Questions

we run an agency based service that connects customers to writers. This is profitable as we get up to 60% gross margins. We control pricing, management, recruitment, services offered and only just allowed direct communication. The problem here is that our growth has reached a plateau, and due to competitive rivalry and our pricing model, we feel we are losing out on growth. An idea that has occurred to me is to swith to a marketplace model, offer customers and writers more power and work on the network effect (and reduced pricing ) to grow the business. Is this a good idea? If so, how can I pivot successfully? If not, then what wi you recommend. Happy to book a follow on call if your answer is helpful.

Hi! Great question, It seems that your business model is fairly thought out and your growth has haulted due to lack of strategic marketing and business development efforts.
Put it in context, imagine if Nike was asking if they should consider making something else than shoes because Adidas has increased their sales this year, which means Nike lost that market opportunity. What would they do?
They become aggressive in their pricing, they apply super targeted marketing to a particular subset of their demographic, bundle up products. In your case you can also build (more?) partnerships with bloggers too.
You can restructure your pricing to include the new "marketplace" idea service under a premium fee for the added transparency, more agile development due to increased communication, convenience. Unless you have an unconscious reasoning for trying to consciously make this decision to pivot, I would recommend simply becoming more strategic with your effort to reach new consumers and providers. One tactic is to have a great community of writers to where the quality of their work is enough to sway clients your way, for this there is a variety of creative approaches. :)

Best of luck.

Humberto Valle
#UnthinkStrategy


Answered 9 years ago

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