What does it take for your company to have strategic agility?

6 mins read

It is fashionable to be agile. You encounter this buzzword more often than necessary. Strategic agility is really beneficial to your business, but what exactly does that mean, how do you know you’re there or how to go in that direction?

Strategic agility is the solution in this disruptive environment that directly impacts the business strategy. It measures the level of agility of an organization taking into account its strategic direction. When things are constantly changing, it’s important how quickly and easily you respond to the new challenges. Moreover, it’s critical to anticipate instigation and be prepared with a well-defined crisis plan.

Strategic agility is a good set-up machinery of submetrics that helps you prevent challenging situations, keep up with trends, and have successful results.

Let’s see what the submetrics are and how they can help you stay ahead of the market.

Business model

What is it?

How does your company plan to make money? The core strategy for making a profit is a business model. Does it answer the questions How my business works? How does it create value? What are the products or services that my business plans to sell? How can I deliver them? Your organization needs a clear business model to create, measure, and deliver value to your stakeholders.

Whether you have a small or a large business, it’s important to have a business model and to update it regularly so that you are prepared to face the challenges and anticipate trends.

Example

There are a lot of business models out there. These are some of the best known:

Direct sales: the commercial practice through which the products or services are sold directly to the final consumer, through the manufacturer’s stores and warehouses, door-to-door sales, as well as a series of distance selling techniques (mail order, telephone sale, video, teleshopping, Internet sale).
Franchise: in this business model, the franchisor (for instance McDonald’s) allows other people called franchisees to use the name, business model, and marketing strategy to make a profit. A percentage of the profit is redirected to the franchisor (McDonald).
Freemium: the product is offered for free, and some of the users are paying for the extended services (e.g. McAfee security).
Subscription: the customer pays regularly for access to a product (e.g. Netflix).
Brick-and-mortar stores: the products or services are offered face-to-face to the customer (e.g. grocery store).

What to look out for

You want to have a strong business model, so when creating your business plan be sure to include these points:

Identify the problem your business is going to solve.
Outline some possible solutions.
Identify the target audience. Who is your product or service for?
Set your business processes. What are the key business activities? Are you shipping the product to your customer? Are you providing telephone consultancy? Be sure to clarify and understand what are the activities needed for your business model.
What are the essential resources required to fulfill the daily processes? For instance, you may need a website, capital, repository, and so on.
Write a value proposition. How do your products or services differ from those of the competition? We’ll talk more about this later.
Be flexible. Leave room for future adjustments. The initial plan isn’t forever. Come back from time to time and make improvements.
Test your products or services.

How to improve it?

Evaluate the success of your business model. Compare your results with that of the competitors in your industry. You need to look at gross profit, cash flow, and net income. This way you will see what the real profit of your company is.

Be sure you have enough funds to keep the business running until it becomes profitable. Underestimating the costs of funding is a common mistake that many companies make.

Revise your business model every now and then. Make sure it reflects the ever-changing business environment, but also the demands of the market

Value Proposition

What is it?

Why should a consumer buy your product or use your service? What value does your company bring to customers if they buy your products or services? How are you different from your competitors? What is the need you meet? These are the questions your value proposition should answer. Your organization must have a clear image of how digital features, products & services contribute to the overall value proposition. It introduces the prospect to the company’s brand and persuades him to buy.

Example

Let’s take for instance the value proposition of Uber.

You can understand right from the headline what the service is about: “Tap the app, get a ride”. Simply by using an app you can move where you need to. Moreover, the rest of the message is short, very clear, and highlights the main benefits of the service: you get a ride and the payment is completely cashless.

What to look out for

The value proposition is like an identity card of your brand so be sure it is easy to be found by the prospects. Put it directly on the website or in the promotional materials.

Write a value proposition that is easy to understand, unique, specific, compelling, and turns prospects into customers. Be short, to-the-point and let everyone know how you are different from the competition.

How to improve it?

If you want to have a better value proposition be sure to:

Know what you’re good at and let everyone know what your specialty is.
Listen to your customers’ opinions, they may have some helpful insights about why they buy or not your product.
Quantify your value if the numbers are compelling.
Highlight the benefits of your product or service.
Tell your customers what benefits they get if they buy your product.
Be clear about how you are different from the competition.
Put the value proposition visible.

Market segmentation

What is it?

Market segmentation is the process of dividing a market into groups (segments) using certain criteria such as demographics, needs, priorities, common interests, and other psychographic or behavioral criteria.

Marketing segmentation helps businesses to have niche segments for higher clarity and knowledge about them. Plus it minimizes the risk of implementing marketing campaigns designed for specific segments. In the long term, it will be more efficient and easy to tailor products and services for targeted segments.

Example

Manufacturers rely on accurate market segmentation to create products that appeal to those segments. For example, banks market to a wide range of people, and defining services and products for each specific group can be decisive.

You can’t advertise retirement planning or similar savings accounts for students of baby boomers. A bank must conduct in-depth market research and can discover that most millennials are planning to have a family. The bank uses that data to market college-friendly savings and investment accounts to this consumer segment.

There are multiple situations in which we have to correctly identify segments for a product.

Either we have the products and the company has to define its market to best fit a target audience. There’s a lot of research at this stage. Otherwise, your product might not appeal to your target market.

Either we know our audience very well and we need to promote our product taking into account insights and attract high-value customers.

What to look out for

When you are creating marketing segmentation, there are a few aspects you need to consider:

Firstly, gather data and metrics about your audience to define your market. Start asking preliminary questions like: Is there a need for my products or services? Is my market large or small? How is my brand positioned compared to my competitors?
Secondly, define your segments based on collected data and segment your market. You can use a combination of criteria (demographics, interests, psychographic, behavioral, and so on) to find out which one is the best fit for your product category.
Another important aspect you need to consider is understanding your marketing. You can fully do that, by having the knowledge and insights on everything you need about your target market. Conduct research, focus groups, interviews, and everything you need to gather all that valuable information. You can find pain points, likes and discover opportunities.

How to improve it?

Start creating your customer segments based on the research and prioritize your most relevant segment. Then test your marketing strategy on your segment. Use conversion metrics to discover how effective your strategy is. Keep testing until you get the best results.

You can restart your research when you find it necessary or relook your marketing strategy.

Digital strategy

What is it?

Digital strategy is the stepping stone in your digital transformation to improve business performance. In our experience, a smart digital strategy is about making wise investment choices to maximize competitive advantage, growth, and profit. It entails the guidelines and directions your company will take in adopting and adapting to a digital environment. A digital strategy will contain key objectives for your company, as well as tactics, and metrics for success.

Example

Think about companies such as Nike, Starbucks, or Microsoft. Do they always seem three steps ahead of the game? Now think about companies like Kodak. Can you tell what the difference is between those businesses?

Let us give you a hint: the formerly mentioned companies are early adopters of digital transformation. To their benefit, they started out with a clear vision of their new path in digital and with a strong strategy for implementing changes. They saw exponential growth in the early stages of their digital transformation. Moreover, they continue to gain huge advantages compared to their competitors, in terms of resources, customer relationships, and global scale.

The latter has swiftly declined when faced with their digitally disrupting competitors. Their refusal to rethink their business model in digital terms rested solely on denying the power of their competitors.

What to look out for

Customer touchpoints. From product development to sales strategy and reaching your target audience, a digital strategy can help you rethink your customer relationship.
Define your goals. Digital tactics change at a rapid pace, but your main objective should be consistent. Your objectives should reflect your business’ values, capabilities, and vision for the future.
Operational process. Digital operation tools can help you cut costs and resources in managing your company from the inside. Online workflows allow your team more flexibility, efficiency, and accountability.

How to improve it?

Create a digital ecosystem for your company. Buying a few digital tools to help you in the regular workflow is certainly not enough to start your company’s digital transformation. Consider adopting a digital approach in product development, business model, networking, and workflow.
Research your market and competitors. Constant innovation in your digital strategy is key to staying relevant as a business in today’s ecosystem. The strategy you employed last year might not be up to date. Keep it fresh by constantly researching your market opportunities and competition.

Integrated Communication

What is it?

Bringing revenue into your company or boosting sales for your product is one of the key objectives on your mind as a business leader, is it not? If any of these questions pop up on your business strategy then you are certainly on the right track:

What is your long-term strategy for reaching potential customers?
How do you sustainably improve the conversion rate for your product or business?
Do you have a clearly structured image for your target audience?
Do you have a set of metrics for scaling your business?
Do you collect data about your customers to grow your business?

A marketing communications strategy should answer all the questions above, through both digital and OOH tactics. A marketing strategy includes your company’s value proposition, brand voice, and data on your key audience.

You should integrate the marketing communication strategy with the business strategy to create a multichannel marketing plan that uses both physical and digital communication tactics.

Example

As an emerging e-commerce company, Brand wishes to launch its e-shop as an MVP but has a strong thought out plan for scaling in the next two years. They are currently selling home depot products, but they plan to extend the range of products from three categories to 14. They also wish to employ professionals to offer high-quality services along with their products and establish delivery services.

But first, they need to acquire a stable pool of returning customers. According to their calculations, they need to grow the pool by 9% every year to ensure revenue and investment funds.

They started with an email marketing campaign that complements the excellent customer service they provide in the online shop. They measure the open rate and click-through rate to determine the effectiveness of their campaigns and the customers’ interests. Research shows that a healthy relationship between brand and customer is where they have constant interaction, no more than a few days apart. So Brand sends newsletters containing new products on their website and events. Easily engaged customers are rewarded with discounts. With lesser engaged users, the Brand sends thoughtfully placed ads to stay relevant.

The first wave of scaling comes once they have reached 10k returning users per month, while the second wave is planned once they reach the 25k threshold.

What to look out for

Understand your demographics. Understanding your users’ needs and pain points is paramount for your communication. It can help you provide them with relief and a valuable product they will be happy to return to.
Be consistent in your messaging. Consistency is known to create trust and give users a sense of guidance. It will also help your brand to be easily recognized outside of your website.
Define your unique value proposition. Users are bombarded with information every minute of every day, it is easy for new brands to become ‘noise’ in their news feed. Set yourself apart from the wave and always keep this answer clear “Why should I buy from you and not someone else?”
Be considerate with your metrics. You may wish to measure when a user has achieved a ‘sale’, what is a ‘sale’, what deters them from buying. Define who are leads, who are buyers, who are your loyal customers and how to identify them in numbers. Website Analytics is a must in this concern.
Follow-up on sales or non-sales. Acquiring data about your business performance is only a tool, not a goal. It is built to give you valuable insights for the next steps in your business-customer relationship.

How to improve it?

The first step in the improvement process is observing which channel brings the most engagement. Secondly, create an easy way to keep in contact with your customers. Whether you are partial to email or chat, forms or bots, always try to make your life easier: consider cross-channel integration tools and cross-channel measuring tactics.

Product management

What is it?

Transitioning to digital processes and technologies has changed the competitive scene in many industries. With so many tools for measuring success and predicting market shifts way ahead, companies who have undergone digital transformation are likely to grow exponentially compared to those who strive.

How well do you know modern technologies like big data collection, machine learning, IoT, CRM, chatbots, automation? If you are already applying some of those tactics in your company, then you are already on the right track.

One strong argument for the adoption of technologies is that user expectations have changed. The way products are put to market has changed and most importantly, we can verify, measure, and predict when to move on to the next phases in product management.

Strive to digitize the products in the portfolio by using digital transformation technologies. (e.g. Artificial Intelligence, Machine Learning, Big Data, IoT).

Example

Companies who outsource their resources need to have an accurate status on the progress and efficiency of their work at all times. Teams who are spread across multiple cities or even countries require online tools to keep track of their work easily.

Banks and financial services companies have long been developing and implementing advanced technologies for their work and data management. They have a long history of using digitized tools and have obtained reduced costs, increased speed and security for high transactional volumes, and also have improved client services.

What to look out for

Data collection & segmentation. Knowing your audience is paramount for promoting and selling your product. Modern-day technologies make it possible to acquire data about our users and observe their behavior in relation to the product. Inherently, we can create separate strategies for different stages of the sales funnel and address each segment accordingly. Choose a tool for data collection and storage that includes a CRM component. You can start your audience segmentation small (i.e. engaged vs unengaged users) and then scale depending on campaigns or interests.
Traffic analysis. Watching the traffic and leads on your website allows you to determine if a campaign is performing as expected. If configured correctly, it can even show bottlenecks and where you can improve the user flow.
Remarketing strategies. Ensure a follow-up for your users post-acquisition. A returning customer costs much less than acquiring an unengaged user. Remarketing strategies imply reaching out to your customers to ensure they will buy again. Email campaigns are very useful in this case since they can be personalized.
Which processes can be automated. Be honest, are you sure you want to spend an entire day of your employees’ time to fill in bills, create reports or manually test audiences of thousands of users? Automated tools can help reduce time and costs in areas of recurrent activity, in both production and organization.
Cloud storage. Remember when digital storage spaces were causing more trouble than ease of mind? Like the era of Dropdown, upload, download, and repeat. Cloud storage solutions allow you to aggregate all resources in one place and access it anytime, anywhere, by anyone (who has permissions of course).
Governance and definition of Done. Project management tools can increase the efficiency of your team and allow for flexibility, where strict work hours are mandatory. Moreover, they allow you to set a clear definition of Done on projects and tasks.

How to improve it?

Consider the points described above? How do you assess the efficiency of your work and organization? Keep an open mind on digital tools that can help your company work effectively, transparently, and in touch with your objectives.

Partnership marketing

What is it?

Partnership marketing is a long-term promotion strategy that includes partnering up with more prominent brands to increase sales and visibility. The main feature of this method is that both parties obtain significant benefits from collaboration. One major benefit is cutting costs on resources, advertising, and conversion rate optimization.

You need to manage appropriate channels and partners to meet changing customer needs and business goals.

Example

Companies in the automotive industry often partner up with strategic businesses to offer discounts or other benefits to common customers. Such examples are car insurance companies that partner up with car retailers to improve their sales.

Car companies offer discounts for insurance to customers who choose their brand and sales grow on both sides. Car retailers offer integrated products to their customers, while insurance companies attract more buyers. The deal produces a win-win-win effect and increases the conversion rate exponentially.

What to look out for

Keep partners loyal. Our golden compass in this instance is long-term partnerships. A three-year contract for example shows commitment and allows you to build strong relationships with your partners. Start off with a concrete strategy and build your campaigns per your partnership deals.
Transparency. Communication, resources, costs must always be clear and accurate for both parties. Choose an integrated communication tool that allows you to receive notifications in real-time.
How business decisions are made. One best practice in decision-making is appointing the decision-makers from the start. They become accountable for future changes, upsells, scaling, and so on.

How to improve it?

With partnerships, the target audiences are generally very similar or you can build a large segment of users with matching interests. Keep an eye out for strategic partners that could help you grow in particular user segments, with punctual campaigns or products.

Stay visible for future partners on relevant social networks and create a well-defined strategy for promoting your company business-to-business. To help you in this endeavor, define your company’s long-term objectives and define the areas where you can collaborate with adjacent industries.

Channel diversification

What is it?

Channel diversification refers to the marketing channels you choose to use on the distribution of products from the manufacturer to the consumer. Why is this so important? Because no matter how good your product or service is, if it does not reach your target customers, it will not bring you revenue.

Benefits of using multiple integrated channels:

meeting your customers where they are;
you gain people’s trust;
don’t put your eggs only in one basket. Being on multiple channels offers you alternatives and reduces your risk;
gather relevant information about your audience that could be helpful in your strategy;
you can compel current customers while drawing in new ones;
grow customer loyalty;
conversions increase;
expand your reach and your revenue;
depending on the channel, you can reach new audiences which may be relevant for your strategic goals;
channel diversification pushes you to explore and learn more.

Example

You have a multitude of online and offline channels you can mix and match, depending on your strategy:

wholesalers;
sales team;
manufacturer’s representative;
direct selling;
selling through intermediaries;
video marketing;
SEO & PPC;
social media;
email marketing;
your website;
content marketing;
word of mouth.

What to look out for

Not sure what channels you should choose? Start with Google Paid Search and Facebook Ads. Once you have good results on these channels, begin to expand your marketing mix beyond Facebook Ads and Paid Search, depending on your needs. Now be careful because the more you expand your marketing mix channels, the harder it becomes to understand what exactly drives good results.

When choosing your marketing mix, focus on those channels that maximize ROI. If you want to try offline channels as well, be prepared to run surveys to measure success.

Finally, be prepared for the time and money it could cost you when testing new channels.

How to improve it?

When testing new channels use a channel expert and not a generalist one. While a generalist would manage to maintain the communication at a superficial level, an expert has an in-depth knowledge of that channel, knows exactly how to communicate with the audience that frequents the channel and how to make it a success.

Don’t underestimate the creative part. Make sure you have the design and production resources you need.

Are the channels right for your business? Take these aspects into account when you want to choose them:

What is your audience? Are the channels right to reach it?;
Target your ads;
Can you measure the success of your channel efficiently?;
Is channel success relevant to the business and strategic goals?;
Does the channel add value to the business?.

The changes won’t stop. It is a disruptive environment that will challenge you every step of the way, but it challenges you to be better as well. The difference in the market is made by how ready you are to predict and meet the changes, rather than reacting at the moment in which it happens. All these metrics that we have explained help you to be agile. This is what it means to be strategic agile. Is your company ready?

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