Issues relating to brand safety and security have gained prominence in the last few years, thanks to the high-profile cybersecurity incidents witnessed across all industries. As you create a marketing plan for your business, you should also factor in potential risks that might arise, and their potential impact on the company. Risk management allows the marketing department to identify and address risks that might hamper business growth.
Why Marketing Risk Management is Important
Anyone who has worked in marketing will tell you that there are lots of marketing risks. For instance, the best-developed program, product, or marketing plan can disintegrate for various reasons. When you think about this, you’ll realize why it’s essential to have a plan for mitigating such occurrences. Marketing risk management is all about anticipating risks and taking the necessary steps to reduce risks that are inherent in your marketing plan.
Where Do Marketing Risks Occur
Marketing Planning
Most risks occur during the marketing planning stage. In this case, risks will infiltrate your marketing plans right from the moment you envision them. Different marketing plans carry different levels and types of marketing risk, you should have franchise marketing system. While creating your marketing plan, you should identify your business objectives, action plans, and strategies, as well as potential threats (risks) to the program. In doing so, you’ll be in a position to make more informed decisions and embark on risk management earlier.
Opportunity Assessment
When creating a marketing plan, you must assess the business opportunities that lie ahead. While at it, you shouldn’t forget about potential risks that might arise. The opportunity assessment stage of the marketing development and execution process entails the evaluation and comparison of different opportunities. Often, marketers focus on market share, ROI, and optimizing awareness. Unfortunately, the pursuit of optimum sales and profit makes many marketers overlook potential risks.
While assessing marketing opportunities, you should similarly identify potential threats and rewards. As you evaluate your options for ROI risk and potential, you’ll realize that products/programs with a lower ROI as well as lower risk, are a better choice. Conversely, you can select high-risk opportunities due to the high potential reward on offer. Nonetheless, ensure that you’re considering both ROI and risk as you undertake opportunity assessment.
Product Development
When developing a new product or program, the concept that you approved might evolve for operational rather than strategic reasons. Resultant changes in execution may limit the performance and impact of the new program or product. Consequently, risks may also arise.
Product Launch
Many new products get launched, only for marketers to encounter internal budget cuts or changes in external market factors. There are lots of variables that introduce risk in the aftermath of a product launch. Minimizing the potential risk associated with new products gives them a better chance in the market.
Product or Company Failure
A simple product problem or public relations issue can hurt your brand’s reputation, thus putting your marketing plan on the verge of collapse. A robust and ongoing risk management plan should involve the implementation of operational checkpoints. This way, your company won’t face any significant PR issue or product problems. The risk management plan that you implement should also include crisis management and quality management programs.
Established Products
Even after launching your new product, competitors, or even changes in the economy, can impede your products’ attractiveness. Such external risks are not only hard to predict and control, but also have severe consequences. The best way to prepare yourself for market changes is by continually monitoring the market. This will ensure that both your operations team and marketing team know about potential market risks so that a response plan gets implemented.
When implementing a marketing strategy, risk planning should be at the center of all the decisions that you make. This will not only improve the marketing plan but also helps you identify potential risks before they become significant impediments to your business operations. Likewise, it would help if you identify an individual to spearhead your marketing risk management efforts.
Although the entire marketing team should play a role, there should be someone who oversees the whole plan. Effective marketing risk management also entails working with the organization’s management so that risk management gets integrated into your enterprise marketing plan. You should continually assess your marketing plans to identify potential risks in both your current and prospective programs.
Risks are inherent in all marketing initiatives. In the sphere of marketing, some risks are harder to identify and mitigate than others. The difference between a successful marketing plan and a botched one is how risks get managed. Having a proactive risk management tools in place will help you move new products in the market faster and with great success. Marketing risk management isn’t a straightforward undertaking. Nonetheless, regular and consistent efforts go a long way in helping you mitigate risks.
