TLDR:
- If you don’t already, develop key performance indicators.
- Want to know the best way to answer the question? Go straight to the source: the customer base
- The market is changing 24/7, and so are the tastes and preferences of consumers. Conduct analyses to determine if there are areas where you could better differentiate now
- Is your business’ financial health reflective of the time you’ve spent building your business?
Determining when it may be time to pivot
So you’ve been building your business these last few months, and though you’ve been seeing results, you’re pondering if the current strategy is as effective as you thought it’d really be.
But how can you accurately answer the question?
We’ll be discussing 5 metrics you can use to validate whether or not your business does indeed need a shift in strategy.
1. Key Performance Indicators (KPIs)
These are essential metrics that reflect the overall health and performance of your business. Common variables include:
- Revenue Growth
- Customer Acquisition Cost
- Conversion Rates
It is also essential to include variables that are specifically relevant to the niche your business is in, and use them to measure time-bound targets you may or may not be achieving.
2. Customer Feedback and Satisfaction
There’s no better way than going straight to the source: your customer. Analyze the customer feedback you’ve received and identify any recurring themes you see, particularly if they’re of a negative connotation, as well as conduct surveys within your niche and the target demographic.
If themes you consistently notice in feedback are negative, then it may be time to make the change.
3. Market Trends
The market is changing every day; it’s probably changing even as you’re reading this article. The tastes and preferences of consumers and their behavior constantly change.
You can stay ahead of the curve by conducting competitor analysis and determining if there are areas where you now need to differentiate and improve.
4. Financial Performance
How well your business is doing financially given how much time you’ve invested into the business may be the most significant variable. Evaluate factors like revenue, profit margins, cash flows, and return on investments.
If you’re not getting the return you’ve projected to get at how many months old your business currently is, you’ve probably got to make the change.
Always keep in mind that as times change, people change. It may not necessarily be that your business was a complete bust and your product is still of intrigue to customers in your niche, but merely the case of better strategizing how to get that piece of the market share you deserve.