Many firms pay little or no attention to the macro environment believing that there is no point because the firm can’t do anything about them. But the truth is, they are probably one of the most important elements of your business environment that you should pay attention to. This blog discusses why.
Any marketing plan should begin with Environmental Analysis; that is to examine macro, micro and internal elements that may have an impact on the firm. Micro factors ( aka competitors, customers and suppliers) all seem pretty logical things to pay attention to – they care close to the firm and we can interact with them. The same goes for our internal environment (skills, competencies, money etc). But why bother about macro factors?
Macro factors are things at large and often quite far removed from our business. They might be for example:
Political – new government or international relations; and dare I say the Brexit word.
Legal – employment, health and safety, marketing and any other legislation
Economic – taxation, employment, interest rates and so on
Social – demographic changes, Corporate Responsibility
Technological – yes, the internet, but also processes and transport.
Most businesses will ignore macro factors on the basis that they are quite far removed and have little or no influence over them. But here’s the thing. There WILL be macro changes and these changes will present opportunities or threats to your firm. Once certainty is that changes are going to happen – and there is nothing that you can do to stop them. So you have to choose. Are you going to ignore them? Or are you going to have a response or course of action ready to maximise opportunities and mitigate threats?
Here’s a very personal example. When VAT increased from 17.5% to 20% in 2011, I knew it was coming. But I did nothing about it – and when the VAT increased I passed the cost onto my clients, not all of whom were VAT registered. What happened? Well, I lost one of my clients because she could no longer afford me. That slight increase tipped me over her price bracket.
There was nothing I could do about the VAT charge, it was a given. But I did have choices. These were:
1. Ignore it
2. Reduce my day rate so that her outlay wasn’t affected
3. Work fewer hours on her account to maintain an affordable spend
4. Move her onto an alternative service
I chose the first option. And there was my second mistake. My first was not taking this Economical factor into account seriously enough in the first place.
A marketing plan that doesn’t begin with external and analysis isn’t a true and realistic plan. How can your firm possibly set realistic objectives if you don’t know your starting position and where the challenges and opportunities for the coming months and years lie?
For help assessing your business environment including macro factors, customers, competitors and the environment inside of your own practice, call me on 07989 202009 and we’ll talk about my Marketing Planning workshop.
