Magazine article Risk Management

Marketing Risk Management

Magazine article Risk Management

Marketing Risk Management

Article excerpt

Risk managers can find it extremely difficult to gain internal support for their programs, especially when it comes to budgets. The low profile of risk management can be changed, however, through an internal marketing approach. It is all a matter of applying the marketing techniques of any business enterprise: pursuing your target market--executive management--and adhering to the four P's of marketing--product, price, promotion and place.

Why the Need to Market?.

The majority of managers understand how risk management applies to their business. They understand what a disaster is and its potential for causing loss of revenue as well as public trust. What, then, causes risk management to share the same emotional level as conducting a yearly inventory or reading an autopsy report?

The field of risk management is still in its adolescence. This means that it may not be fully accepted at all levels of business functions but it also holds much potential. Consider the growth stage of a product: given a quality product, with little competition at the start of its development, high profits result. Consider risk management in the same light--an emerging product to be sold. When you market your risk management services internally, very few other organizational units will be competing with you; the result should be success in getting the risk management message across.

Of course, products are generally tangible, concrete items. As a service, risk management is not. The value of risk management to your company may not be easy to measure. But although these services are inherently difficult to market, there are techniques to make them easier to identify and measure, and thus promote.

Keeping It Real

The major challenge to marketing risk management is the feeling that a disaster--or even a major problem--will never strike the organization. Risk management professionals need to keep the horror, so to speak, present--much like an attorney trying to convict someone of a horrible crime. The attorney dramatizes the case over and over during the trial, illustrating the horror before the jury. The attorney thus captures the emotions and imagination of the intended audience.

Risk managers can do the same. For example, one manager went into a board meeting and threw "anthrax" on the boardroom table. His objective: use a creative demonstration to scare the board members into realizing the company's vulnerability. The gasps from the audience were real. The extreme tactic worked.

Of course, persistence helps too. Dan Swanson is director of IT business continuity with American Re-Insurance, in Princeton, New Jersey. He has gained management support for a standing committee, a training awareness program, business unit contingency plans and recovery exercises. He attributes his success to his ever-vigilant efforts to keep the urgency of risk management present.

Marketing Tools

Why would conventional marketing practices work? How does risk management lend itself to marketing?

Philip Kotler's classic book, Marketing Management (Prentice Hall, 1999), defines the marketing mix as the set of marketing tools a firm uses to pursue its marketing objectives in its target market. Since you have a product (a risk management program), can identify the place that provides product accessibility (corporate infrastructure) and can determine a product value (the price the company will pay when unexpected problems arise), you can design a marketing plan to promote your goals to upper management, your target audience.

The Target Audience

The target audience could be one person, such as your CEO, or one thousand people, such as the entire organization's global managers. It is not important how many people you need to influence but how you handle them.

First, you must segment the audience. Considerations for sizing up the target audience include measuring the audience's capacity for risk and identifying priorities associated with their job descriptions. …

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