External marketing factors are an undeniable reality for businesses of all kinds. External factors can adversely impact business marketing efforts, whether launching a new product or maintaining the current market share.
Companies that remain steadfast, agile and responsive to the external marketing environment are better positioned to succeed in today’s marketplace. Moreover, business leaders win when equipped with the marketing mindset to prepare and pull the company through marketing mishaps.
Of course, that is not a certainty.
The external environment of marketing is shrouded with uncontrollable factors. Business owners must ensure that their strategies evolve alongside those changes to succeed. In worst-case scenarios, your business gets crippled, and you must pick yourself up from the rubble and start over.
We’re here to prevent that from happening. Understanding and embracing these external factors is critical for businesses looking to thrive and grow in today’s ever-changing global economy.
Here, we aim to educate you on the uncontrollable external factors in marketing that plague residential home service businesses. This article will look at those risk factors and recommend coping strategies.
What are Uncontrollable Factors in Marketing?
Every marketing decision you make is affected by risk factors surrounding your business. While your focus is to promote your solutions to the public, external elements may act against them and hinder delivery. As a business owner, you must consider these risk factors and develop mitigation strategies.
In the residential home service industry, there are uncontrollable factors that are not observed in other industries. HVAC, roofers, and landscapers deal with weather daily in relation to their availability. This is not an issue in an e-commerce business model that sells origami.
Awareness of these external factors in marketing equips your business to deal with them effectively. After all, the successful execution of plans, more often than not, involves planning for elements we cannot control.
Before we look at the residential home service industry’s seven external factors in marketing, let’s first broaden our horizons. We’ll visit both controllable and then uncontrollable risk factors.
Controllable Risk Factors
Controllable risk factors or controllable variables are internal factors that businesses have complete control of. Generally, there are five internal risk factors that you can control to serve the objectives of a business. In the residential home service industry, this includes:
- Product or service. Your category influences your render’s solutions; however, it is within your power to decide which ones to sell. For example, landscapers may stick with lawn care and maintenance or, if appropriate, offer landscape design services.
- Price. How much you sell your products and services is up to you. Of course, market research, consumer preference and competitor analysis come into play. However, you have complete control over how to structure your pricing strategy.
- Promotional tactics. Do you dip your toe in digital advertising and marketing? Should you fixate on offline marketing tactics?
- Service area. This refers to what location you want to focus primarily in. Is it okay to stay within your community, or is expanding your service coverage to your county viable? Indeed, budget and workforce are important considerations here, but you ultimately give the signal.
- Suppliers (if any). Some businesses don’t have suppliers, while others rely on suppliers for their services. For HVAC contractors, you want to ensure you’re getting the best heating and AC units at the best possible price. While market supply and demand affect this, business owners can choose their sources.
- Relationships with stakeholders. Relationships are a two-way street which may make them seem like external factors in marketing. However, as part of that relationship, you control whether you fulfill your end of the bargain. When committing to the contract becomes a heavy burden, terminating it is your prerogative.
Most internal risk factors have certain elements that are externally triggered, but that doesn’t change their classification. Business owners maintain an immense influence over the aspects above relative to the external force. Companies are wise to intercept internal risk factors and diligent in handling those variables within their power.
Uncontrollable Risk Factors
The uncontrollable risk factors are where things begin to complicate. Uncontrollable factors are also called external factors in marketing because they’re beyond the internal team’s control. In other words, details that affect the marketing procedures you have little to no way of changing.
For example, in times of economic turbulence, people tend to control their spending and focus on their needs. You could lower your price and zero out on any margin, but that makes no sense and only compromises your business. In my years of working with residential home service businesses, I have observed seven external factors in marketing:
- Society and Culture
- Politics and Regulations
- Technological Advancements
- Unexpected events
We will discuss these things in detail in the following texts.
Being vigilant in detecting uncontrollable external factors in marketing is key to ensuring the success of any business. External forces can impact a company’s marketing efforts, from economic fluctuations to unexpected events. While internal teams may develop the skills to mitigate these threats, business strategists are better equipped to manage them.
Look no further if you need an expert business strategist to help manage external marketing forces. Wizard of Sales® has worked with residential home service businesses for many years to strategize and navigate the industry. Moreover, we help improve company culture and train salespeople in their sales endeavors. We could do the same for your business — all it takes is booking a free call.
Uncontrollable External Factors in Marketing
There are seven external factors in marketing that are beyond your (or your team’s) control. We subdivided them into two groups: common aspects and occasional factors.
Usual factors refer to those external factors in marketing that are always present and may vary in degree or intensity. No matter the era, regardless of industry, these factors exist. What makes them different is that you know how these elements can affect your business operations. Moreover, they are often fixed aspects that experience seldom (only when needed) changes since their conception.
On the other hand, occasional factors refer to external forces that come into play periodically. They may occur randomly or have dedicated dates that may impact your marketing efforts.
There’s no way to control these external forces in marketing directly. However, you can mitigate and manage how it affects your business by preparing for them beforehand. Let’s check them out.
Factor 1: Economics
Economic conditions are external factors that significantly affect businesses and can significantly impact marketing efforts. Factors such as inflation, interest rates, exchange rates and Gross Domestic Product (GDP) all play a role in determining the health of an economy. By extension, they can impact your business’s performance as you operate within the economic landscape.
For example, consider an economy with low consumer confidence — when buyers are unsure of the current economic conditions. This may negatively impact the number of calls you get for your home services. Despite being a need, callers may feel apprehensive about calling an HVAC contractor, given the economy.
As such, it is essential for businesses to carefully monitor economic trends and make adjustments to their marketing strategies accordingly. Whether through pricing adjustments or promotional activities, companies must be prepared to respond quickly to economic disruptions. Once you notice the signs of economic conditions shifting to a negative light, be proactive.
Factor 2: Society and Culture
As external factors in marketing, society and culture can have a significant impact on the ways that businesses market their solutions. Changes in social norms and cultural preferences can shape consumer behavior, affecting the success of marketing campaigns.
For example, there has been increasing pressure on time. As a result, it is more and more challenging to catch people at home two or more times a year to get out and deal with scheduled preventative maintenance.
This leads to a greater chance of the system breaking down at an inconvenient time or premature catastrophic failure. This also impacts your labor force and keeping people busy in the shoulder seasons.
In addition to shaping consumer preferences, society and culture can also affect how companies advertise their products. Recently, another shift we’ve observed is the emphasis on diversity and people of color. Businesses that are vocal about inclusivity as part of their company culture are more likely to be patronized. Furthermore, advertisements that display diversity are more recognized and accepted by consumers.
Factor 3: Politics and Regulations
Regulations shape marketing strategies. These external factors have an impact on business operations. State and federal laws can influence everything from pricing models to compensation plans, and everything in between.
For example, government regulations are about to change the types of refridgerants sold by an HVAC contractor. This will not only increase costs of equipment, but also change the way we resolve coolant issues in the field in coming years.
On the other hand, a sewer contractor may be limited in their jurisdiction to repair or replace drain lines. For instance, the inability to excavate properties if repairs extend to the public domain is one form of uncontrollable factor. This forces businesses to terminate contracts or innovate new technology regarding drain line repairs.
Licensing requirements from the government may also limit which services businesses can provide in this industry. Moreover, changing economic conditions or shifting consumer preferences is partially attributed to the government.
As such, businesses must carefully monitor and respond to laws and regulations changes. This department’s knowledge helps develop marketing approaches for the residential home services market.
Politics are also an uncontrollable external factor in marketing. No, I’m not speaking about legislation. Instead, these are events and actions that happen which may affect or even radically change the course of marketing. Examples include:
- Elections. Voting periods may drastically decrease sales during the activity. Moreover, with new leaders come new policies and regulations that may affect the overall external environment of marketing.
- Referendum. The constitution has a powerful hold on businesses’ operations and marketing in general. Referendums may cover constitutional amendments which may involve laws relevant to companies.
- Plebiscite. Like referendums, plebiscite involves constitutional amendments or policy changes. But this time around, not only officials but also the populace has a say in the issue. While uncommon, the case in question may cover policies on businesses that can affect marketing.
Factor 4: Technological Advancements
Technological advancements have had a profound impact on businesses across most industries. Not just in revolutionizing business operations and streamlining business touchpoints but also in improving customer engagement and reach out.
For example, new technologies like the internet, social media and mobile devices have opened up doors to reach potential customers. At the same time, however, these advancements have also brought new challenges to businesses operating in this space. For example, companies must constantly stay up-to-date with changing online algorithms and trends to effectively engage their target audiences. Additionally, they must ensure that their marketing strategies are optimized for different devices to maximize their digital marketing efforts.
Technological advancements also become external marketing factors, as they affect business operations. For instance, one of Wizard of Ads™ clients revolutionizes drain line repairs by eliminating the messiest portion — the digging. Using robots and lasers, their company repairs or replaces pipes through a small opening without irreparable property damage.
Factor 5: Competition
Most of the time, businesses overlook all other uncontrollable external factors in marketing listed above. However, they pay extremely close attention to their industry’s competitive landscape.
Competition is an external factor that can have a significant impact on marketing efforts for businesses in any industry. In order to be successful, companies must continuously monitor and adapt their marketing strategies to stay ahead of their competitors. This may include:
- Investing in new technologies or tactics
- Developing innovative products and services
- Focusing on improving customer satisfaction and retention
- Increasing the value of products or services
At the same time, businesses also need to watch out for emerging competitors that offer cheap and cheerful solutions. All things being equal, customers gravitate to the lowest price. That’s why you need to leverage your perfectly fair competitive advantage or value to be successful in today’s crowded marketplace.
Factor 6: Weather
Weather can significantly impact the sales efforts of businesses in the residential home services industry. Adverse elements can make it difficult for companies to render services and serve customers at the highest level. In the industry, there are two types of weather that business owners need to be aware of.
This refers to adverse weather conditions that can decimate infrastructures — referred to as “macro” because the marketing effects are felt by both businesses and customers, not just in residential home services. Typhoons, hurricanes, blizzards, and other natural disasters fall under this category.
This aspect of weather points to seasonality and is only relevant to residential home services businesses. Many businesses in the industry are season-dependent.
For example, the types of HVAC services you render will depend on the current season. AC installations prevail during summer, while heaters take the cake in winter. Other businesses like landscaping and pest control likewise depend on weather conditions.
Factor 7: Unexpected events
As mentioned above, the residential home service industry is riddled with unexpected out-of-control events. These external factors in marketing could also affect basic business operations and systems.
For example, death or accidents can occur during primary responsibilities. Electricians, landscapers, and HVAC are most susceptible to these unexpected events.
One of the most prevalent unexpected events in recent history is the coronavirus pandemic.
Factor 8: Google
Given the unprecedented power of Google, and to a lesser extent, Facebook, companies are forever at risk of the terms and conditions of companies. There are a number of companies that have suffered the fate of
- Getting their Google Business Profile shut down for days or even months
- Getting their Local Service Ads shut down for days or even months
- Losing all of their online reviews
- Getting outbid in their market, making PPC unattainable
- Algorithm changes that make all previous online marketing efforts fruitless
There are many ways you can lose it all when you put all your eggs into the digital budget. And branding efforts would have needed to have begun 6 to 9 months prior to start taking effect today.
Many external factors in marketing can shift the tide of how businesses operate. It’s essential to be aware of these external factors and be prepared for any changes that may come along. Whether ordinary or occasionally occurring external factors, proactivity is a must in preparing safety nets should they arise. Only then do you ensure that your business survives and thrives during the process.
While your team can provide insights by tracking external factors, nothing beats the experience of a time-tested business strategy.
Look no further if you need help keeping track of your residential home service business. Wizard of Sales® is a Master Strategist you can trust. Book a call.