Refine Your Strategic Plan with SWOT

With the year underway, your business probably has a strategic plan in place for the months ahead. Or maybe you’ve created a general outline but haven’t quite put the finishing touches on it yet. In either case, there’s a time-tested approach to refining your strategic plan that you should consider: a SWOT analysis. Let’s take a closer look at what each of the letters in that abbreviation stands for:

Strengths. A SWOT analysis starts by identifying your company’s core competencies and competitive advantages. These are how you can boost revenues and build value. Examples may include an easily identifiable brand, a loyal customer base or exceptional customer service.

Unearth the source of each strength. A loyal customer base, for instance, may be tied to a star employee or executive — say a CEO with a high regional profile and multitude of community contacts. In such a case, it’s important to consider what you’d do if that person suddenly left the business.

Weaknesses. Next the analysis looks at the opposite of strengths: potential risks to profitability and long-term viability. These might include high employee turnover, weak internal controls, unreliable quality, or a location that’s no longer advantageous.

You can evaluate weaknesses relative to your competitors as well. Let’s say metrics indicate customer recognition of your brand is increasing, but you’re still up against a name-brand competitor. Is that a battle you can win? Every business has its Achilles’ heel — some have several. Identify yours so you can correct them.

Opportunities. From here, a SWOT analysis looks externally at what’s happening in your industry, local economy or regulatory environment. Opportunities are favorable external conditions that could allow you to build your bottom line if your company acts on them before competitors do.

For example, imagine a transportation service that notices a growing demand for food deliveries in its operational area. The company could allocate vehicles and hire drivers to deliver food, thereby gaining an entirely new revenue stream.

Threats. The last step in the analysis is spotting unfavorable conditions that might prevent your business from achieving its goals. Threats might come from a decline in the economy, adverse technological changes, increased competition or tougher regulation.

Going back to our previous example, that transportation service would have to consider whether its technological infrastructure could support the rigorous demands of the app-based food-delivery industry. It would also need to assess the risk of regulatory challenges of engaging independent contractors to serve as drivers.

SWOT matrix
A SWOT matrix

Typically presented as a matrix, a SWOT analysis provides a logical framework for better understanding how your business runs and for improving (or formulating) a strategic plan for the year ahead. Our firm can help you gather and assess the financial data associated with the analysis.

Is Your Business Stuck in the Mud with Its Marketing Plan?

A good marketing plan should be like a network of well-paved, clearly marked roads shooting out into the world and leading back to your company. But all too easily, a business can get stuck in the mud while trying to build these thoroughfares, leaving its marketing message ineffective and, well, muddled. Here are a few indications that you might be spinning your wheels.

Still the same

If you’ve been using the same marketing materials for years, it’s probably time for an update. Customers’ demographics, perspectives and expectations change over time. If your materials appear old and outdated, your products or services may seem that way too.

Check out the marketing and advertising of competitors, as well as perhaps a few companies that you admire. What about their efforts grabs you? Discuss it with your team and come up with a strategy for refreshing your look. You might need to do something as drastic as a total rebranding, or a few relatively minor tweaks might be sufficient.

Too much reliance on one approach

While a marketing plan should take many avenues, sometimes when a business finds success via a certain route, it gets overly reliant on that one approach. Think of a company that has advertised in its local phone book for years and doesn’t notice when a competitor starts pulling in customers via social media.

This is where data becomes key. Use metrics to track response rates to your various initiatives and regularly reassess the balance of your marketing approach. Unlike the business in our example, many companies today become too focused on social media and ignore other options. So, watch out for that.

Ask yourself whether your various marketing efforts complement — or conflict with — one another. For example, is it obvious that an online ad and a print brochure came from the same business? Are you communicating a consistent, easy-to-remember message to customers and prospects throughout your messaging?

In addition, be careful about tone and taking unnecessary risks — particularly when using social media. It’s a difficult challenge: You want to get noticed, and sometimes that means pushing the envelope, but you don’t want to end up being offensive. Generally, you shouldn’t run the risk of alienating customers with controversial material. If you do come up with an edgy idea that you believe will likely pay off, gather plenty of feedback from objective parties before launching.

Reconstruction work

A marketing plan going nowhere will likely leave your sales team lost and your bottom line suffering. Maybe it’s time to do some reconstruction work on yours. Contact us for more information and further suggestions.

Do Your Long-Term Customers Know Everything About You?

A technician at a mobility equipment supplier was servicing the motorized wheelchair of a long-time customer and noticed it was a brand-new model. “Where did you buy the chair?” he asked the customer. “At the health care supply store on the other side of town,” the customer replied. The technician paused and then asked, “Well, why didn’t you buy the chair from us?” The customer replied, “I didn’t know you sold wheelchairs.”

Look deeper

Most business owners would likely agree that selling to existing customers is much easier than finding new ones. Yet many companies continue to squander potential sales to long-term, satisfied customers simply because they don’t create awareness of all their products and services.

It seems puzzling that the long-time customer in our example wouldn’t know that his wheelchair service provider also sold wheelchairs. But when you look a little deeper, it’s easy to understand why.

The repair customer always visited the repair shop, which had a separate entrance. While the customer’s chair was being repaired, he sat in the waiting area, which provided a variety of magazines but no product brochures or other promotional materials. The customer had no idea that a new sales facility was on the other side of the building until the technician asked about the new wheelchair.

Be inquisitive

Are you losing business from long-term customers because of a similar disconnect? To find out, ask yourself two fundamental questions:

  1. Are your customers buying everything they need from you? To find the answer, you must thoroughly understand your customers’ needs. Identify your top tier of customers — say, the 20% who provide 80% of your revenue. What do they buy from you? What else might they need? Don’t just take orders from them; learn everything you can about their missions, strategic plans and operations.
  2. Are your customers aware of everything you offer? The quickest way to learn this is, simply, to ask. Instruct your salespeople to regularly inquire about whether customers would be interested in products or services they’ve never bought. Also, add flyers, brochures or catalogs to orders when you fulfill them. Consider building greater awareness by hosting free lunches or festive corporate events to educate your customers on the existence and value of your products and services.

Raise awareness

If you have long-term customers, you must be doing something right — and that’s to your company’s credit. But, remember, it’s not out of the question that you could lose any one of those customers if they’re unaware of your full spectrum of products and services. That’s an open opportunity for a competitor.

By taking steps to raise awareness of your products and services, you’ll put yourself in a better position to increase sales and profitability. Our firm can help you identify your strongest revenue sources and provide further ideas for enhancing them.