For years, businesses have leaned on the tried-and-true method of SWOT to help shape their business strategy and marketing execution. SWOT—Strengths, Weakness, Opportunities, and Threats—assists in shaping internal and external parts of a business.
Strengths and weaknesses are internal analyses of your businesses, and opportunities and threats are external factors that can positively or negatively affect your business. At a high level, here’s a breakdown of each part of SWOT:
How SaaS company PactSafe used SWOT analysis to position itself against competitors
SWOT is its most successful when used honestly. Try to be as transparent as possible so your business can achieve its highest results. When diving into weaknesses, be clear in identifying where the lacking areas lie. If you’re a new SaaS company outlining your product’s strengths and weaknesses, do not simply list the product feature that’s not your highest-value point, state why it’s not:
- Is it because your customer doesn’t find it useful? Why is this?
- Is the production adoption of that feature low?
- Does that feature prove to not be a decision-making feature in deal-closing?
- Where does that product feature sit on your ideal customer’s list of needs?
SaaS company PactSafe dove into the e-signature market with its modern signing methods, including click-to-sign (single click to accept a contract) and text-to-sign technology (sign by simply replying, “Agree” over text.) With giants like DocuSign on the “competitor” side, PactSafe Chief Product Officer Eric Prugh shares that they focus on product features that:
- Provide untapped, greenfield opportunities;
- Uncover a big market that is seemingly unserved;
- Are in-line with their perceived view of where things were going;
- Their major competitors don’t have;
- Enhance their biggest weakness: Going up against enterprises like DocuSign in deals.
PactSafe uses this analysis to drive its product roadmap, which includes building a Legal Center where its customers can manage all of their contracts—something DocuSign doesn’t provide. In building their Legal Center, PactSafe prioritized a gap seen within its customer base: A single, dedicated portal to manage old and new contracts, revisions, acceptances, and more.
“[We’re most impressed] that [PactSafe] exists! We did a lot of research, and there were no other companies that were managing online legal agreements. There are a lot of companies like DocuSign who offer contracts, but I love what PactSafe does to help manage [our contracts] all in one place. It’s very easy to use and keep track of.”
How often SWOT should be performed: Even tech giants like Amazon use SWOT
As an industry-wide benchmark, startups should perform SWOT every two or three months, established businesses should perform this practice every six months. As a business grows and scales, there will be natural evolutions in your product and customer needs. Adjusting messaging and your product roadmap is a necessity that comes with that growth—especially when it comes to the tech industry. Prugh shares that his team performs some aspect of SWOT on a quarterly basis to keep a pulse on how PactSafe’s products are measuring up against competitors and to see if the needs of their customers have shifted or evolved.
A classic example of SWOT analysis driving major pivots in product and messaging is tech giant Amazon. What started as an online bookstore in 1994 has turned into a billion-dollar business. No one could have predicted that in 2018 Amazon would have purchased land for its massive fleet of cargo jets, but CEO Jeff Bezos’ ability to adapt to the evolution of e-commerce is what put Amazon as the leading business in its industry.
Amazon acquired Whole Foods in 2017 for $13.7 billion, and this opened an entirely new market for the tech giant to dominate. At a high-level, here’s an example of a SWOT analysis of the acquisition:
- Strength: Distribution and having a real brick and mortar presence; ability to scale groceries with their leverage in supply chain;
- Weakness: Margin of grocery business;
- Opportunity: Capture market share in grocery and integrate Amazon Prime memberships to drive that market share up even further;
- Threat: Wal-mart, inexperience in the brick and mortar grocery business, and other grocery chains being proactive in taking next steps to compete with Amazon.
A year since the acquisition, Amazon has invested heavily in its strengths, the main one being data. Amazon has taken the plethora of data it obtained from Whole Foods, mapping out a shopper’s buying journey and putting a science behind scaling its loyal customer base.
Take a look at the below infographic outlining the incredible product and revenue growth from Amazon:
Who should be involved in SWOT
While executive insight is important when performing SWOT, it’s crucial to involve different leaders in your company, so you have the perspective and influence of all aspects of your business. In an article this year from Business News Daily, Founder and CEO of Paradigm Computer Consulting Shawn Walsh “said his management team conducts a quarterly SWOT analysis together.”
“The collective knowledge removes blind spots that, if left undiscovered, could be detrimental to our business or our relationship with our clients,”
Prugh mirrors the same value in team members included with SWOT, sharing that leaders of each department within the organization should be present.
Want more marketing tips? Take a look at our previous article, “The new pool of SaaS marketing: How to leverage your direct and indirect competitors’ audience to your advantage”.