Data – The first Strategic Planning element
Reading time: 4 – 7 minutes
The best place to start strategic planning is with DATA….data that is as accurate as possible. Data is factual. Data forces intellectual honesty. And, good data sets the groundwork in determining your starting point as you map out your strategic journey for the next year. You may know where you want to go….”Achieve 20% growth in our SuperDuper Surgical Instrument”. But you won’t know how to get there if your don’t know where you are starting from. So, it is time for some detective work about your business.
Dr. Joseph Bell, the inspiration for the famous detective character Sherlock Holmes, was a major influence in advances in diagnosis and forensic science. He taught his medical students that an accurate diagnosis rested on three things:
- Observe carefully
- Deduce shrewdly
- Confirm with evidence
Crown Investigators typically drew up a theory around a crime and then tried to force the facts the fit the theory. Dr. Bell began to influence these investigators to get the facts first. Then after reviewing all the facts, determine the hypothesis regarding the crime.
Let’s begin to observe carefully, deduce shrewdly and confirm the data we acquire. Actually, gathering data is fun. It is also easy to delegate. The information that will start to pop-up may be surprising and will be a good foundation for the next steps of the planning process. It will definitely create some interesting discussion amongst your team.
Here is a list of the data you should be assembling:
- Feature/Benefit matrix comparison with competitive products. This is an easy place to fall into the trap of self-congratulation. Be very honest . If the competition has a feature that customers like, admit it.
- Rate the features/benefits in level of importance
- Pricing matrix of competitive products
- Market share analysis by product.
- Sales channel comparison matrix with competitors
- Market growth rate by product according to their product category
- Revenue information by product for last 4 years
- Your growth rate by product
- Gross margin by product
- Annual sales cycle
- Sales by special event – trade shows, etc.
- Sales by your channels – website sales, direct sales, dealer sales, etc.
- A copy of one of your advertisements for each of your principle products with copies of competitive ads (use whatever the principle advertisement is – magazine ad, direct mail, e-blast, etc.)
- A copy of your website home page with a copy of your competition’s home pages
- A copy of the product brochure for each of your principle products with a copy of the appropriate competitive brochure
- Customer data
- Number of active customers (you may have to come up with a definition of “active” like minimum purchases of $Y per year)
- Number of marginal customers
- Number of customers that have not purchased from you in over a year (or some other meaningful timeframe related to the nature of your product)
- Customer segments – by doctor type (generalist vs. specialist), by size (practice, clinic, hospital, etc.)
- Why do they buy from you? Ask them. Don’t assume anything. Ask the last 5 buyers for each key product why they bought your product.
- Why do they buy from someone else? Ask the last 2 or 3 lost prospects why they chose the competition.
- Reimbursement trends related to your products
- Brand image
- Where does the market place you among other similar products and why?
- What is the market opinion of your products? Use scales like 1 to 5.
As you are gathering this data you will most likely come across areas where you don’t have the information needed. This is what I call a “data gap”. For example, you may not have market share information related to a critical product. You will need to try hard to fill this gap. Is there an industry research study that has this information? If so, can you afford to purchase this study? If not, is there someone you can borrow it from? If you can’t get data then you will have to make an honest guess. Try to get some outside sources to help you with this guess. An outside source could be executives at non-competing companies, your very own dealers and sales representatives. Or, market gurus and major customers. Many medical device markets have analysts associated with them. You could pay one of these analysts to do some research. You may also want to do simple surveys with your customers utilizing inexpensive tools like Survey Monkey™ (www.surveymonkey.com) or Constant Contact™ (www.constantcontact.com). When evaluating where your product stands among others, a focus group can be valuable. A marketing agency familiar with your market can help here. Sometimes media publishers in your market can assist with surveys and focus groups. Try hard to “confirm with evidence”.
While all this information is coming in, we can start working on the Assumptions in parallel. That will be the subject of the next Strategic Planning post.
To Do:
- Schedule a meeting to discuss gathering data.
- Break up the data you are seeking into sections and delegate.
- Ask people to commit to a data due date.
- Schedule a follow-up meeting to review progress and to identify data gaps.
- Create a file folder for each data category and put it in a central file drawer so people can put data in the folders as they gather it. You may be able to put this on a shared file on your server.
Remember, as Sgt. Joe Friday used to say in Dragnet, “All we want are the facts ma’am.”
