By now we are about half way to having completed our Customer Review. The first stage in developing a marketing strategy. Strategy starts with thinking, and then moves into delivery. I call this thinking stage ‘Customer Review’. I have covered the first 4 of the 7 steps. In this 5th section we have to get down and dirty with our own current offer – I worked on a brand that called this session the ‘torture test’, a bit scary sounding, but you get the idea. Sacred cows are about to be identified and any flights of fancy and JFDs you have had will be clearly exposed.
- Customer insight ✓
- The marketplace ✓
- Critique the current strategy ✓
- Identify and critique your enemies ✓
- Critique your current/planned offer in detail: Product / Service / Channel
- Pricing Review
(5) Critique your offer in detail: Product / Service / Channels
- To evaluate your current/proposed offer to customers
- To evaluate how well you are performing now
- To understand how well your target customers view your offer (and how much value they place on its component parts)
- To understand the profitability of your offer in it’s entirety and hopefully in granular detail.
- There are a number of steps to this:
- Product offer assessment
- Channel assessment
- Communications assessment
- Profit assessment
- Start with the portfolio analysis you have already completed – and ask yourself … is it working? Is it meeting the needs of customers. Do you have an abundance of growing products in the growth areas of the matrix? Identify your gaps as a minimum.
- Use research and listen to customers when identifying your gaps. The gap is not where you think you should go … it is where customers tell you, you should be … if that is doable for your brand and business of course.
- Evaluate critically your track record;
- Volume of innovation and speed/technology to deliver
- Ability to grow products/mkt share
- Ability to increase advocacy and satisfaction
- Have your new products/services launched in the last 2 years delivered to your forecast?
- Alternatively are you happy being a follower?
Then land on your proposed offer and complete the exercise below for current and planned offers:
- Evaluate each offer using a value matrix based on the views of your customer vs your actual costs.
- Assess where your offer will appear in price competitiveness rankings (if that is important – in my experience it always is!)
- Assess the product/offer – using the “Good Better Best” tool below. Choose as many categories as you like down the left hand axis and score and then rank your assessments – oh, and don’t be defensive about low scores, this is a critique you know !
The next step then is to assess channel efficiency.
Start with another Boston matrix and use your insight about channel growth from earlier.
- Is your chosen channel a growing channel? Or declining?
- Are you exploiting new channels e.g. social media that are opening up? Should you be?
- Are you in the place where customers tell you that you need to be?
- Brainstorm what you need to be a success in each channel – based, as always with me, on what your customers tell you. So, if speed of response is a given in social media, is a guaranteed counter service the equivalent for a branch? And what if you are a High Net Worth or Premium customer in the same channel? Or what if your core target market works shifts? Are you even open?
- The difficult step here, is to really assess your customer service – review complaints, customer satisfaction scores, research etc & don’t be fooled by awards – they may mask an issue (not always). Ask your colleagues what stops them being better at what they do. My current business refers to this as mending broken windows.
- I also like Net promoter score assessment – but I accept it is not for everyone/every business
Next we come to communications effectiveness
This is a big review – a real drains up on how well your communications are working.
All of them , inbound outbound, mailed, emailed etc etc.
Decide what criteria you will use to assess effectiveness – it should be as simple as summarising your KPIs – but it never is.
I’m a direct marketer so I like everything to have a clear cost of acquisition/retention visible, but that is not appropriate in some cases. Here are some suggestions to complete this task:
- What works with your offer in the marketplace – are you bucking a trend?
- Are you getting complaints over contact rules/over contacting etc
- Are your comms consistent and integrated (a really important point to improve awareness of your brand)
- Are your calls to action clear and channel appropriate
- Are you ‘on brand’ and ‘on strategy’
- Are you over indexing in a particular media vs the market
- Is your correspondence as good as your comms marketing? (alright I’m a Comms marketer – so I left that to last)
- Ask your media planners and creative agencies to critically assess the work as well – then ask them to switch roles: creative assesses media plan successes and vice versa – remember what I said … torture testing, this is supposed to be challenging.
CEOs have a bad habit of asking we lowly Comms marketers to come and see them every now and again and twice I have been confronted by a boardroom table with our comms, and those of the CEOs favorite brand, all over it … this meeting never ends up with a ‘congratulations’ but it is always effective. Try it with your team. I dare you!
Finally in this long stage of our development work – address profitability, and for this you need the help of your Finance teams.
Im not going to labour this point – your business will know what its key KPIs are but as a minimum you need to forecast out sales and profit trends by product, sector, channel, segment of customers, media etc. You will then need to model internal attrition, external attrition, contribution from new offers, new channels, cost overheads etc
Use all the tools your finance team have at their disposal to feed into this section… its very very important to ensure your product, proposition and offer builds are profitable.
- A clear line of sight of the most likely ways / places that you can optimise for profit
- A robust assessment of whether what you are planning is appropriate and likely to succeed vs competing offers from your enemies
- A(nother) customer insight led view of what you are proposing and what you will need to be successful
- A view on the competencies you will need to develop for each channel/offer/proposition
Well, apologies, that was a long blog – I’m enjoying writing these posts, I hope you find them interesting or at least an interesting insight into how I like to market !
A short one next week – Pricing review
19 April 2013