How Competitive Analysis Improves Your Strategic Plans

I recently facilitated a strategic planning retreat for a company that resulted in a compelling new focus for their future. As part of my normal pre-retreat organization I prepared a competitive analysis survey form which the company sent out to its major customers.

 

The survey contained two questions. First,  “What percentage of your buying decision is influenced by the following competitive factors:  Product line, customer service, relationships, price and quality of product.  The survey results reflected the following responses:

  • Customer Service: 30%
  • Relationships: 28%
  • Price: 19%
  • Product Line: 18%
  • Quality of product: 5%

 

The second question asked was “How would you rate the company’s performance and the company’s competitors on a scale of 1-10 with 10 being extremely competitive, on the delivery of each of the above competitive factors.”  The results of this survey showed the company lagged behind its major competitors in the areas of Customer Service and Relationships.  And as you can see from the chart above, this company’s clients rated Customer Service and Relationships as the top two most important factors in determining which company they selected for their business.

 

The results of this competitive analysis survey were unexpected and informing.  The discussion at the strategic planning retreat about how to improve the company’s performance in both of these areas centered on their customer service group.  It was determined that the sales team (10 sales people) spent on average 10-15 hours per week, per person, following up on customer service issues.  I led them through the discussion by asking them to define “world class customer service” and to design a customer service group that would be able to provide this service.   This resulted in a redesigned customer service group that could free-up as much as 10-15 hours per week for each sales person.  The sales team will utilize that newly freed time to strengthen their customer relationships resulting in the company growing their revenues.  By redesigning their customer service group the company added 100-150 sales hours per week without adding more sales people.  They did add 2 clerical positions with a cost estimated to be only 25% of what it would have cost them to add enough new sales people to gain 100-150 sales hours per week.

 

The company’s plan also included going back to their customers to receive input on how the customer would define “world class customer service”.  This will provide the company with valuable insights on what the customers expect as well as sending their customers a valuable message about how important it is for the company to deliver world class customer service.

 

Without completing a competitive analysis survey prior to their strategic planning retreat the company would not have recognized how much the customer’s buying decision was influenced by the quality of customer service.

 

Barry MacKechnie, author of Achieving Strategic Alignment,”works with CEOs on changing the way that their organization works in order to achieve their strategic goals. Barry is the founder and president of CEO-Services and has over 40 years of CEO level experience as a business owner and advisor to executives in more than 400 companies with revenues in excess of $250M.

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