Research suggests that 93% of successful companies “had to abandon their original strategy – because the original plan proved not to be viable.”
That was the case for Ben & Jerry’s which pivoted from a retail shop to B2B to B2C pints.
That was the case for Chobani, which pivoted from feta cheese to Greek yogurt.
That was the case for LEGO, which pivoted from buildings to furnishings to toys.
But how do you know when to pivot and where?
Harvard professor Clayton Christensen wrote, “when the winning strategy is not yet clear in the initial stages of a new business, good money from investors needs to be patient for growth but impatient for profit.”
That is, if growth is slow, profit is essential.
But if growth is fast, profits can wait.
If both are slow, pivot!
It’s messy out there. There are no hard and fast rules. There is no one-size fits all solution.
But it helps to know. Businesses change. Profits and growth are contextual.
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Disruption theory (2:00 minute YouTube HBR explainer) describes how leading companies serve their customers through product improvements rather than invention.
Keurig’s innovation was capsule coffee and sustains their company with ideas like Brew ID which “recommends recipes with easy step-by-step instructions.”
It’s an innovation dilemma because sustaining innovations makes the money printers go brrr, like at ESPN.
These sustaining innovations fail when the customer Jobs-to-be-done changes.
“We started doing it for free,” Nate Duncan said on Wharton Moneyball in December 2022 about his NBA Strategy Stream show, “with the idea of eventually doing something like this back in the 2016/2017 season. We did it pretty much unpaid – our Patreon subscribers would throw us a few bucks but they weren’t obligated to – and we just built up a lot of reps doing it in the bad old days.”
Think about that. Duncan and his partner Danny Leroux worked “pretty much unpaid” to broadcast NBA games.
But they found an audience. They found an adapting JTBD.
Disruption theory also describes how leading companies can create both sustaining and disruptive innovations. One aspect is a separate P/L. But that takes financial, temporal, and status capital. Within any organization, what executive is going to suggest an unprofitable bet to create something people might want? No way.
“First time seeing this at restaurants…,” posted Mrs Monroe, “way to guilt customers to spend more”.
Commenters added: “tipping is a sham”, “servers don’t really get that money”, “I hate seeing this at…”. Some suggested subterfuge, a special and spiteful $0.01.
It’s too bad, and a chance for good copy.
There are many restaurants because there are many restaurant jobs: fast, casual, formal, status, and so on. Diners want to feel good.
Broadly, businesses like restaurants, sell two things: steak and sizzle. The tangible, measurable, structural aspects are the steak: how fast, how good, how much. The intangible, spiritual, and attitude components are the sizzle: how nice, how friendly, how fun. Intangibles can be measured, though not as easily (so we often don’t).
Part of a place’s sizzle is their copywriting, even when it’s time to pay.
The good. ‘Good’, ‘Great’, ‘Wow!’. Translating feelings (this service was good) into actions (tip 15%) helps customers. People, like rivers, follow the least resistance. Make it easy. Also good are the calculated tips.
The bad. (1) Misuse leads to dislike. One commenter claims their local Taco Bell uses this same interface – tips and all. That’s fine, I guess, but doesn’t jive with the TB strategy. Hence the frustration.
Also interesting is why Mrs. Monroe feels guilty. Was this a serve-yourself place? Family style? Buffet? There’s a disconnect between her expectations and experiences.
(2) People like choices. There’s technically thousands of tip amounts, but we only see six. Especially with money, people do not like to be told what to do. Better would be a slider like for a phone’s brightness, or a knob like for a stereo’s volume.
(3) ‘Best Service Ever!’ is a twenty-five percent tip? Whoever programmed that has not (or forgot about) eating out with kids. Best ever deserves more. Setting this upper amount also frames the range a customer sees.
(4) ‘Skip’ could be ‘Skip and speak with the manager’. This forces diners to match their words and actions. Was it bad, or just a bad mood?
The confusing. None.
…
This image lacks context: the quality, service, and kind of meal, the representativeness of the commenters, the individual’s profile. None of what’s written may be a solution. But thinking through the options might get to one.
Good copy sits within the broader bucket of communication which sits within strategy which works best when the sub-actions align.
Good business strategy is homeotelic, single actions work toward multiple goals. Aldi has a good strategy. Dominos has a good strategy. Trinny of London has a good strategy.
Good strategy balances what’s made, how it’s delivered, and how it’s communicated: product, placement, promotion. Aldi uses private labels to control the product, small footprint stores to sell from, and focused promotion. Those fit.
What does a business do well and what do customers want well done? Organizations answer these questions and the best organizations do so in a homeotelic way. This is an example from my local pickleball store:
For today and the next two days only (ends Wednesday 9/7)…we are offering a special Labor Day 20% off sale on Bags & Apparel and 10% off all paddles (and receive a FREE Paddle Cover with your paddle purchase).
Go to our website by CLICKING HERE.
For Bags and Apparel, use discount code LaborDay20 at checkout
For Paddles, use discount code LaborDay10 at checkout and receive a FREE paddle cover too.
NOTE: You can only use one discount code at a time, so if you are buying bags/apparel and a paddle you will need to place two (2) separate orders.
If you know what you want and want to go directly to the page, here’s the quick (direct) links:
Bags > CLICK HERE
Apparel > CLICK HERE
Paddles > CLICK HERE
Any questions, email
The good: Scarcity drives urgency and attracts attention. For the I’ve been thinking about this group, this email drove sales. The free paddle cover is good too.
The bad: (1) Discounts are heterotelic: more sales less brand value. All value is perceived value and premium products – like these paddles – shouldn’t be discounted. Price is a proxy for value. Here it is lowered. Freebies, gifts, ‘two-for-the-price-of-one’ maintain the core product value and have other benefits – see below.
(2) Why buy? Here customer language shines. Buy a bag and we will send three balls because you’ll have the room. Or, when you miss-hit at the end of the day your paddle is too heavy. Or, summer is winding down, get a long-sleeve shirt while they last. There’s nothing in this copy other than CLICK HERE TO TRANSACT NOW. As outsiders we don’t know the customer’s language, but a business owner should.
(3) Hats, shirts, and towels retail for thirty dollars. These lightweight packable items are perfect for shipping, have good margins, and are an easier part of profitability. But they are also a form of CAC. Reducing profitability per item raises the revenue, a homeotelic approach. People pay to be walking billboards. These items are great thank you gifts, with the purchase of a premium paddle. Gifts also seed new product lines and delight consumers.
The confusing: CLICK HERE. Multiple discount codes.
Labor Day Sales (like this) raise revenue but reduce brand value. Labor Day Sales are superficial and reactionary. Labor Day Sales are heterotelic, not homeotelic. Labor Day Sales should follow, not precede, Alchemy.
…
Here’s an excellent example, received around the same time.
Ridge speaks the customer’s language visually: my wallet is too fat. Why buy? Does it carry my cards and cash? Oh, it does. It’s the best way ever. Not ‘best’ via test, but ‘best’ is expert language, like someone judged wallets and this is indeed the best. Don’t CLICK HERE like a child, instead shop our wares like an adult. There’s no sale, but there are premium products (good, better, best) and because value is relative, ‘good’ appears discounted to ‘better’ and ‘best’.
…
Outsider commentary is a challenge. It’s another perspective, unaffected by sunk costs, and angled away from the status quo. However it’s also ignorant of successes, goals, and pesky problems like ‘oops we made too much’. Broadly sales are bad unless they are baked into a business’s strategy (like Domino’s Pizza).
Homeotelic, introduced here, applies everywhere. If someone learns to cook at home they save money, eat healthier, and gain skills. If someone joins a gym they meet new people and get healthier.
Me, a box of cereal from Aldi, and our kitten. When I bought this cereal the checkout process was 40% faster than rival stores. Plus the cost savings! Sure I had to collect my cart – with the quarter deposit in hand – and also return the cart, but often I meet someone half way and we do the Aldi parking lot exchange of quarter for cart and some goodwill good-to-see-yas.
This Aldi aesthetic is intentional. The cart, the product, the extra long barcodes for the extra fast cashiers are all tactics that support a strategy. I’d heard tactics are not strategy but it’s through the Aldi aisles and Marc Lipsitch’s interviews that the idea becomes as clear and legible as that bar code.
One of the lessons from Covid is how much conditions matter. We’ve learned that individual treatments are dependent on disease stage. We’ve also learned that societal actions are dependent on infection stage. The travel ban, Lipsitch said in May 2020, “was a tactic not a strategy, it was an attempt to show we were doing something rather than a piece of a strategy to make us safe from this virus.”
Strategy is important because our resources are limited. Sure, I’d love to invest in the cryptocurrency of the moment as a lottery ticket but there’s no extra dollars in our investing budget to allocate to a different strategy.
“In the beginning of the intense phase, New York City was working very very hard to do contact tracing at a time when they knew they had lots of cases and didn’t know about most of them. That’s exactly the setting where contact tracing can’t work. No matter how hard you fight the 10% you know about, you’re not doing anything about the rest.” – Marc Lipsitch, May 2020
When tactics fit together like puzzle pieces it creates a beautiful strategic picture. Aldi’s boxes are optimized for speed rather than customer acquisition. Classic cereals use bright colors and cartoons to scream pick me! The cereal aisle is the competition. It’s Cap’n Crunch vs Cinnamon Toast Crunch. Aldi’s products are private labels, so the competition is between big box stores not boxes in stores. The Aldi CAC is speedy checkouts, self-service, and quality goods.
A good strategy has a collection of homeotelic responses. Aldi is one example, but they’ve had almost eighty years to figure it out. Covid is a non-example, but we’ve learned some good lessons and it probably won’t happen again.
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There’s a certain amount of what economists call ‘transaction utility’ at Aldi too, we like finding deals. Also, Lipsitch is such a balanced voice on Covid or any field with some uncertainty in the future.
The Waiter's Pad 