Primary vs Secondary Stakeholders: Core Difference Explained

Understanding your stakeholders and meeting their interests and expectations is key for desired project outcomes. But before you jump into the delicate task of stakeholder management, it's important to study all the relevant groups and understand their particular needs.

In this article, we will walk you through all the basics that will guarantee a solid foundation in stakeholder engagement.

• Primary vs secondary stakeholders definition
• What are primary stakeholders?
• What are secondary stakeholders?
• Examples of primary vs secondary stakeholders

Defining primary vs secondary stakeholders

Whatever project you run, all stakeholders matter and deserve an adequate level of attention and interest. However, the degree of their involvement, impact, and interest in the project differs depending on the type of role they assume in regards to your project.

Your stakeholders can be either internal (coming from within the organization) or external (coming from outside the organization). At the same time, all those stakeholders can also be grouped depending on their degree of involvement and impact, making them into primary and secondary stakeholders.

What are primary stakeholders?

The easiest way to identify your primary stakeholders is this: can they have a strong direct influence on the business? If yes, they deserve a spot in the primary stakeholder group. On top of that, primary stakeholders are usually involved, each to their own degree, in your daily business operations. They can have a decisive or at least a highly impactful say in the roadmap your project follows and the goals it tries to hit.

Your primary stakeholders can be anyone from investors and business owners to employees and customers. Each of these groups has a clear financial stake in the project, which means they will benefit when it succeeds and will hate to see it fail.

But although these groups might have clear vested interest and are easy to identify under the "primary" vertical, there are a few other stakeholder groups that might be tricky to pinpoint. Let's look at them in more detail.

• Suppliers. The financial success of their business depends on the financial success of yours. When your project management runs into a wall because of their delays, that will have a direct relationship with business challenges on their end.
• Customers. This stakeholder group is usually involved at least in the project milestones you have. However, if they are unhappy with the project progress presented, they might even call the whole initiative off (if we're talking about a service-based business).
• Investors. Although they are not involved in the daily matters of the business or project, they have a direct financial interest, which means that their say can be decisive at any point in time.

What are secondary stakeholders?

Secondary stakeholders tend to be more passive than primary stakeholders and do not have a direct interest in project success. However, this does not mean that you should ignore this group or write them off as low-impact/low-value. In fact, secondary stakeholders can come into play when you least expect it. If you don't develop and maintain a positive relationship with them, things can backfire.

Secondary stakeholders is quite a broad category, which includes government agencies, regulators, activist groups, communities, media, etc. Your stakeholder relationships should be particularly good with these groups as they often have the power of the masses or the law on their side. Luckily, stakeholder mapping and an in-depth stakeholder analysis will help you pinpoint all the groups to keep an eye on and the right ways to communicate with them.

Now, how are some of these groups relevant?

• Media. How your business is presented in the media can have either a positive or a negative imprint on its reputation. What's more, positive media relationships can often make it easier to reach the right audience at the right time.
• Competitors. What your competitors do and how much success they have in that will always have some degree of impact on your roadmap. Although teaming up or cooperating with competitors is not something that is required (as it might even be impossible), what this stakeholder group does can impact your business plans.
• Customers. If the product you deliver does not land well with customers, there will be little to no revenue, which, want it or not, will push you into pivoting or reimagining the whole project or business idea. After all, it's all about keeping the end user satisfied.

Examples of primary vs secondary stakeholders

To elaborate even further on the topic, let's consider a specific project and see how effective stakeholder management can help you identify all the relevant parties in the game.

Suppose you want to build a shopping mall someplace in the city center. Here are some of the stakeholders you need to consider for this project.

Primary stakeholders

• Investors. Having put considerable amounts of money into the construction project, investors will want to see it up and running as soon as possible. As the key budget holders, they can have a say in the location of the mall, its main value proposition, target market, etc.
• Construction service provider. As the group that will execute the project and receive payment for the job done, employees (or contractors) and their productivity levels have a direct impact on the project delivery and the company's success.
• Suppliers. Suppose you have a dedicated supplier that takes care of all the building materials required for the site. If they have delays, your project will stagnate.

Secondary stakeholders

• Government agencies. If you are building in the historic center of some ancient town, the government might put a cap on how tall the building will be. This, in turn, will impact the return on investment — less space to sublet to individual businesses & lower income and return on investment.
• Consumers. If potential consumers are unhappy with the value proposition of the mall, the way it is made or the way it caters to their needs, that will have a direct impact on the ROI of the project.
• Communities. Local activist groups will have a say in the initiative in case they see it will have a negative impact on the life of local communities, will cause a surge in consumerism, wreak havoc on the ecosystem in the area, etc.

The sooner you map out all the relevant groups and their respective stakeholder interests, the more likely your project is to end in success.