Three steps to using a PESTLE analysis effectively in your marketing

Three steps to using a PESTLE analysis effectively in your marketing

A PESTLE Analysis is meant to be a crucial part of planning your marketing so that you can rest assured your marketing works. However, it’s often taught poorly, and so many of us do this crucial analysis in a way which doesn’t help our marketing much.

Here are three key steps we recommend you take to ensure your PESTLE analysis helps your marketing become even more effective.

Context – when to use PESTLE

A PESTLE analysis is a vital part of the suite of frameworks we can use to analyse our market environment as part of our Marketing Planning and Implementation Framework (at The Marketing Spaces, we like the SOSTAC Framework by PR Smith).

This ‘Situation Analysis’ answers the question: where are we now? 

Marketing cannot work if it is not planned, created, undertaken, and then reviewed in the context of the marketplace in which your organisation is operating.

Put simply: you cannot do marketing in isolation. It must be set in the context of what is going on in your audience’s lives and their worlds. 

SOSTAC diagram - framework by PR Smith

When we do this ‘Situation Analysis’ of what’s going on out there, we need to review and analyse three areas:

 

  • The Macro Environment
  • The Micro Environment
  • The Internal Environment

A PESTLE Analysis looks at the market environment your organisation has the least control and influence over – the Macro Environment.

Macro, Micro, Internal Environment diagram by Palmer and Hartley, 2010

Step 1. Focus

A PESTLE analysis first goes wrong because the remit for it is too broad. Too often, people look at EVERYTHING that could possibly fall under each of the PESTLE areas.

You need to have some form of focus while also scanning the horizon.

Start your focus with:

  • The market your organisation operates in
  • Your segments/audiences in this marketplace
  • The Products or Services you sell

For example:

ABC Software Ltd primarily operates in the UK and EU markets.

Segments: Businesses that are enterprise size and need document storage systems.

Product: Cloud-based document storage system.

When undertaking a PESTLE analysis, you focus on these areas. 

So, the questions you need to answer are:

  • What is going on Economically* in the UK and EU business world right now?
    What’s coming up in the next 3, 6, or 12 months that might impact them or change for them?
  • What is going on Economically* in the world of large Enterprises? 
    What’s coming up in the next 3, 6, or 12 months that might impact them or change for them?
  • What’s happening Economically speaking with Cloud-based storage systems?
    What’s coming up in the next 3, 6, or 12 months that might impact them or change for them?

The *star shows where you can work your way through each area of PESTLE that is relevant to your organisation. 

This is a much tighter, more helpful approach than just blasting out everything that you can think is happening. And if you are worried that you might miss something, then that is why you do the horizon scanning – see what is coming up in the next three, six, or twelve months and note what is on the horizon that could have an impact.

Step 2. Relevance

We just touched on it; you only need to work your way through the areas of PESTLE that are relevant to your organisation.

So, if you work in an industry that has no legal ramifications coming up, make a note of that, and move on. I’ve too often seen people think they need the same number of points in each area. This leads to an analysis that is bloated and unhelpful.

You may also need to combine areas. For example, many organisations find that ‘Legal’ and ‘Political’ considerations are combined.

For example:

‘The UK Parliament will pass a law around Data Security on the Cloud – this means adapting our product to meet it’.

The key thing is that this event and its impact on your organisation have been noted and will feed into your analysis. Whether you want to put it under ‘Political’ or ‘Legal’ depends on the rest of your analysis and where it all fits in.

Step 3. Frequency

We live in an ever-changing world. The pace has sped up – when marketing frameworks like PESTLE were first conceived, the world was more stable and the pace of change slower. So doing an annual Marketplace Audit was fine – the market you were operating in would be fairly similar in many areas one year on.

This has changed, and it means the frequency with which we analyse our marketplace has to change too.

We recommend that some form of market scanning is included in your regular marketing activities and that it is linked to answering the question:

How does this affect our customers/audience and our products/services?

This marketplace scanning can be a daily, weekly, or monthly activity. 

If you notice that a change is coming, or you have flagged that in a previous PESTLE analysis, then you may wish to diarise your ‘update’ Macro Environmental Analysis for around that fundamental change.

If your market is changing rapidly, you may need to undertake a PESTLE update analysis monthly or quarterly. 

Or you could do an update PESTLE analysis before a campaign launch, product launch, or product update launch.

You must choose a frequency that best suits your organisation and will give it the valuable information it needs at the right time.

For example:

ABC Software Ltd does a complete PESTLE analysis yearly as part of its annual marketing review and planning. 

But their Marketer has scheduled in quarterly ‘update PESTLE’ reviews to bring together what they are gathering about the marketplace as they go along and run an update PESTLE analysis. This is shorter than a full analysis but allows them to see what has changed and what might change.

There are alerts set for key phrases, e.g. ‘UK Enterprises’, ‘Document Storage Solutions’, ‘Cloud-based solutions’, so they are alerted to news as it happens.

The Marketer may also adapt the dates the Quarterly Update PESTLE analyses happen to tie in with Sales Campaigns or new Product Launches. 

Conclusion:

A PESTEL analysis can be an incredibly strong tool in your marketing tool kit – but only when used well. 

For more information on the detail of how to do a PESTEL analysis, watch our Insights Video, ‘What’s going on out there? – External Marketing Audit’

And work your way through our Seminar, ‘How to do a Marketing Audit that’s worthwhile’.

VOD: Outline of a Summary Strategic Marketing Plan

Watch this video to become even more effective at creating your marketing strategy.
Premium
Scroll to Top