Every marketing plan should include an analysis of the industry. Why? Because it’s critically important to understand the industry you operate in and identify and track your performance against the Key Business Success Factors (KSFs) for your organization.
Understanding your industry and identifying your KSFs will help build a successful marketing plan; one that is based on progress and measurable results. A key success factor is an element of a whole that affects your company’s ability to perform well in your market.
Most companies focus on three to five of the most important success factors (for their business). From time to time, or year to year, these key success factors may change, as the industry or market changes.
15 Examples of Key Business Success Factors (and this is not a complete list) are:
- Number of new clients per year;
- Number of customers lost per year OR number of customers retained (it is important to understand and measure the lifetime value of the potential customer for each customer on a regular basis);
- Hire and retain excellent employees (measured by employee turnover, job vacancies, customer satisfaction);
- Successful new product introductions (measured by sales and costs);
- Successful promotional programs (measured by sales and costs);
- Good/healthy financial metrics: For example, working capital, acceptable ratios (particularly debt-to-equity ratios), profit margins, cash flow, accounts receivable, and more;
- If in the manufacturing industry, high utilization of operating capacity;
- Strong provider network;
- Strong network or distribution channel;
- Successful product positioning;
- Low cost structure;
- Niche Product/Service – Track the number of competitors entering and/or leaving the niche. Is the cost of entry to the market high or low?
- Market leader, follower or challenger, and what is their relative position in the market and why? Are you able to hold that position if you are under ‘attack’?
- Product differentiation: Does it have technological or service advantages that others cannot easily copy? 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 point of contact to the moment of shipment and subsequent invoicing?
Once you’ve identified your specific KSFs, build strategies around those factors and integrate those strategies into your business and marketing plans to ensure business success. Develop measurement programs to help you 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 from yours (depending on their strengths and weaknesses and their business and marketing strategies, they can be very different). One way to compare and evaluate is to do a competitive strength analysis; Find out what the strengths and weaknesses of your competitors are and build your competitive strategy accordingly. (A sample SWOT analysis can show you how to analyze the strengths, weaknesses, opportunities, and threats facing your business.)
For example, if retaining your existing customers is a key success factor, your business goal should be to increase sales with your existing customers. How do you do that? First, do a customer satisfaction survey to gauge how satisfied your current customers are (or aren’t). Then determine what needs to be changed and what you need to focus on. Make sure you understand how your customers choose among competitors: is it 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-in measuring devices to track them; evaluated and compared the KSFs of its competitors and those of the industry; built your strategies and goals into your business and marketing plans (ugh!); you have to act! Build your business on these key success factors.