The Mini-Strategic Plan
by Don Libey
There are times when a series of small strategic plans makes sense. Here is a Plan of Action recently created for a large business-to-business multichannel marketing company to assist in a comprehensive review of performance and opportunities.
On initial evaluation of the performance of a direct marketing company, we find benefit in zeroing in on a number of mini-strategic elements aimed at improving performance and fueling growth. These often include:
- New or expanded market niches;
- Merchandising and product expansion;
- Online channel development, integration and optimization;
- Talent expansion.
1. New or Expanded Market Niches
Most companies can benefit from a formal exploration of logical and illogical adjacent markets to existing major markets. A mini-strategic exploration generally involves solicitation of the CEO’s and senior management’s thoughts and ideas on new ‘tree-ring’ adjacent market concentrations in order to identify 3-4 potential scalable universes for 1) existing products and 2) new products.
The process is generally done by the senior management and consists of developing expansion profiles of five to ten potential adjacent markets by each manager, including universe size, product affinities, potential for assembling product lines from existing products, potential for new product lines, usage implications of the new niche (AOV, number orders per year, line items per order, consumable versus non-consumable products, projected niche growth, geographic and shipping elements, and other strategic considerations). With potentially ten to twelve total adjacent market potentials, a mini-strategic session is held to review, lobby, debate, justify, and otherwise qualify three to four potential new markets for consideration. With that collegial narrowing, the top two potentials are selected for a fully furnished projected strategic plan. From those findings, one new adjacent or expansion market is selected for expansion. At that point, detailed plans are developed for:
- Product requirements (existing and new);
- Merchandising and positioning;
- Channel integration (catalog, online, other);
- Circulation planning (prospect and existing customer break-out);
- Timelines, analytic projections and financial pro forma;
- Competitive creative design and niche protocols;
- Market test;
- Test evaluation and adjustment;
- Secondary market test and adjustment; final, comprehensive pro forma projections;
- New adjacent market roll-out.
The first portion of the process—the collegial evaluation of potentials—is generally a ninety-day undertaking. The first thirty days develops the parameters for exploration; the second thirty days is research; the third and final thirty days is development of findings and recommendations for the mini-strategic planning session.
The second portion is the actual two-day strategic planning session, restricted to the market niche development findings and reaching a collegial understanding and ownership for the go-ahead development of one expansion market.
The third portion is the progression of items 1 through 10 above and varies from three to six months. Best case, a new, adjacent market can be researched, identified, pro forma’d, developed, power-tested and entered in five to six months. Worst case, is generally one year.
2. Merchandising and Product Expansion
Companies may benefit from a fully-furnished product review that classifies all products on a product lifecycle basis, capturing the percentage of products in the introductory, growth, mature and obsolete phases. With senior management’s collegial agreement of these findings, thoughts and ideas on adjustment of positioning and merchandising tactics and approaches are solicited, by product line, by media, by channel and by financial analytics.
During a two-day mini-strategic planning session, changes in positioning are presented, lobbied, debated and consensus is reached on one to two positional changes to enhance existing market and product performance through merchandising. These changes may involve product viewpoint, service, pricing tactics, offer tactics, product mix adjustments, channel concentrations for pricing and offer advantage, sweet-spot quantity pricing, volume pricing, membership programs, or any other positioning and merchandising concepts not currently being utilized or maximized.
Generally the first portion of this initiative is internal product and sales performance research and takes up to ninety days to complete.
With the findings, management can develop its collegial thinking and ideation during a thirty day period.
The two-day mini-session narrows the potential position changes and enhancements based on the pro forma protocols.
The selection of one or two positioning enhancements and initiatives then moves to the active planning stage over the next thirty days and includes part or all of the following elements:
- Offer revisions;
- Pricing revisions;
- Service revisions;
- Application information and editorial revisions;
- Product line revisions (additions, retirements, resting, “new and improved” programs, “reintroductions,” knock-offs, adaptations, adoptions, close-outs, clearances, liquidations, variable pricing programs, large-order programs, fulfillment programs, channel programs and drivers, and other positioning tactics and initiatives not currently utilized and maximized;
- Projected inventory adjustments and de-centralization implications;
- Financial modeling and pro forma projections of enhancements;
- Testing and adjustments;
- Retesting and final pro forma and projections;
- Roll-out of repositioned products and merchandising components.
This mini-shift in strategic performance generally is a one- to two-year initiative. It can be accomplished in less time, but only is there is pristine product performance data and it is related to provable RFM or regression modeling of performance leading to reliable and predictive financial analyses that demonstrate positive outcomes.
3. Online Channel Development, Integration and Optimization
One could argue that this is the primary priority; however, to bring some companies to par with advanced multi-channel, business-to-business direct marketing companies, there is likely a significant investment to be made, often $1-2 million or more. To manage the investment, it is logical to utilize existing products and markets to enhance performance and earnings in order to attempt to partially or totally self-fund the “Elephant in the Room” which is the necessary expansion of the online integration and optimization to ward off the effects of ‘net gnats’ and predatory pricing that takes place when a company fails to place highly in search optimization or other essential online marketing elements.
Perhaps the most significant of the mini-strategic initiatives, overall, the online initiative must, however, be co-managed with the first two priorities in order to be successful. It will also demand significant considerations of talent and skill resources, either internally or outsourced.
I view this element of the mini-strategic planning as a parallel exploration. Senior management proceeds with its ideation and process development and explores the fully-furnished structure of an advanced online/catalog direct marketing structure. This would cause, by necessity, a rapid and comprehensive online, search engine optimization, keyword, paid and organic search, affiliate marketing, and alternative online technological learning curve (blogs, iPod-casting, webinars, etc.) that can only be beneficial for the management team for the future. An equally intensive and parallel exploration and development proposal should be solicited from at least two outside providers, one young, hungry, facile and state-of-the-art, and one established, if somewhat overloaded and expensive. The comparisons between the two are instructive.
With the findings of these two approaches, it is possible—with some guidance—to reach a conclusion on the appropriate tack for company to take within ninety days. From there, a robust developmental plan can be reached on a collegial basis describing the necessary catch-up phase to be deployed to bring company into the essential area of fifty percent online orders within the next two years and the currently existing frontier of not only multi-channel direct marketing, but the growing dominance of multi-positional direct marketing (our service-oriented company at premium pricing; our speed-oriented company at variable pricing; our volume-oriented company at volume pricing; our discount company at discount pricing; our catalog-oriented company; our online-oriented company; our wholesale-oriented company; our dealer-oriented company; our mom and pop mini-dealer-oriented company; and on and on).
4. Talent Expansion
The three mini-strategic enhancements proposed doubtless will require evaluation of talent and skill resources within the company and talent and skill resources to be imported to the company. Generally, the first step is to evaluate the existing talent levels in an attempt to discover where augmentation or repositioning is likely to bear fruitful benefits. The secondary phase of the mini-strategic planning for talent is to present findings and to develop the augmentation plan, generally by the collegial consensus of senior management.
Once the talent resource plan is developed and accepted, the usual and customary recruitment and placement process can be accomplished, either internally or using an outside placement resource with experience in the multi-channel direct marketing industry.
This process is often as long as thirty days for the evaluative portion; thirty days for the plan development by senior management; and ninety to one hundred twenty days for creation of position descriptions, recruitment of qualified candidates, interview, vetting, and the offer and acceptance phase. From that point, starting dates are most often within thirty to sixty days. Therefore, the entire initiative is about six to eight months. For highly-specialized positions, such as ecommerce merchandisers with proven search engine optimization success, the length of time can be prolonged, especially when the employing city is not a top-tier geographic relocation area.
These four mini-plans within the strategic planning process can be selectively employed by a company based on the strengths and weaknesses that it perceives in its overall positioning and strategic health. Often doing just one of these ‘mini’s’ a year can assist in keeping a good company fine-tuned through repetitive and frequent self-evaluation.
Copyright © 2006 by Donald R. Libey. All rights reserved. May not be reproduced by any means without permission of the author. Contact Libey Incorporated; www.libey.com or call 877-903-9448.
