Small business guide to marketing planning part 2: situational analysis

SWOT signpostIn 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
  • SWOT
  • PESTEL
  • Competitor Analysis

Customer Insight

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.

SWOT

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 : 

SWOT matrix

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.

PESTEL

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.

Competitor Analysis

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

Advertisements

Competitor Benchmarking – How to Compare Competitors Online

Comparing competitor websitesCompetitor analysis is an integral part of any business planning. In a previous blog ‘Getting To know Your Competitors’ we discussed the importance of competitor analysis and how gathering insightful competitor intelligence leaves you better equipped to shape your own business strategy and plans.

In this post we will give some tips on how to conduct an online competitor benchmarking exercise, by comparing key competitor websites against your own. This is a particularly useful exercise for small business and start-ups as it is something you can undertake yourself with little cost. A bit of time spent researching competitor websites can provide you with some really valuable information and gives you a real feel for what your competitors are focusing on.

What competitors should you  include?

The first place to start is deciding which competitor websites you are going to examine. It is probably both unrealistic and counterproductive to include your whole competitor landscape. Instead carefully select who you consider to be your top one to three direct competitors alongside perhaps an indirect competitor that you could gain some interesting ideas from.  Think about using some of the criteria below to put together a meaningful competitor list:

  • From your own knowledge – who you believe to be your key direct competitors
  • Who poses the greatest potential threat
  • Other businesses who appear close to you in search engine ranking pages (SERPS) or who have a high page rank with the keywords you would like to be associated with.
  • New entrants to the market that you need to understand better
  • More indirect competitors that could provide you with some interesting ideas to help you move  your business forward

Online Competitor Benchmarking Table

Start by creating a simple comparison table of your chosen competitors. Put your measurements down the left and side and your competitors across the top.

Online competitor benchmarking table

Measurements – what should you be comparing?

Spend a bit of  time thinking about what measurements are going to be the most useful to your business. For example only comparing measurements in areas that you know you excel in isn’t really going to be of much value to you. To get you started, outlined below is a list of standard online comparison measurements you may wish to include .

1. Usability

“Don’t make me think.”  Steve Krug

Site usability is all about the user’s experience. Does  the website work well? Can an average visitor use the site and find what they are looking for without getting frustrated and leaving? Are the pages intuitive and self-explanatory?  A user shouldn’t have to think too hard about how to get the information they need.

Think about navigation. How easy is it for a user to navigate around the site? Are pages accessible within a few clicks? If a user gets lost is it easy to click back to the home page? Is there a site map or site directory?

2.  Brand Image & Credibility

Is the look, feel and content  of the website consistent with the brand image. Does the site reflect the values its brand conveys?  Does the practical experience on the website match up with the users brand expectations?

How credible are the websites and how do they establish their credibility? Do they use testimonials,  product reviews or client lists?

3. Brand extensions

Have the websites introduced any brand extensions? Have they used their brand to extend into other products or services? Are there any ideas or opportunities that could be used in your future business planning?

4. General Accessibility

Are the sites easy to load (you can see average page speed by checking out https://developers.google.com/speed/pagespeed/insights  ) Are the websites multi-device friendly? Do they meet Web content accessibility guidelines?

5. Levels of interaction

What are the levels of interaction with the customer?  Do they have a blog or community discussion forum?

What sort of social media engagement do they have.  What is their comparable use of social networks such as Twitter, Facebook, Google + ?

What devices or communications do they use to engage and convert their customers? Special offers and promotions, free trials, webinars, email newsletters.

6. Site content

What is presented to the user in terms of graphics, images, text and audio? Is the content up-to-date and time sensitive (offers, promotions and so on). Is there a good balance between information, products and services? What functions are available – is there a blog, discussion forum, news articles, search facility?

7. Search metrics

There  are number of free tools available that can help you put together a list of comparable metrics for yourself and you competitors.  Spend a bit of time getting to know how the tools work and what they can offer and you’ll be able to include interesting analytics in your comparison chart – such as page rank, traffic estimates, link analysis, website page speed, bounce rate and competitor keyword research.

Free tools for metrics:

https://adwords.google.com

http://moz.com/tools

http://www.alexa.com/

http://www.smartinsights.com/search-engine-optimisation-seo/link-building/best-link-analysis-tools-for-seo-and-online-pr/

Hopefully this gives you a good starting point for creating your own online competitor comparison table. Just remember to:

  • Choose your competitors carefully
  • Think about using measurements that are going to help inform your business and marketing strategy
  • Continue to review and monitor competitor websites at regular intervals.

Sun Tzu and “The Art of Small Business”

0548d8fGuest Author: Bryan Clayton

Bryan Clayton is a serial Entrepreneur and Co-founder of GreenPal

He helps consumers source lawncare providers via an online marketplace.

 

 

“So in war, the way is to avoid what is strong, and strike at what is weak.” ― Sun Tzu, The Art of War

ID-10031660

On the battlefield 2500 years ago Sun Tzu could not have ever known that his philosophies and teachings on warfare strategy would be immortal doctrines implemented into business strategy today.  His ancient text, The Art of War, has been highly regarded as a source of insightful strategic thinking for the Business world. But what do military generals and entrepreneurs have in common?  Are there parallels that can be drawn from military strategy and entrepreneurialism? Anyone who has ran a business knows the feeling that sometimes its outright war. Businesses by nature are competitive with each another. Sun Tzu’s thesis is to “win all without fighting,” or to win market share without heading into a bloody battle against your competitors.

Sizing up the competition

Sun Tzu says, If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

Sun Tzu advises us to intensely observe our competitors to identify what areas in the market place they are underserving, mainly with the intention to avoid a head on conflict, and a possible financial bloodbath.  By utilizing innovative technologies and consumer trends, he advises us to “know our competition’s weakness as well as our own, and more importantly, our strengths.” Ultimately, the discipline is to attack the opportunities in the marketplace underserved by competition, while not confronting your competition directly on their strengths.  

New Product Development

Sun Tzu says, “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

Sun Tzu’s teachings educate entrepreneurs as to the practicality of lean product development methodology. In its essence lean product development is creating a minimal version of the product with basic, core features. Starting by test launching that product to gain early user feedback while improving it little by little throughout the user feedback cycle process. This conserves resources and aligns the team’s attention on the actual product itself. Once the product is improved time and time again to a version with features influenced by user feedback, then it will be perfected for a full scale launch.  This is a “win” before going to war.  Sun Tzu says, “Defeated warriors go to war first and then seek to win.”

Team Building

Sun Tzu Says, “Regard your soldiers as your children, and they will follow you into the deepest valleys; look upon them as your own beloved sons, and they will stand by you even unto death”

Without happy loyal team members, your startup or company will probably not achieve greatness.  Sun Tzu teaches us, as the leader of your team you must focus on growing yourself by serving your people; leadership is servitude.  If you care about them, they will care about the organization’s success.  A unified culture will be instrumental in success of your team’s success and will add real purpose to your company’s mission, and why it even exists.   While your competitors will be dealing with redundant issues such as employee turnover and quality control, effective and authentic leadership will enable you to focus on the strategic direction and the growth of your company. Sun Tzu’s teachings are practical, focused principles that can guide entrepreneurs and business leaders have clarity of their vision, their mission, and their commitment to the success of their teams’ goals and objectives. While it might seem farfetched for entrepreneurs to relate themselves to warfare generals, Sun Tzu’s philosophies are relevant, and are implemented by successful business owners of today and ignored by the unsuccessful. SunTzu_smallBusiness

Getting To Know Your Competitors

Competition in Business

Getting to know your competitors is essential for any business – whether big or small, an established brand or new start-up. Love your competition because not only does it keep you on your toes and motivate you, but knowledge is power and understanding your competition provides you with lots of interesting information that can be used to mould your business and shape your marketing strategy.

I have always loved the competitive forces in this business. You know I certainly have meeting where I spur people on by saying “Hey, we can do better than this. How come we are not out ahead on that?” That’s what keeps my job one of the most interesting in the world. Bill Gates

Competitor Analysis

Competitor analysis is simply the process of monitoring and reviewing your competition, the products and services they offer and their adoption by their customers. Through this gathering of ‘competitor intelligence’ you can gain real insight that can be used to feed into your business strategy and marketing plans.

When undertaking competitor analysis keep in mind that your overall goal is to collate useful information that puts your business in a better position and gives you a competitive advantage over other companies in your industry.

The competitor landscape

There are a number of questions you should think about being able to answer from the competitor research you undertake. Beginning with a good understanding of who your competitors are.  Your competitor landscape is made up of both direct and indirect competitors. For example in the world of film magazines, Empire probably considers Total Film its most direct competitor, however its competitor landscape would include film bloggers, Guardian film online and even other interest magazines that may get chosen by a potential customer as an alternative reading choice that day.

Identify who your key competitors are but keep in mind the wider competitive environment and don’t forget to include international competitors if they are relevant. Remember if your selection of competitors to research is too narrow or excessively large you will struggle to get meaningful results.

Competitor SWOTCompetitor SWOT analysis

Carry out a competitor SWOT analysis on each of your chosen key competitors. What are their strengths and weaknesses – what do they excel at and what could they improve on? Are they doing anything that could be a threat to you?  For example have they just launched special price promotion,  new product or brand extension? What are they not doing (or doing) that provides a potential opportunity for your business?

When researching and comparing your competition,here are some questions you might find useful to think about including in your analysis:

  1. Where are you in position to your competitors? Who are the major players and who is the market leader. Where does your business fit in? Are you competitors growing  or shrinking?
  2. The four P’s. How do your basic four P’s (product, place, price and promotion) compare to those of your competitors.
  3. What are they doing well and what could they improve? How do your products or services compare with those of your key competitors – for example on quality, price and customer service.
  4. What is your USP and your competitors USP? What might make a customer choose your product or service over your competitors’ offerings?
  5. What partners and affiliations do they have? Are there opportunities here for you to develop similar affiliations with suppliers or associations?
  6. Brand and reputation. How strong is their brand? What is their brand image? What is their reputation within the industry (both with consumers and trade)? How successfully are they promoting their brand?
  7. Trends. What market trends do your competitors appear to be following (or not following)?

Start by researching online

A great starting point for small business is to do some website analysis by looking at your competitor’s websites. Creating a simple comparison table and undertaking an online competitor benchmarking exercise is a good way to get the ball rolling. Think about and compare competitor websites.  From this you can get a great overview of your competitors’ online presence and start  identifying potential gaps, opportunities and areas in which you could improve your own site.

And don’t forget, any kind of  competitor analysis should be continuously reviewed and monitored at regular intervals. Enjoy getting to know your competitors, and remember the better armed you are with valuable information the stronger position you are in for being both reactive and proactive in your business planning.