Every marketing plan must include an industry analysis. Why? Because it’s critical to understand the industry you’re in and identify and track your performance against the key business success factors (KSFs) for your organization.
By understanding your industry and identifying your KSFs, you can create a successful marketing plan. one based on measurable progress and results. A critical success factor is an element of a whole that influences your company’s ability to succeed in your market.
Most companies focus on three to five of the most important (to their business) success factors. From time to time or from year to year, these key success factors may change as the industry or market changes.
15 examples of key factors for business success (and this is not an exhaustive list) are:
- number of new customers per year;
- Number of customers lost per year OR number of customers retained (it is important to regularly understand and measure the potential customer lifetime value for each customer);
- Hire and retain excellent employees (measured by employee turnover, vacancies, customer satisfaction);
- Successful new product launches (measured by sales and costs);
- Successful advertising programs (measured by revenue and costs);
- Good/sound financial metrics: e.g. working capital, reasonable ratios (particularly leverage), profit margins, cash flow, accounts receivable and more;
- When in the manufacturing industry, high utilization of plant capacity;
- Strong supplier network;
- Strong distribution network or channel;
- Successful product positioning;
- Low cost structure;
- Niche Product/Service – Track the number of competitors entering and/or exiting the niche. Are the costs of entering the market high or low?
- Leader or Follower or Challenger, and is your relative market position and why? Can you support this position when under Attack?
- Product Differentiation: Do you have technology or service advantages that others can’t easily duplicate? How unique and differentiated is your product or service?
- Time to market: Can your product or service be delivered quickly and easily? from the first contact to the time of dispatch and subsequent invoicing?
Once you have identified your specific KSFs, develop strategies around these factors and incorporate these strategies into your marketing and business plans to ensure business success. Develop metrics to track your progress against your success factors. You also need to assess your competition and see if your competitors’ key success factors are similar or different to yours (depending on your strengths and weaknesses and your marketing and business strategies, they can be very different). One way to compare and evaluate is to conduct a competitive strengths analysis; Find out what your competitors’ strengths and weaknesses are and build your competitive strategy accordingly. (A sample swot analysis can show you how to analyze your organization’s strengths, weaknesses, opportunities, and threats.)
For example, if retaining your existing customers is a key success factor, your business goal must be to increase sales from your existing customers. How you do that? First, conduct a customer satisfaction survey to determine how satisfied your existing customers are (or aren’t). Then determine what needs to change and what to focus on. Make sure you understand how your customers chose between competitors: price, service, quality, knowledge, reliability, relationships, or all of these factors? What product or service attributes are most important to your customers? What is the unique difference between your product or service and your competitor’s product or service (from your customer’s perspective)?
Once you have identified your key success factors; built gauges to track them; evaluated and compared your competitors’ KSFs – and those of the industry; Incorporate your strategies and goals into your marketing and business plans (phew!); You must act! Build your business on these key success factors.