What is a pivot?
“A pivot is a change in strategy without a change in vision.”
– Eric Ries
Pivoting is a lean start-up practice that helps a business iterate on their business model to find the best way to meet the needs of their customers. Eric Ries calls it ‘iterating from plan A to a plan that works’. It’s a great way to respond to changes that mean the current business model is no longer viable.
Our Plan A
Our plan A was a three tiered business model that gave us the means to increase our offering for customers with lower upfront costs and an increased delivery speed, to test opportunities and learn what works, and to scale the business and make more money for life saving research. Tier one was acting as an affiliate to market products and services that our customers might benefit from, and which they would want to use via the BHF as it would involve a contribution to life saving research at no cost to themselves. This affiliation model gave us a way of quickly testing a new service or product offering whilst keeping set-up costs to a minimum, and learning how to market the new offering to a potentially new customer group. Tier two was drop-shipping and allowed us to take the learnings from tier one and iterate the opportunities that were working into a more profitable model. This tier had slightly higher set-up costs but the increased margins made it a commercially viable option for increasing the product range without having to buy stock or handle distribution. Tier three is our stock-held option. It means greater upfront costs and longer set-up times but greater profits and more control over product development.
In identifying which model would work best for which opportunity we would first consider our customer segments. The products offered through an affiliate link could work for those customers that were further away from the cause as they wouldn’t feel short-changed by going to a third-party website to make the purchase. But those customers who were more closely aligned with the cause would be more likely to want a branded experience of ordering a new product as they would want to feel part of the BHF. Pretty much all our branded products would be in the stock-held model, so we wouldn’t necessarily start with a affiliate or drop-ship model for those products but would still test them by sourcing non-branded versions to learn how they sell.
Testing and learning to drive continuous improvements in everything that we do is something that we’ll always use in whatever plan we’re delivering.
Pivoting away from weaknesses
What we learned through implementing this strategy was that there were some pretty significant barriers that were preventing us from delivering at the speed we wanted. They were mostly internal barriers; not enough resources in the right areas, bottle-necks in departments that worked in different ways, misalignment of objectives.
And as we thought about the direction the ecommerce business would grow over the next five to ten years we realised that it was out of alignment with other parts of the business. As Ecommerce was developing increasingly complex models to meet increasingly diverse customer needs the rest of the business was working towards consolidating and simplifying itself.
Learning about the weaknesses in our plan A meant we could pivot to find a way that worked better.
Pivoting towards strengths
Meeting the needs of our customers is still our top priority. We’re still all about providing BHF supporters with the means to show their friends and family that they support the nation’s heart charity, be it through wearing a pin badge, a wrist band or a hoody. And we’re still all about raising funds for life saving research. Ecommerce is the part of the BHF that gives supporters a way to add value to their experience with the BHF, whether they are entering a fundraising event and want to wear a BHF t-shirt or having our pin badges as wedding favours at their wedding, in return for money. And 100% of our profits still fund life saving research.
So, we’re going to move to be better aligned with other parts of the charity, and leverage their strengths. 750 shops with millions of customers? Let’s tell them about the Online Shop. Tens of thousands of people entering fundraising events? Let’s develop clothing they’ll want to wear whilst they’re training. CPR training doubles the chances of surviving a cardiac arrest? Let’s provide CPR Training Kits at an affordable price so small businesses and families can learn how to save lives.
This new plan isn’t going to come without it’s challenges, but as we implement it we’ll learn even more about how to give every supporter an excellent experience of the BHF and raise more money for life saving research.