I am not so concerned about the method or methods you use but more importantly that you or someone is DOING an analysis.  In today’s age with all of the types of methods and tools available, I find it absolutely amazing how many companies are either not doing any analysis or do it once and think they are done.   Like death and taxes, one thing you can count on is that your competitors are doing an analysis on you!

Given that let’s first start with the SWOT analysis, some pros and cons regarding it and then a few alternatives methods.

First, SWOT analysis is the identification of Strengths, Weaknesses, Opportunities and Threats that are related to the strategic and tactical direction of a company.   The “scanning “or analysis of the internal factors that relate to your direction and strategy are the strengths and weaknesses.  Examples of strengths could be vertical integration or distinctive skills/ intellectual talent, while some weaknesses could be a poor sales channel or lacking of sufficient financial resources.   Scanning of external forces are opportunities such as new markets or new products, and threats are areas like governmental regulation or lack of market share.  While SWOT analysis is one of the most commonly used methods (2007 global survey of top executives by McKinsey stated that 82% used SWOT, second to competitive analysis)   it like other methods has its pros and cons.

The pros are:

- Easy to understand and the four categories can be acknowledge quite quickly.

-It really does not require a rigorous level of research

-The context is usually within the understanding of the corporation

The cons are:

                -Lists can become long

                – Lists can be poorly defined and ambiguous

                -Not a very detailed or well verified list

Some suggestion on how to improve your strategic analysis:

1-You can augment the SWOT analysis by adding a weight and rating factor to each entry on the SWOT analysis.   The weight is a factor (0 to 1)   that ranges from very important to not important for each internal and external entry.  Next have a rating factor (1 to 5) that indicates how well your company is doing regarding this entry.  Multiply the weight times the rating to get a weighted score. Next, rate each entry how it might impact your company in the short or medium or long term situation.   These enhancement greatly helps eliminating a lot of the guess work, ambiguity, long lists and improves the overall ranking of the to be developed tasks as related to each entry.

2-Another variation of the SWOT analysis is to form a matrix just like one does in the SWOT but have the Strengths, Weaknesses, Opportunities and Threats on the vertical and horizontal axis and is the four sectors produce Strategies for strengths for working on opportunities (SO), Strategies for avoiding threats (ST), Strategies for opportunities to overcome weaknesses (WO) and WT, strategies for a company to minimize weaknesses and avoid threats.

3-A different analysis method is the Balanced Scorecard Method; this tool is used to align business activities to the strategy of the organization.   It works off of four areas; 1-financial by using important financial “levers” or targets,2- customers, it  tracks and measures inputs about how customers view the company,3- business processes that measure where the business excels and 4-growth, measurements to see if the company is growing and improving.

4-A fourth method is the PEST analysis which stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental and scanning component of strategic management.   Here we introduce external factors that in the current environment have become critical to the success or failure of many companies.  One very current example is the price of oil and gas and its impact on companies that are very dependent on oil and gas in one form or another.

In summary, it is not so much which method or tool one uses but most importantly, you must do some form of analysis and do it on a continuous basis!  If you would like to know more about these analytical methods or other methods that might be well suited to your company, send me a note. 

RHL 03/14/12

Before I explain, let me state that I am one of those sport fans: I watch, participate and discuss a wide range of sports.  While auto racing is not one of my most favorite sports, I do watch a variety of auto racing and I have been to a number of NASCAR and Formula races. And to be totally open, one of my “bucket list” activities was to drive a race car.  That item got checked off last year when I rode in a NASCAR car at Daytona and did three (3) laps at an average of 180+ MPH.  That was an experience I will always remember, and from it I now have a tremendous appreciation for all race car drivers.

Back to my point, while Matt won the race, Brad Keselowski (another driver) did some tweeting during some of the caution delays and it has been reported that his followers tripled or went from about 50,000 to over 200,000 followers in a manner of minutes.  You can see one of his tweets and picture here   https://twitter.com/#!/keselowski/status/174327635093106688/photo/1

Now, I will admit some of those followers were probably people in the grandstand, but many were not and the main point is if you have a product or service, do not underestimate the power of social media in getting your product or service some attention and business. If you know your targeted market(s) and the critical issues, then social media is a great way to share your concerns, identify with your followers and build a relationship. If you are not convinced, I would recommend that, as a minimum, your company monitor what is being said about your product or service or competitive products and services so you can gather free information about what the end users are saying and looking for, both positively and negatively.

And by the way do what Brad Keselowski did; pull over in your car before you tweet.

RHL 3/1/12

Q4 is the usual time for pulling together plans and budgets for the following year.  In the past, I have written about the problems and issues that this process generates, but decided this year that a checklist might be of better use.

  __  Strategy, goals and objectives – Are the goals and objectives for 2012 articulated?  Is the strategy to reach these goals and objectives clearly spelled out, with priorities specified?

__  Budget and staffing – Is the budget for 2012, even at an approximation level, available?  Is the headcount forecasted to go up, down or remain the same?

__  Support groups – Are all the support functions (customer support, field services, product services, etc.) in line and capable of supporting the plans.

__  Events – Are all the major events/milestones known, i.e., new product introduction in Q1, major trade show in Q3, major partnership agreement in Q1?

__  Cost and profitability – For multi-product companies, are the costs, by product, going up, down, or remaining the same?  Will pricing remain the same or change?

__  Policies – Is there any need to change or modify customer facing policies or social media policies?  For example, has the current “Response” policy and procedure been effective?  Is the policy about employees discussing the company on Facebook and twitter clear and being followed?

__  Target market – Have you identified the target market?  Is it (audience) the same as it was in 2011?  Does it have the same segmentation?

__  Campaigns – Are there developed campaigns (strategies) to support all the marketing activities?

__  Marketing mix – Is the 2011 allocation of Marketing spend applicable to 2012?  For example, should more resources be devoted to social media, or to trade shows?

__  Tactical product pans – Will the 2011 tactical plan be effective in 2012?  Specifically is the “volume” product still competitive and profitable, is the “loss-leader” able to generate sales, and are there contingency plans in place in the event of competitive inroads?

__  Sales relations – Is there agreement on what constitutes a qualified lead?  Is Sales looking for additional support in the form of Product Managers?  Are Sales’ lost sales reports meaningful in helping to define the Marketing mix?

__  Social media – Which 2011 metrics have been the most useful to Management?   How can these be improved or expanded in 2012, and at what cost?  Additionally:

• Is this the year to redo your website?
• When is the last time you updated your SEO activity/measure?
• Do you have a content calendar with confirmed inputs for Q1, the year?
• Can you improve your utilization of content?
• Are you up-to-date on the latest Facebook, LinkedIn, and twitter changes?

This checklist is meant to be a memory jogger, as each company and situation is different.  The point is that in approaching the 2012 budgeting process without a checklist, key things can be overlooked or forgotten.  The importance of a checklist has been proven by pilots and doctors, and should be used by all good Marketers.  (See: The Checklist Manifesto: How to Get Things Right by Atul Gawande)

Have you constructed your checklist for 2012 yet?  How many items are checked off?  What other items would you add to this checklist?

PS.  If all this is confusing, you can find help in our Marketing Resource Optimizer (MRO) product.  Click here to obtain a copy of Part 1.

RHM  10/20/2011  

 I stated that customer satisfaction is the responsibility of EVERYONE!

Everyone “touches “  the customer and how everyone performs their job relates to the customer being satisfied.  I also listed several steps for starting a customer satisfaction program within any company. Lastly, Marketing should always look at their activities from the customer’s “glasses.”

Several people asked about research on customer satisfaction and activities that a company can perform and linking it to either starting a customer satisfaction program or improving their current customer satisfaction program.   Well the answer is a definite YES!

There are a number of approaches, companies and experts on this subject, but they basically boil down to a relatively small number of activities that help improve customer satisfaction.

Fundamentally, customers (both B2B and B2C) are looking for value (see my posting on good value propositions) and value is benefit minus cost.    Given this basic premise, one can link activities that focus on benefits and cost, and if one improves on these activities it will result in an improvement in customer satisfaction and in most cases have a positive impact on the company’s revenue stream.

Two examples of this relationship are:  One, developing a quality product that addresses a customer’s critical issues, resulting in a perceived benefit and subsequent purchases of that product or service. (e.g. disposable diapers)  Secondly, by developing a great relationship with the customer base or creating a wonderful image of your company that will be viewed as a benefit to the customer and again resulting in a purchase of the product or service. (e.g., Apple, Disney)

Bradley T. Gale’s book titled “Managing Customer Value” talks about developing a matrix of attributes related to customer satisfaction consisting of “levers” that when improved will result in an increase to the benefit attribute or when levers addressing costs are improved will also increase the overall value and thus the potential for increased revenues.   The key point is incremental or small improvements in some or all of these attributes have a multiplying impact on the revenue improvement factor.    So just a 1-5% improvement in several areas can result in increased revenues.  

So, as I stated before, everyone can impact customer satisfaction and there are metrics that can be put in place that do not require a major undertaking to measure overall customer satisfaction AND increased revenues. 

Have you stated your customer satisfaction program; if not why not?

RHL 8/16/11

The stumble in the economy could not come at a worse time.  Most companies are going into their planning for 2012, taking the first six months of 2011 as a baseline, estimating the balance of the year and using that information as the basis for 2012.  The information is not pretty and the forecasts are ugly.

This situation will produce the same old aphorisms and phrase; “Do more with less,” “Work smarter, not harder, “When the going gets tough, the tough get going” and so on.  The problem is that these trite phrases are the ones that have been repeated over and over since 2008.

There are 5 truisms that you, as the CMO, can use in planning for 2012.  If applied they will help, but not ensure that you will make the year.

1. Make sure that your product/service is differentiated.  If you have a “me-too” product you will only be able to compete on price, and no one wins a race to the bottom.  Lead with a differentiated product that offers more.
2. Provide quality.  Buyers, whether consumers or business, are looking to spend as little as possible over the long term.  They get this from quality products and service.  Poor quality reflects on their decision-making, and in the base of a business buyer, may be a career-limiting move.  Prove to the buyer that your product/service is superior in quality.
3. Service the buyer.  The day of “kiss and sell” is over.  Treat each customer as though they are unique, because they are.  The implementation of CRM tools makes it easy to personalize each buyer, both before and after the sale.
4. Match expenses to revenue.  For the next 18-24 months, the economy is going to be flat to down.  Unless you have a unique product in a growing segment, e.g., iPhone, plan on minimal growth and plan you expenses accordingly.  For example, if you are competing in an oligopolistic segment growing 2-3% a year, pouring money into building your brand may not be the best use of scarce resource.
5. Invest in Marketing.  This is not the time to cut back on Marketing.  Both Product Marketing and Product Management need to be fully funded.  The objective of most firms should be to maintain their market share, and if possible, grow it at the expense of competition.  This can only be done by fully funding marketing.  Moreover, everything is cyclical and this downturn will eventually correct itself.  When it does, those companies that have invested in Marketing will be the ones in the best position to take advantage of the upward curve.

For a related discussion on this topic, see the recent McKinsey article, We’re all marketers now…https://www.mckinseyquarterly.com/Marketing/Strategy/Were_all_marketers_now_2834

The next 18 months or so are going to be ugly.  There is no leadership emerging, either from Washington or from Wall Street.  The economy, worldwide, is drifting downward.  Companies that focus on their mission, and follow the 5 steps above will succeed.  Those that engage in attempts to win share and/or drive revenue by providing cheaper products, and choose to compete on a price basis, will lose.

Where are you in your 2012 planning?

RHM  8/4/2011

The past month and a half has been a mishmash of overseas travel, medical emergencies, and reading, first two taking me off the grid because I didn’t have good Internet access. There has not been a lot of “down-time” but there has been time to think and reflect.  Here are some my more random thoughts.

Most people are nice.  One of the messages in Stuart Diamond’s book “Getting More” is that in negotiating with people, by being nice and establishing a relationship you will get more.  While there was not a lot of negotiation, most of the people I encountered, either in hospitals in Boston and Philadelphia or while in England were nice and worked very hard to please. 

Stuxnet.  A lot of  press has been about UK newspapers gaining information by hacking into phone messages.  A recent article in Wired talks about Stuxnet, which in my opinion is one of the most significant security risks yet uncovered, and far more significant than phone hacking.  The article can be found here: http://m.wired.com/threatlevel/2011/07/how-digital-detectives-deciphered-stuxnet/  

Imagine for a moment the discussions that led up to this “product.”  We still do not know who sat around a table and said, “How can we slow down or destroy Iran’s ability to construct nuclear bombs without an overt act of war and do it so they won’t notice what is happening?”  Who ever it was came up with an answer that said, “Well if we exploit zero-day exploits to take over the computers controlling the centrifuge controllers made by Siemens we can do this, and we can gain control of the computers by using virus infected thumb drives that will propagate the viruses through a Windows platform” And then they went out and did it… and did it eloquently.  That this was done is straight out of James Bond or the Matrix, take your choice.

Fairness   That the economy is “bouncing along the bottom” is stating the obvious.  What is bizarre is that our elected officials are choosing to play chicken[1] with the economy, rather than pushing for job creation.  Yes we need to cut spending.  Yes there are tax loopholes.  However, a solution that impacts over 300 million people should not be crises driven. 

Somehow, it does not seem “fair” that a process is hijacked by a minority of the elected officials who refuse to engage in the democratic process of compromise.  Nor does it seem “fair” that proposed solutions are kicked down the road and said solutions are based on assumptions (winding down the wars) rather than concrete proposals.  Or that elected representatives cannot do their jobs, when 99.9% of those working are asked to do their jobs…without the benefit of the level of health and pension support that a Congressman or Senator gets.

But perhaps I have been spending too much time musing and not enough time working.

Your thoughts?  RHM 7/29/2011   

During a recent conversation with a passionate and knowing Marketer, he observed:

“I can be talking with senior management about frequency, reach, market share or branding, but if someone brings up the word ‘sales’ the conversation immediately changes, and I have lost control.” 

In a short statement he captured Marketing’s position today.  Marketing is an adjunct, a companion that is needed, but is really seen as overhead.  Sales is revered because they are perceived to operate in a black or white world.  Either the sale is made, or it is not.  When the sale is made, the sales person is rewarded.  When the sale is lost there are a million reasons; the price was too high, the competition was installed, it wasn’t a qualified lead, competition had the features the customer wanted, etc. etc.

Because senior management is under pressure, especially as we face the second half of what appears to be a down year, they want immediate up-to-date tactical reports on sales.  While they appreciate the Marketing efforts, they perceive that sales, not marketing will make the year.

While some prognosticators would have us believe that all sales will occur over the Internet, this will not be in our lifetimes.  The role of sales in the immediate future will remain roughly the same.  The role of Marketing has to return to where it once was.

In successful companies, the role of Marketing is viewed on an equal basis with sales.  Reviewing Marketing’s responsibilities:

Product Management – is responsible for providing sales with the right product, at the right time, and at the right price.  And, if the company is using multiple distribution channels, the right products, at the right price points.

Product Marketing – is responsible for developing and delivering all the activities that surround the product, focusing on the 12-month financial year.  This includes all activities relating to branding, promotion, lead generation and nurturing, sales training and pre-sales support.

The recent fascination with Social Media has taken attention away from the fundamental nature, scope and responsibilities of Marketing.  The new social media tools are necessary to reach a customer base that is more empowered and knowledgeable.  They are, however, tools to use in customer communication.  None that I have seen takes the place of a Product Manager thinking through how to best price and position his/her product(s) or Product Marketing laying out a 12-month campaign, with specific goals and objectives.  (And, I agree that information gained through the social media tools can aid the PM and the PMM).

As the success of well balanced Marketing becomes more obvious, the perception of Marketing will re-emerge from being viewed as overhead, and my friend will be no longer have to worry about someone saying ‘sales’ while he is trying to push his agenda. 

As we move through the balance of 2011, it will not be difficult to compare the successful companies with coordinated Marketing departments, to the struggling ones who operate with Marketing being a sales support function.

Is your Marketing organization viewed as overhead?  Does Sales call all the shots?  Who is looking 18-24 months out, or doesn’t that matter?  In your company, does Marketing report to Sales, or do they both report to senior management?  Answer below.

RHM  6/16/2011

The hits keep on coming: Epsilon, RSA, Sony, Gmail, Nintendo, and now CitiBank have all reported data breaches; and there will be more every week.  Companies will report that they have been breached and that either intellectual property (IP) or customer’s identifiable information has been taken.

The bad guys are using the email addresses and passwords, along with other information gleamed from these attacks and social networks, to construct “spear-phishing” emails sent to individuals, with the objective of stealing more IP, taking over individual computers to empty the owner’s bank account or to launch further attacks.

The result is that email recipients are sending more and more emails to the SPAM folder.  Combine this with the knowledge that teens and young adults are shying away from using email, preferring SMS and twitter instead, (ComScore) means that email as a marketing tool is slipping in its effectiveness.

Email is a staple in many company's marketing tool kit.  It is used to announce sales, product launches and specials, as a means to distribute newsletters and integral to nurturing programs as the buyer moves through the buying cycle.  Many firms purchase lists, in the hope that an email solicitation will generate new leads or entice readers to a webinar or local event.

If email from unknown, un-trusted sources as well as email from known, trusted sources is ending up in the SPAM folder, what is the role of email going forward and is there anything that can take its place?

Recognizing that email effectiveness is declining, there are a number of steps a company can take:

1.  Immediately send an email to your installed base/lists that articulates your email policies, i.e., that you will never ask for any information, what the frequency of your emails will be, that you will always spell out URLs (and what they will look like) and that if they receive anything that looks questionable to call, email you…give a specific number and address, etc. etc.
2. Authenticate your emails using DKIM (http://en.wikipedia.org/wiki/DomainKeys_Identified_Mail) and SPF (http://www.dmaresponsibility.org/emailauthentication/howevaluate.shtml).
3. Recognize that the number of leads generated thru purchased list will decline, especially if your target market is under 30.
4. Begin exploring using alternative communication tools, including twitter and Facebook, knowing that these tools are also being hacked and that there is the probability of users and potential users being more selective in using these tools as well.
5. Cultivate and expand your community of users, via generating original content and increasing your followers.

The consequences of email addresses and passwords being stolen will result in a marked increase in email abuse.  As this occurs, the effectiveness of email as a marketing tool will decrease.  What are you doing during the second half of 2011 to augment the decline in email effectiveness?  What will be the impact on your nurturing programs if you don’t take some action?

For a guide on what to do if your email account is stolen and sending out spam, download our paper My Computer Is Sending Out Spam…What Do I Do Now?  by clicking Protecting Your Email box on this link:  http://firealarmmarketing.com/contact/sales-guide/.

ComScore’s report: (http://www.comscore.com/Press_Events/Presentations_Whitepapers/2011/2010_US_Digital_Year_in_Review) shows the dramatic decline in email usage by those under 30.

RHM  6/9/2011

Recent news reports have highlighted lower housing prices, lower consumer confidence and fewer jobs added in May than anticipated.  One housing observer commented that "we are bumping along the bottom."

So readers, it is time for a poll:

1. Do you think the economy is going to get better, stay the same, or go down for the balance of 2011?

2. Has your (or your firm’s) view of the economy influenced resource allocations and/or buying decisions?

3. Do you believe Marketing, using both old and new tools, can help generate revenue regardless of the state of the economy?

You can post your answers below in the comment section, or email them to me: bob.mannal@firealarmmarketing.com.

Thanks, and I will summarize the respnses.

RHM 6/1/2011