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How to Pivot Without Falling Out With Your Investors

Posted: 29 Mar 2020 04:00 PM PDT

For many entrepreneurs, building a profitable venture is hard, even with a killer product or service offering. From raising capital and putting together a competent team to converting that first lead into a sale, turning any idea into a business outfit can be an unnerving process. So, when that original idea turns out to be a bad fit for the market, it can be quite painful to consider pivoting, especially for entrepreneurs who've poured their hearts and minds into a business idea.

Contrary to popular belief, however, pivoting doesn't usually mean failure. It often means that your business is evolving and taking on a life of its own, with you as the entrepreneur incorporating various lessons you've learned along the way. In fact, when implemented correctly, pivoting can offer your investors and other stakeholders a refreshing perspective of your business model, which could set you up for long-term success.

That said, a successful pivot requires a carefully-choreographed approach that ultimately keeps investors and other stakeholders happy, especially if your business runs on significant funding from external sources. Because pivoting involves significant and capital-intensive changes to your business model, investor relations should always play a central role within your pivoting strategy.

So, if you feel like a pivot is the next best move for your business, here are a few strategies to help you with the transition while keeping your investors happy.

1. Keep them informed

Any drastic change to the company strategy should be a well-communicated affair. Your investors, management team, shareholders, board of directors, and any party with significant interest within your company should be notified of your intentions to pivot early enough to avoid any surprises. Surprise changes to your business structure can strain existing relationships with key stakeholders within your company, thus making the pivot feel like an impossible task.

It is especially important to keep investors in the loop if you hope to raise funds for your newly-restructured company. Any soured relationship with one or more investors can severely compromise your fundraising abilities, not to mention losing out on the wisdom and guidance that comes with having an experienced investor on your side during the restructuring process.

To this end, it's always good practice to include the details of your pivot in your monthly or quarterly investors' briefing at least 3-4 months before you restructure, even though a call, email or presentation will also work.

2. Use your go-to-market and content strategies to make your case

A go-to-market strategy is a tactical, hyper-focused version of your overall marketing strategy that maintains a narrow scope into marketing-related aspects of your pivot. When paired with an audience-specific content marketing strategy, your go-to-market strategy can help you improve reach and illustrate how your new business structure aligns with your overall business strategy, thus helping you make the case of your pivot to investors.

Content offers a powerful way to get your brand in front of potential customers. For businesses going through a pivot, your content strategy should be focused on maintaining that link between your old brand and the remodeled business structure. One way to do this is by repurposing content from your old brand and infusing the repurposed material into your go-to-market strategy. According to one analysis, repurposing content offers one of the best ways to improve trust not only from search engines but also from your audience, which can help make for a smooth transition.

At the same time, your content strategy can be used to show investors and other stakeholders how you're planning to reintroduce your brand to the market. Elements of content marketing like storytelling can even be used to win over jittery investors who are still not fully on board with the idea of a pivot.

3. Make your pivot all about the data

For your pivot to be truly successful, you must make sure all your decisions are based on solid, rational data. When starting out, it's quite normal for entrepreneurs to get attached to their business ideas, even in the absence of immediately actionable data. And while most investors often fall in love with the passion and vision that accompany those initial, deal-clinching pitches, you need accurate and appropriate data to validate your plans for pivoting if you hope to carry your investors to the next phase of your business.

Some of the data that should form part of your analysis include sales figures, conversion rates, profit margins, online or physical traffic, and other key performance indicators that are sourced from within your business. External data, including market dynamics, customer demographics, surveys, and competitor analysis should also be used to come up with projections that'll eventually be used to brief your investors.

You should also remember to be as objective as possible with your analysis. Before diving into the data, it is important to switch off that instinctual habit to spin data that comes with being an overzealous, sales-oriented entrepreneur. Having an objective look into the data can give you valuable insights into current plans for a pivot, which is why you should learn to tame your inner salesperson when evaluating your product or service.

4. Pay attention to legal and tax ramifications

Any business that goes through a pivot must often incorporate elements of legal, operational, or management-related realignments. These may include ownership and structural changes, renegotiating contracts, asset disposal or acquisition, the addition of new verticals, and other elements of your business that entail a pivot.  Because these elements are core to the business, your investors will want to see that you have a firm grasp of some of these issues before they support your pivot.

You also need to align your pivot or restructure with the most efficient tax strategies. Most businesses that go through a restructure often render taxes an afterthought. This is a mistake that can put off investors who value their bottom lines. To stay on their good books, make sure to keep up with the IRS's updates for the seven tax rates and brackets, which, according to this tax guide, could affect how you prepare your tax returns and ultimately, the contents of your financial report to investors.

It is also important to incorporate techniques for establishing a tax-free reorganization during your pivot. These techniques generally let you, your investors, or other partners transfer, defer or minimize income tax, for example during trading of company shares, thus helping your company mitigate any tax consequences associated with the restructuring.

5. Stay true to your vision

In the end and in addition to great planning and execution, a successful pivot boils down to the degree to which you convince your investors to believe in you and your team. When sales dwindle and your business is struggling to stay alive, there'll be no shortage of advice from family, friends, and business associates who believe they know what's best for your company. The true test, however, will be how well you stick to a vision that may not make sense to everyone else, a vision that probably helped land the same investors you're hoping to carry over into your remodeled business outfit.

To help align your investor-backed vision with any plans for a pivot, make sure you aren't blinded by what you personally think is the way forward. Listen to your customers and employees, internalize their sentiments and criticisms, and use this information to enrich your vision for the pivot.

Most importantly, don't turn back once you've decided to pivot. Indecisiveness is one of the best ways to give investors cold feet, so make sure you give this process your complete support and attention. You should also make sure everyone is on board with the pivot once the decision has been made. This way, you'll present a united front that investors will trust to take them down the new path.

 

How to Improve Your Shopping Cart Abandonment Rate

Posted: 29 Mar 2020 01:00 PM PDT

Did you know 68% of e-commerce customers who put items in their cart fail to complete their purchase? This eye-opening statistic is one of the big reasons you should start thinking about new ways to convince consumers to come back to your website after abandoning their shopping cart. 

If you're not actively working to improve your abandonment rate, you're leaving money on the table. Marketers and business owners that proactively communicate and build rapport with their audience see a higher return on investment (ROI) and generally see a higher customer retention rate. 

Today we are going to take a look at several ways you can improve your shopping cart abandonment rate. Specifically, we are going to look at ways to make your website more accessible while removing surprises and stepping up your existing marketing strategy. 

Remove unexpected costs

Unexpected costs can dramatically increase the number of people that leave their cart without making a purchase. A survey conducted by Baymard concluded that 53% of consumers abandoned their shopping cart in the last three months due to unexpected costs at checkout. 

Let's be honest; we have all found ourselves in this position. You're browsing an online store and decide to add items to your cart. You get to the end of the process and see that after shipping and taxes, the price is nearly double what you anticipated. Do you begrudgingly finish the order, or leave the website? Odds are, if you went through with your order, you'd look for another brand that doesn't add on extra fees next time.  

You never want to put your consumers in this situation. 

Removing unexpected costs doesn't mean you have to lose out on profits either. Adding a shipping calculator to your website can give users a more realistic expectation before they check out. As a result, they are more likely to stick around and finish the transaction. 

Send an email reminder

Another reason consumers leave websites with items in their cart is they get distracted by things going on in their life. Our smartphones are constantly dinging when we get new emails, text messages, or social media notifications. Due to this constant stream of information, consumers are likely to get distracted while browsing your online store. 

You can convert almost half of these consumers if they are on your email list. Studies show that abandoned cart emails have an impressive 48% open rate. 

There are several things you should keep in mind when sending our emails reminding customers that they've left something in their cart. First, personalization will increase the odds that the subscriber opens the message. Simply adding names on your reminder emails can improve your open rate by 21.92%.

It's essential that you're not too pushy about your reminder emails. Some consumers forgot to complete their orders, while others decided that they weren't interested. We suggest sending a total of three email reminders over a week. 

Finally, don't forget to show the item the consumer added in the email with a CTA that will bring them back to their shopping cart. As an added bonus, you can include social proof from other customers that have left reviews on your site. 

Seeing social proof can trigger fear of missing out (FOMO), a psychological phenomenon where people feel inspired to buy a product or service because they don't want to miss out on a great deal. Studies show that on social media, about 56% of users experience FOMO. 

Streamline navigation

Complicated checkout forms and signup pages can stop potential customers in their tracks. Streamlining your on-site navigation will ensure that consumers can quickly and easily sign up, browse your online store, and complete their order. 

The first area you should look at when working on your site navigation is cart visibility. When people come to your site and add items, they expect to have access to their cart without navigating to a separate page. 

Amazon is one of the best examples of a business that shows users exactly what's in their cart before they check out. If you want to see the items you've added and your total, simply hover over the cart button at the top right side of any page on their website. 

Next, take a look at the form users have to fill out to sign up or complete their purchase. How many fields do you have under each section? Ideally, you should have at most seven fields. The more information consumers have to provide before they can complete their purchase, the less likely they are to abandon their cart. 

It's vital that you improve the speed of your website to enhance UX. A slow site can have a negative impact on the ways consumers navigate your online store, resulting in higher than average bounce and abandonment rates. 

Step up customer service

Your customer service strategy is one of the most important decisions you'll have to make as a business owner or marketer. Consumers expect businesses to have 24-hour support if they have a question or concern. Failing to meet these needs will absolutely result in more people leaving your site or ignoring your brand in the future. 

If you can't have live support agents available every day, consider adding chatbots to your website. Combine a comprehensive chatbot strategy with a detailed FAQ and help page, and you can keep many of the consumers around that were ready to leave. 

Chatbots can take common issues and give users a direct answer or send an article that addresses their concerns. The best part about this technology is you can use it on your website and social media. 

There's a good chance your brand has a strong social media presence. You would be hard-pressed to find a company that doesn't actively try to grow their business using platforms like Facebook and Instagram. Consider that over three billion people use social media, and it's easy to see why this strategy is so crucial to business owners across all industries. 

If someone finds your brand on social media first – which is likely – you'll want to make sure that you can answer questions via direct messages. This tactic is particularly useful if you actively promote your prices and products on social media. When people are on the fence about taking advantage of an offer, a robust customer support team supplemented with chatbots can improve your chances of converting customers that may otherwise abandon your website. 

Cart abandonment is a problem that affects marketers and business owners across all industries. Our goal is to convert as many customers as possible by offering them a value proposition that they can't find anywhere else. 

As your business grows, you may see a shift in consumer behavior. Analyzing your analytics and social media data will help you pinpoint when customers leave your website, which can help you identify new trends. For instance, if you see that over half of your visitors bounce from your checkout page, it's time to do an in-depth analysis and find the source of this issue. 

Building strong relationships with your customers is pivotal to the success of your business. Understanding why people are leaving your site can help you make smart, proactive decisions that keep more people invested in your brand and reduce your cart abandonment rate. 
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