Critical success factors are identified by McDonald et al. (2014) as factors that represent important customer needs. Unlike qualifying factors, these are not expected to simply survive but they are really important to the target market.
Improvement on areas identified as critical success factors result in gaining a competitive advantage in the market, the flow on effect from this is an increase in market share. Marketers need to fully understand the critical success factors in their target markets and be able to track the performance of their (and ideally their competitors’) market offerings appropriately (McDonald et al. 2014).
When identifying critical success factors, McDonald et al. (2014) identifies some areas to consider:
- Consumer needs that are met and unfulfilled
- The varying importance of the critical success factors
- Expected performance levels and how well company is meeting them
- Performance in comparison to competitors
- Customer perception and points of competitive advantage
To put it simply, McDonald et al. (2014) summarises critical success factors as ‘winning through differentiation against key competitors’. There are some steps that can be be taken by marketers when it comes to using critical success factors:
- Provide a clear description
- Identify relevant metrics (measurements)
- Identify where information comes for these metrics
- Rank CSF in order of importance
- Identify current performance
- Set a SMART goal for improvement
- Know the benchmark set by competitor in the market
McDonald, Malcolm, Peter Mouncey & Stan Maklan (2014) Marketing Value Metrics: A new metrics model to measure marketing effectiveness. Kogan Page: London.