As a business owner and financial planner you almost certainly will have heard of SWOT – but what is “TOWS”, and how can it help your marketing strategy?
SWOT refers to your company’s “strengths”, “weaknesses”, “opportunities” and “threats”, and it’s helpful to periodically review these aspects of your business to check its overall health.
One big problem with the SWOT framework, however, is that it fails to show how these different aspects of your business relate to one another. For instance:
- Are any of your business Strengths playing to the Opportunities you have identified?
- Have you identified any Threats to your business which your Strengths could minimise?
- Are there any strategies you could leverage which could reduce your weaknesses, by taking advantage of external Opportunities?
- Are there any Threats which your company’s weaknesses are exposed to, which need addressing?
This is what the TOWS framework attempts to address, and it’s a crucial component to any healthy financial marketing strategy.
TOWS: An Overview
TOWS simply refers to “Threats”, “Opportunities”, “Weaknesses” and “Strengths” – a reordering of SWOT. Typically, it is represented by a matrix along the lines of the below:
When you take a minute to look over the TOWS diagram, it usually starts to become clear how this is useful to a financial planner’s marketing. By examining your business through the lens offered by each “box” above, you can hone a marketing strategy which mitigates risk and exploits opportunities.
Example Strategy 1: Maxi-Maxi (SO)
Let’s look at the first box as an example. First of all, what are the specific internal strengths which you possess as a financial planning business?
For instance, perhaps one of your strengths is that you are qualified, experienced and successful in providing final salary pension transfer services to clients (something not offered by all IFAs).
Simultaneously, perhaps you have noticed an opportunity within a particular niche of the market (e.g. a certain industry) where lots of people are looking to transfer, but not many financial advisers are exploiting this new trend.
This is a clear chance to match your internal strengths (S) with an external opportunity (O).
Example Strategy 2: Maxi-Mini (ST)
Which external threats to your financial planning business have you noticed which your strengths could mitigate?
For instance, the new and increasing restrictions around privacy and data protection (e.g. GDPR) are sometimes seen as threats to financial planners’ traditional lead generation tactics.
No longer is it so straightforward to simply “buy” pensions leads “off the shelf”, for instance, especially if these people have not specifically opted into your brand communications beforehand.
However, if one of your key internal strengths as a financial planning business is that you have an exceptional inbound and content marketing strategy, then this is less of a threat to you.
You already have a steady stream of leads coming into your business through invitation, attractional and “permission-based” marketing. So, whilst your competitors who relied on dubious, “quick fix” marketing solutions struggle with these new laws and regulations, your strengths are helping to carry you forward.
Example strategy 3: Mini-Maxi (WO)
Are there any opportunities in the external environment which could improve your weaknesses?
For instance, perhaps lots of your clients have been asking for wills and probate services as you have been assisting them with their tax planning. However, this isn’t an area you specifically deal with and so you have struggled to provide value to them on this front.
Concurrently, you have also noticed an opportunity to partner with an external company which specialises in this area, and which is looking for financial planning partners to work with.
By taking the opportunity to outsource this specific aspect of your business operations, you could minimise one of your weaknesses and increase client satisfaction in their experience of your brand.
Example strategy 4: Mini-Mini (WT)
Are there any external threats which could seriously damage or even derail your business due to its weaknesses?
An example might be from society and/or government policy. Suppose you are a financial adviser which only offers restricted financial advice, but middle-high earners in UK society gradually decide to only opt for “whole of market” advice. That could land your business in serious trouble.
Alternatively, perhaps the UK government one day legislates that UK financial advisers can only offer “whole of market advice” – effectively outlawing restricted advice. What would happen then?
Of course, these are “what if” scenarios and unlikely to happen any time soon. Yet it’s important to recognise that changes to laws and societal attitudes/behaviours, however distant, could potentially pull the rug from under you unless you have a plan.
It is hopefully clear at this point how SWOT and TOWS are helpful for a financial adviser’s overall business planning, but how does all of this relate to your marketing?
By conducting a thorough analysis of your business using these sorts of tools, you are effectively establishing where you are as a business. Once you know where you stand, moreover, it’s far easier to understand where you want to be – and to start setting some sensible objectives to get there.
This is where your marketing strategy comes in – i.e. how will you get there? This is where you can start asking questions such as the following:
- Should we seek to increase our share of our existing target market, by selling more of our existing services?
- Should we seek to sell our existing services to a new market?
- Should we sell new services or products to our existing market?
- Should we sell new services or products to a new target market?
- Do we need to reposition our brand and services in the minds of our target audience?
And so on. These are all strategic questions in marketing which you fundamentally need to answer. Once you have these sorts of things firmly established, you can then move onto the tactics of your marketing – i.e. which tools, channels and materials will you use to set the strategy in motion?