Last month I wrote a post about the BCG (Boston Consulting Group) matrix, which is a quick and easy way to examine your insurance book of business, and how to use it to start developing your marketing strategy. Another tool for developing your marketing strategy, widely used by marketing consultants, is the SWOT analysis.
SWOT stands for strengths, weaknesses, opportunities and threats. The first step in performing a SWOT analysis is to identify your firm’s strengths and weaknesses. For example, an insurance agency that’s been doing business in the same town for many years would probably consider its visibility in the community a strength. (In marketing terms, you would call this a “branding” strength.) If the agency has tended to simply continue servicing existing customers for the past few years, without acquiring many new ones, that would be a weakness. And so it goes.
You try to list at least your main strengths and weaknesses on your SWOT. Professional marketing consultants usually recommend you obtain customer satisfaction surveys and conduct focus groups to obtain an objective view of how customers perceive your firm’s strengths and weaknesses. Employee surveys are also useful for assessing strengths and weaknesses.
Strengths and weaknesses are mainly those forces that a firm can control itself. Some of the main categories to look at when assessing your strengths and weaknesses are:
- resources, such as access to capital
- capabilities, such as your personnel and relationships with insurance companies you represent
- your brand, including you logo identity and other corporate communication pieces
- processes, such as your internal operations and how you communicate to your customers and other audiences, and
- assets, such as your book of business and your building, if you own it.
The next step is to identify opportunities and threats. These are factors that are mainly external to the firm and not directly under your control, though the firm may be able to take advantage of them or mitigate their effects. For instance, a few years ago when insurance agencies still kept and processed a lot of paper, there was a significant opportunity to save time and money by switching to computer systems. Today, many agencies perceive online insurance vendors as a threat to their business. Other kinds of environmental forces, normally outside a firm’s control, that may provide either opportunities or threats come from suppliers and distributors (insurance companies being the prime example here), competitors, regulators, the economy and the political climate.
It’s helpful to visualize the information that goes into a SWOT analysis by organizing it into a matrix, like the one I show here.
|SWOT||Beneficial (Capitalize)||Harmful (Shore up)|
|Internal (Your agency)||Strengths||Weaknesses|
|External (Your environment)||Opportunities (Invest)||Threats (Identify)|
Once you’ve identified your firm’s strengths and weaknesses, opportunities and threats, the next step is to analyze the information to develop ideas on making changes that will improve performance. Finally, you want to shape those ideas into goals with defined, achievable objectives.
In my next posts, I’ll create a hypothetical insurance agency I call ABC Insurance to illustrate how to fill in the SWOT matrix, then show you how to take the information and develop a marketing strategy.
Meanwhile, if you’d like to try your hand at filling out a SWOT matrix for your own business, you can download a template here.
To read the next post in this series, click here.