I really feel like the question “should we change our business strategy?” is a question that every entrepreneur has experienced. I want to relay some of my experiences with either deciding to stay the course or making significant business changes. I hope this can help someone in settling this very difficult and oft-disturbing question.
My philosophy is this: Believe, single-mindedly, that my strategy can only yield success. When reality shows me otherwise, abandon it without remorse and try another approach.
Disturbing news from an accountant
We were hot shit. Slinging jerky and taking names (onto an email list, ha-HA!), we had the world by the meatballs (OK, terrible puns are over).
Except we didn’t. Profits were shit. Debts were mounting. We had trained our customers to expect discounts we couldn’t sustain. Though small, we had sustainable profit. We had, in my opinion, spent like we were a VC-backed unicorn of a jerky company.
We talked over our recent financial reports with a friendly accountant. I remember him saying: You’re making money, but none of you will be retiring in the next 100 years.
It was a body blow and boy did it sting. Fortunately, we did have a backup plan: create a fulfillment center based firmly in excellent customer service and highly transparent pricing, a company that would act like a real partner to eCommerce businesses. With this vision in mind, we bet everything on the fulfillment center idea.
How do I sell????????
In a few short months, we were experimenting with our first sales funnel.
At the time, it was all numbers for us. I made a big deal about them and really pushed us to focus on them. We thought the fact that we were pushing 99.98% line-item accuracy would effortlessly close deals for us. We were blindly sending cold emails to executives of the largest eCommerce stores we could dig up on Google.
When I write it like that, I kind of have to laugh at myself. We had some 100% luck-based hits in the beginning but it was obvious there wasn’t much traction generated by those tactics.
We eventually (and very naturally) realized that each one of us were really quite excellent at different parts of the customer acquisition process. We rewrote our entire outreach strategy around our strengths and again started to churn away. With the incredible results we’ve seen in the last 6 months, it’s pretty clear to us that we’re on a good path.
We are not worthy!
Shortly after changing our sales & marketing tactics, we quickly began doubting ourselves once again. This time on price. That is a terribly rough place to be. We had a certain price range that we believed was very fair. We weren’t yet billionaires (I’m exaggerating) so we must be wrong!
Coinciding with this questioning of our prices, the biggest client we’d ever seen floated into our sales funnel. They demanded a price point significantly below what we believed was reasonable. We placated them. It seemed reasonable given the information we had at the time.
The results were a disaster. About a month after beginning work with this client, we learned that their business required huge amounts of labor that we were not aware of during the initial negotiation.
We were forced to renegotiate service charges for this client. While exceptionally, even admirably understanding and patient, the client was financially forced to separate. We used this experience to better define what type of business is a best-fit for mutually excellent business.
The super generic, uplifting, motivational advice.
We have always been highly keen to experiment with, monitor, and re-tool our business decisions at Ships-A-Lot. This, above all else, has been the one winning strategy for us. Like Max just said to me while I was writing this article:
Be flexible, leave your ego at the door, experiment courageously, and don’t stick with failing tactics.
Some more specific advice (listicle included!!)
We talked a bunch about paid advertising strategy when we were discussing this article. Since our anecdotes may not be obviously applicable to that particular business tool, I wanted to give some of the concrete questions we ask ourselves when considering a change in direction.
- Why do I believe that this process is failing?
- How does this process score on my (hopefully) very concrete failure/success metrics?
- Is my use of or strategy with this tool actually geared for the outcome I desire? (For advertising: is my goal to generate ROI/profit from advertisements or to grow my customer base and/or brand at the expense of capital?)
- Am I being too reactionary? Is this a knee-jerk? Do I have good data right now to draw a useful conclusion about performance?
- What are my alternatives? What makes them have better potential performance?
- Have I consulted with an outsider yet? (This has been really helpful for me. It forces me to make really bulletproof arguments and defenses)