Staying on Track While Diversifying a Business Steer the company in new directions without alienating the traditional customer base or losing sight of the core mission.
By Howard Hitchcock Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Every company strives to have the dominance of recognizable brands. From small startups to powerhouse companies, all work hard to foster innovation and creative thinking to relate to millennials and change makers.
Many business owners don't realize that with the adventure of building a new product and diversifying the company in new directions, there's the risk of losing the brand's identity.
At Lionel Trains, my 114-year-old model-train company, I couldn't ignore advances in technology. Nearly a century ago, this firm was among the first to create an electric train set. Today, that heritage is kept in mind as my staff integrates new technology into the business to offer remote controls and iPad functions for model trains. Plus there's a new partnership with DC Comics.
Before any business leader is tempted to become such an aggressive visionary that the new ideas alienate the core audience and prospective customers, he or she should follow these tips to stay on track:
Related: How to Diversify Your Company and Tackle New Industries
1. Evaluate your resources.
Many companies are tempted to hit the restart button when moving in a new direction, with choices ranging from fresh messaging to new hires. Before wiping the board, take a closer look at current resources to find the value in each one.
The existing employees may not readily embrace the new direction or know how to do so, but keep in mind their company knowledge and client relationships, which are rich assets. Consider working with your employees to support them through the transition, giving them a foundation in the new direction.
Within the past five years, I've seen a growth in technology that affects Lionel's business, internally and externally. It has expanded the need to hire social-media coordinators, content writers and even video editors. Blending the old and the new, the company's teams are learning and using the online tools to boost sales.
As the company welcomes incoming employees, encourage the new and existing teams to work together. This will enable the two groups to share valuable experiences, build a solid dynamic and cultivate a better working environment. Having the best of both worlds, the company will be armed with the skills, experience and resources to satisfy customers. After all, the best brand ambassadors are employees.
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2. Keep a pulse on the industry
It's certainly important to stay relevant to today's youth as they'll one day be part of the core audience. But determining where and how to grow the business requires listening to current customers. They offer the best insight on the company's strengths and opportunities.
My company is expanding its digital horizons with the addition of Lionel Tracks, a site celebrating train culture, we are able to extend our customer contact and conversations while boosting our online presence. To reach the younger audience, we developed Lionel Battle Train, an iPad game for kids, that blends tradition and gaming. Other new resources like online videos and tutorials have helped us better educate and inform customers.
According to an Oracle consumer research study, 73 percent of consumers want friendly employees and better customer-service representatives. By paying attention to customers and developing user-centric content, companies can retain loyal patrons.
Aside from developing customer-satisfaction surveys, take the time to monitor consumers' habits and analyze the data. The results can guide the organization to developing content or products aligning with a market or company need. For example, if there is a spike in online purchasing, integrate more digital technology into company content, whether it's by being more active on social media or simply embedding a share button in electronic newsletters.
3. Engage your core audience as well as newcomers.
A company that's pursuing a new direction might face the challenge of juggling two segmented audiences: the core audience (loyal customers who have followed the corporation's brands) and a new audience (consumers interested in the updated offerings).
The core audience might not embrace every new product line or brand image immediately, but the company can convert them into adopters by educating them about the benefits of the fresh venture. This can be a slow and arduous process, but with 89 percent of consumers willing to purchase from a competitor after a poor customer experience, according to Oracle's research, it's imperative to be responsive when clients ask questions and work with the customer-relations team to provide better service.
On the other side of the track, members of the new audience that the company has worked hard to capture might not be familiar with its brand. Start by communicating the company's values and illustrate why the enterprise is relevant to them. A study by Universal McCann found that 71 percent of Internet users today are more likely to purchase from a company that they're following online. Find out where and how consumers like to interact and connect with them by offering content tailored to their interests.
When building and sustaining a business in fields with convergence and change, pause and reflect on how a transition might affect the company's culture and identity and ultimately its customers.
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