In Part 1 of our guide to successful marketing planning we discussed the importance of putting time aside to plan your marketing for the year ahead. We looked at the SOSTAC model as a simple and effective framework to follow when creating a marketing plan for your online business. Part 2 of our guide looks at situational analysis in more detail. Situational analysis is the first step in putting together a useful and relevant marketing plan.
Situational Analysis : Where are you now?
Before you rush headlong into creating your marketing plan for the year ahead, you need first to have a thorough understanding of where your business currently stands. Without this knowledge you are unlikely to be able to formulate a successful marketing strategy or steer your marketing activity in the direction it needs to go in order to support your overall business goals. Carrying out a situational analysis will provide you with a solid base from which to build the rest of your plan around.
Situational analysis essentially involves reviewing your internal and external environment through carrying out various useful analysis exercises. Including:
- Customer Insight
- Competitor Analysis
Customers should be the central focus of any marketing. Understanding your customer’s characteristics, behaviours and needs is fundamental to whether your business succeeds or fails long-term. Only through having a thorough understanding of your customers can you deliver what they want and achieve customer satisfaction.
Gathering as much data as you can about your customers is important. This could be through quantitative data such as demographics from registration forms, online behaviour from web analytics or more qualitative research such as feedback from social media interactions or lifestyle questionnaires. The more information you have the more you will be able to segment your customers into target markets with shared characteristics and offer more relevant and personalised communications, which in turn is more likely to lead to a higher conversion rates.
A SWOT analysis involves looking at your internal environment by identifying your businesses strengths and weaknesses and the opportunities and threats provided by your external environment. A simple SWOT matrix like the image below is a useful way to list them :
Performing a SWOT enables you to identify and compare your key strengths and weaknesses alongside opportunities and threats from the external environment. This way you can ascertain the areas you are strong, the areas you can potentially improve, opportunities to exploit and threats you need to manage. Essentially it is about taking advantage of the strengths and opportunities which are going to help you achieve your objectives and identifying and managing any weaknesses or threats that may hinder you achieving your objectives.
A PESTEL analysis looks in more detail at the influences of the surrounding external environment and is a great exercise to get you thinking about external factors you may not have previously considered. PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal – obviously some factors will have more of an impact than others:
- Political – monitoring legislations from national and international governments is important. For example Government’s approaches to the Internet and its use could have a huge bearing on how online businesses operate.
- Economic – economic factors from different countries can have a wide-reaching impact on the spending power of both individual consumers and organisations – for example what effect might a steep rise in interest rates or changes in exchange rates have on you or your customers?
- Social – What social trends are occurring? For example the last few years have seen a significant growth in the older generation going online – what opportunities might that offer your business?
- Technological – changes in the technological environment are often rapid and can have a knock on effect on your business. For example the massive rise in m-commerce has made it imperative that online business are multi-device friendly.
- Environmental – Ecological and environmental factors may affect how a company operates. For example consumer pressure for fairtrade, sustainable and ethically produced goods may offer opportunities but could also drive up costs?
- Legal – changes in law can effect how your company has to operate. For example how would changes to the data-protection act change how you collect and store customer information?
Once you have brainstormed all the relevant external factors, you can then classify them as high, medium or low impact and identify whether they are a potential opportunity or threat that needs to be managed.
Keeping abreast of what your competitors are doing is of paramount importance as it enables you to gain competitor intelligence that can be fed into your strategy and planning. Competitor analysis is simply the process of monitoring assessing your competition. We’ve examined competitor analysis in detail in our posts Getting To Know Your Competitors and Competitor Benchmarking – How to Compare Competitors Online, so take a moment to look at these posts as they’ll help you identify your competitor landscape and show you how to gain competitor insight through digital analysis.
Spending some time thinking about and indeed, carrying out some of the analysis we’ve discussed will help ensure that the foundation of any strategy or planning you are undertaking is an accurate reflection of you businesses current situation. It will make certain that your marketing objectives and strategy are all pointing in the right direction to grow your business and support your business goals. In Part 3 of marketing planning we’ll be looking at SMART objectives and formulating a marketing strategy.
SWOT signpost image courtesy of Scottchan at FreeDigitalPhotos.net
We’d love to hear your experiences and thoughts on this post, so please do leave a comment