News today that Samsung has taken a huge drop in profits in the last quarter has come as a surprise to many analysts and is clear evidence of how quickly markets can change depending on economic factors and, in this case, the launch of a new product by a competitor.
But Samsung’s share price didn’t fall but rose as Samsung explained to investors that despite a huge drop in their earnings from the smart phone business part of their business, they are much encouraged by the growth in their chip business.
Their strategy is to get their “smart” chip into as many domestic and business appliances as possible, whether that be a “smart” TV, a “smart” refrigerator or even “smart” heating devices controlled all from your smart phone. The uses of the “smart” chip are only constrained by the imagination and investors can see that Samsung really has stolen a march on its competitors.
So is your business ready for such rapid changes? What is your Marketing team doing to provide you with information so you don’t have to rely on a Crystal Ball?
In many of the strategic planning workshops I have lead, it becomes evident that those that have adopted a strategy that adapts and learns have a far greater success rate than those who have failed to take the time to collate market data and analyse it in real-time.
It is my belief that many Sales & Marketing team spend so much time blindly marketing their products to increase sales in the short term that they fail to allocate time to collecting useful data which can underpin good strategic planning.
So what data should our friends in marketing be collecting and should be able to provide in real-time and when discussions on the company’s direction take place. These two suggestions provide a good starter.
1) Real-Time Sales by Customer, by Product Volumes and Margin
Having this detail of information can ensure that you can provide management information at a strategic and operational level.
For the Strategic Planning team they can see the trends in the sales performance and can determine whether their new product strategies are working or if they need to change their priorities. By analysing in greater detail the “S” curve they can make far better qualified strategic plans than if they did not have the information.
By mapping shifts in the product data, you get a far more interesting Star, Cash-Cow, Dogs and Question mark chart and is a sound basis for a robust strategic planning debate on which products need to be developed, those that need to be binned and those that require little marketing as they sell themselves. These charts are known as “Growth/Share” charts.
This gives you the data that will allow you decide on the product mix, reducing your emphasis on products that were formerly stars and to inject investment onto those products that are showing promise and new products.
Mapping the data by margins and aggregating by customer can help you distinguish between those customers that benefit your business and those that don’t. It could also help you make a decisions on which customers are squeezing your margins too much (and perhaps it’s time you let your competitor suffer being that particular customer’s supplier) and which customers you should invest more time to.
On an operations basis the data can very soon highlight where you might have a problem with a customer, a product, the service or indeed the capability of your sales executive or account manager. Providing this data to the sales executive or account manager gives them the ability to develop a far better discourse with their customers. Why was it that sales of a particular product fell off in the last month? Explaining to customers that each business in the relationship could benefit from greater planning so that you the supplier can provide a better service.
The example of this type of relationship enquiry that leads to better customer relationships is endless but it gives you the supplier a reason to discuss business with your customer. And every time you meet your customer you have a chance to sell.
2) Competitor Information
So often businesses I provide Strategic Planning Workshops to are so self-absorbed they forget that there is a battle to be won by beating their competitors. Just like managing a football team it’s important that you devise tactics that take the sales away from your competitors or decide that you do not want to compete in the same space.
Predicting Market Size and the Market Share you want is always a challenging aspect of Marketing, and because it is challenging it’s often ignored. I always say to my clients that they are better making a stab at the information than ignoring it. Over a relatively short period of time teams that try and make a stab at this get better and better at predicting the information.
So what data should my marketing team gather? :
Identify your competitor by product, service and estimate market share.
Identify the differences in product, service and price.
If they have a larger market share or a rapidly growing market share identify why.
Identify products or services which whilst not in direct competition have a significant impact on a product sale.
What are the differences in the Value Chain.
Identify what the overall customer perception of the Competitor’s image is.
Once armed with this material you really can start to make a significant difference to your business.
Andrew Jones, Principal Consultant to Antiva. Why not take advantage of Antiva's 30% discount during this summer.