How are your customers learning about your products or services?
For your new business model to be successful, you need to assess whether your current marketing strategy is effective and if you’re seeing a return on investment with it. In today’s digital world, it’s important to be updated with current content marketing trends to reach your customers and engage with them.
Maximise technology in your marketing strategy, including AI-powered or voice-activated content, to lessen repetitive tasks for your (human) team and increase efficiency. Remember that customers now highly value stories over hard data. People want the best experience they can have online, and providing them great, immersive stories through your content will build a connection with them.
According to Sleek Note, there were over 1.8 billion global digital buyers in 2018 and that number is expected to grow to over two billion in 2021. This indicates that the best way to reach the majority of, if not all, your target audience is online.
If your brand is already online, you need to be consistently proactive with building a presence across different channels and platforms. One of the best ways to do this is by implementing strategies to maximise your social media. You can diversify your content depending on which platform you post. You can build a backlog of content so that you can consistently post on social media and build a presence. And you can use relevant hashtags to increase your post’s visibility.
Reinventing your business model involves a lot of assessment and considerations before you actually take that first step.
Not sure if your business model stacks up? Book a call and let’s find out together.
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