Chances are, you have a Netflix account or know someone who does — by 2020, Netflix had around 73 million U.S. subscribers. The company is one of the most dominant forces in American media today, and it’s even producing its own films, such as The Irishman, with A-list Hollywood actors.
But they didn't start that way. People who rented movies in the late 1990s and early 2000s — before streaming became big — remember Netflix as the company that mailed you DVDs so you didn't have to go to the video store.
The company carved out a nice niche, but reinvented itself to take a bigger bite out of the movie rental business: it launched an online streaming service in the late 2000s and transformed the media landscape.
For every successful reinvention story, however, you’ll find plenty of examples of businesses that failed to adapt and collapsed. Blockbuster is a prime example — had it repositioned itself as a Netflix competitor early on, it might have had a chance, but it didn't see the future the way Netflix did.
These lessons are all fine and good for corporations with deep pockets — but what can a small business with limited resources do to reinvent itself? Here are a few tried and true methods for reinvention you should try if you feel your business needs a change.
1. Create a new product
A new product may give your business a shot in the arm. Don’t ditch your bread and butter products, but if sales are lagging, perhaps it’s a sign to go back to the drawing board and do some market research to see if your customer base is craving a new product you aren’t offering yet.
Use surveys to ask your customers their most pressing needs, which will give you insight into what additional products you could offer.
Success story: Netflix’s launch of a streaming service in 2007 is perhaps the best modern example of a company reinventing itself with a new product launch. It’s wise to hold on to your money-making products in the meantime to keep the lights on — Netflix didn’t immediately ditch their DVD mailing service, after all. In fact, believe it or not, Netflix still had 2.7 million DVD-by-mail subscribers as of 2019. With a smart, diversified strategy, a bold new product supported by solid market research can take a company to the next level.
How to do it low cost: Rather than create a new product out of whole cloth, save money by adapting your current products to meet the need. More than likely, your customers simply want a better or modified version of your current product to meet modern needs. Make those tweaks and then market it as a new product to get people excited.
2. Identify an upsell
Upselling involves offering a better version of a product or enhanced services when a customer buys, or perhaps later down the road when you are following up with the client.
Upselling allows you to build off your current customer base, which is generally easier to do than finding new customers because your current customers already know and trust you.
Success story: Extended warranties, rust proofing, gap insurance — most new car customers are bombarded at the dealership with a host of upsells by an eager salesperson. For many of us, it's downright annoying. But dealerships do it for a reason: upselling works. One study shows that one in every 25 customers will purchase an upsell offer. That means if you're making 250 sales per month, simply offering an upsell gets you an extra 10 sales.
How to do it low cost: Take your current product and separate it into a standard version and a premium product. For example, if you offer IT security services to small businesses, you might offer your standard package and then a "premium" version that assigns a personal concierge to the client for an upcharge. You may have been offering this before anyway, but found only some of your clients were using it. It may be ideal to offer this as an upsell, which comes at no additional cost to you.
3. Expand your market
Many businesses fear contacting different segments of the population, but this is a fundamental part of expansion and company growth. For example, if your consumer products are reaching primarily men ages 35-49, modify them to appeal to women ages 35-49 as well.
And after that, you could look into expanding into younger or older markets. Don’t stay stuck in one market because that’s the way you’ve always done it.
Success story: Indian corporation Wipro is one of the largest IT companies in the world, with $9 billion in annual revenue. It's a little staggering to learn that Wipro stands for Western Indian Vegetable Products — its core business back in the 1940s. But as the company evolved over the years, it identified different markets, making various consumer goods before eventually hitting the jackpot with IT.
How to do it low cost: Identify what low-cost tweaks you can do to make your product or service appealing in a different market. You may simply need to adjust the marketing messaging to go for a younger demographic. It may mean a change in sales strategy where you have your salespeople contact people who typically don’t buy your product because you never contact them. Or it could be a minor adjustment to the product itself to address the reasons why those other customers don’t buy.
4. Find a new niche
Sometimes you get hammered by the competition that has deeper pockets or was just faster to the market than you. When this happens, take a deep look at what you do well as a business, and identify a niche you can fill that isn’t choked with competitors.
This may require appealing to a smaller market, but with a more focused product and premium features, you may find more profits there.
Success story: Garmin dominated the personal navigation market in the late 2000s and into the early 2010s to where their ads were ubiquitous — particularly around the holidays. But the sudden emergence of smartphones almost immediately snatched that market away from them. However, the company reinvented itself and shifted more focus into sports watches and activity trackers, and its early entry into this market has allowed it to compete well with big names like Apple Watch and Fitbit.
How to do it low cost: Often, appealing to a niche market simply means a shift in company strategy. In many cases, you can decrease your sales and marketing budget because you’re focusing on a more targeted niche. Focus on developing personal relationships with those customers and building a loyal clientele who will pay premium prices for your high-quality, more focused products.
5. Change your marketing strategy
If you feel you must reinvent, you may not need to change your market or your product at all — instead, look into shifting your overall product marketing strategy. It’s easy to waste money on fruitless efforts in marketing, but it’s just as easy to shift direction and get more frugal with your marketing dollars.
Success story: Old Spice, which debuted back in 1937, was seen as an outdated brand by the public in the early 2000s, resulting in a massive rebranding campaign that attempted to give the product younger appeal. Thanks to an extensive ad campaign featuring humorous and irreverent ads, the brand has reclaimed much of its market share.
How to do it low cost: Even in this age of advanced analytics, it’s tough to tell what your marketing strategy is doing to move the needle. But analytics can help a lot. Use software to monitor your marketing efforts and take a deep dive into the numbers to determine where your money is having the most impact. Use the 80/20 principle to determine which 20% of your marketing efforts produce 80% of your results, and make a radical shift by pouring the rest of your marketing dollars into that part of your business.
Use software tools to help you reinvent your business
When doing something as difficult as reinventing your business, you need all the help you can get. The Blueprint has reviewed the top email marketing software and marketing automation software to give you a leg up on the competition.
These platforms make it easier to overhaul your marketing strategy and gain actionable insights through advanced analytics so you can identify the most efficient ways to spend your marketing dollars in service of your new company strategy.