first in marketing audits

No News Is Good News – Or Is It? The Marketing Audit: Preventive Medicine

Just imagine that you are in good health… or at least you think you are. Being in good health, you decide not to take your annual physical exam, or skip that mammogram and yes, even skip the recommended unpleasant colonoscopy

And why not — you’ve had no glaring indication of poor health. Plus, you saved some time and money, and you figure no news is good news. Or is it? Unfortunately, too many of us find out something may be wrong after the fact and are forced to react to, rather than prevent, poor health. This could have been prevented… that is why health check-ups are called preventative medicine.

It is no different for organizations. If anything, they, too, are living, breathing, productive and complex entities. Organizations have a pulse. And one of the most neglected pulses in many organizations is the marketing function.

Since the word “marketing” is so misused and misunderstood, let’s be clear — we are not talking about just sales, or your ad campaign in the paper. We are talking about Big M marketing – the heartbeat of your organization.

As marketing guru and professor Phillip Kotler states, “Marketing comes first. Marketing has simply become one of the most important functions of your business and speaks directly to your customer.” And management guru Peter Drucker’s words ring even more true in today’s volatile and ever-changing marketplace when he said, “Marketing and innovation make money. Everything else is a cost.”

As with your own health, not paying attention to the health and effectiveness of your organization’s marketing functions and processes can be a dangerous game to play and may leave you in a panic and in reactive mode.

As business leaders in your organization, you should know that no news is not good news. You simply can’t afford not to know the health of your marketing. You certainly can conduct your own marketing self health check-up, internal to your organization. Although this is a good exercise, it can be riddled with problems. Chances are high that it is not objective enough, and organizational politics and face-saving nuances fall into play. Before you know it, your organization is in a “no news is good news” situation, and that is not good news.

Given that the effectiveness and efficiency of an organization’s marketing functions can change so easily, the best way to assess the true picture of your Big M marketing health is to put your organization through an entire MRI scan from head to toe. This organizational marketing MRI is an independent and objective marketing audit. If anything, a marketing audit will give your organization a true baseline of marketing effectiveness.

Most organizations tend to think of the word “audit” in financial terms. And we usually might not mention marketing and audits in the same breath. But for the exact same reasons we look to our financial experts for help, we also need to scan our marketing practices from time to time to make sure they are in ultimate health in our marketplace.

A marketing audit is conducted in very much the same way as a financial audit, usually by a knowledgeable and objective third party using a systematic and diagnostic process to take a constructive critical look at every aspect of your organization’s Big M marketing functions and processes.

Organizations of all sizes choose to engage in a marketing audit for many reasons:

  • The leaders of many organizations have a gut feeling that no news is indeed not good news and that all is not well with their marketing.
  • For other organizations, external changes in the marketplace dictate the need for a marketing audit. These can include changes in the competitive landscape, shifts in the economy and customer behavior, changes in industry, marketing and product life cycles, advances in technology and mergers and acquisitions.
  • For some organizations, the impact of internal changes to the organization triggers the need for a marketing audit health check-up. These internal changes can include product line changes, a shift in sales, a desire to ensure a maximum return on marketing spend, a change in image, a weak brand, changes in the marketing mix, channel conflict, a general lack of marketing expertise and organizational restructuring or changes.

What is a Marketing Audit?

Similar to a head to toe MRI scan, a marketing audit is a comprehensive examination of your organization’s marketing functions and processes, including organizational strategies, tactics, objectives and activities. Engaging in a marketing audit or getting your marketing health tested will help ensure the effectiveness and efficiency of your marketing.

The marketing audit should have four key elements and must be:

  1. Systematic: Follows a logical, predetermined framework and an orderly sequence of diagnostic steps. The marketing audit should highlight improvements needed to accomplish your organizational goals. The systematic process results in a comprehensive action plan to address both short- and long-term needs.
  2. Comprehensive: Considers all factors affecting your organization’s marketing performance, not just trouble spots. The marketing audit should go beyond symptoms and address the real causes.
  3. Independent: A marketing audit has to be independent and objective for a real outside-in perspective. By the audit’s very nature, the marketing auditor must have no vested interest in the results and must be completely independent and not engage in any work that may result from the audit.
  4. Periodic: Marketing operates in a dynamic environment with an ever-increasing rate of change. Taking a preventative approach with periodic marketing audits should avoid the need to have a marketing audit done in a crisis situation after sales have fallen and morale is low. Marketing audits are beneficial to the health of your organization’s marketing in both good and bad times.

Dissecting a Marketing Audit

Although there are many different types of marketing audits in the marketplace, I only can speak of my own experience with marketing audits conducted by Marketingmri, Inc.

Typically a marketingmri audit begins with a meeting between the organization’s senior management and the marketing auditor. They decide on the scope of the audit, objectives, report and project layout, the project team, timing and other matters. It’s typically important at this point for an organization and the marketing auditor to discuss potential issues such as organizational resistance. It also is healthy to set parameters for the organization to address what they want to know. The marketing auditor should review all of the organization’s business plans, financial information, organizational charts and communication materials, and analyze marketing budgets, product costs and sales. The marketing auditor also should tour the facilities and interview management, employees, customers and sometimes even competitors.

The following is a dissection of topics treated in a comprehensive marketingmri audit for the purpose of assessing an organization’s marketing effectiveness and efficiency.

  1. Marketing Environmental Scan: An external micro and macro audit scan should be conducted, along with an assessment of the organization’s core competencies.
  2. Marketing Strategy Health Check-up: A thorough audit of the organization’s mission and marketing objectives, goals and strategies.
  3. Marketing Mix Health Check-Up: This is a critical area to most organizations, as marketing mix speaks directly to the customer. It probably also carries the largest marketing spend. Here, products, pricing, market channels, sales and the entire communication mix are audited.
  4. Marketing Productivity Health Check-Up: Marketing spend, profitability, cost effectiveness and marketing controls are assessed.
  5. Marketing System Health Check-Up: Effective and integrated use of management information systems, client relationship management systems, new product/service systems and R&D systems are audited.
  6. Marketing Organizational Health Check-Up: Formal structure and functional and interface efficiencies are audited for maximum organizational effectiveness.

When a marketingmri audit is completed, it provides a basis for developing a comprehensive corrective action plan to improve your organization’s overall marketing effectiveness. Even more importantly a marketingmri audit results in baseline score measurements for Marketing Effectiveness, Organizational Marketing IQ and Marketing Decision. These scores can be used to benchmark your organization’s marketing health and allow you to move towards ultimate marketing health.

A marketing audit should be part of an organization’s planning processes. The experience of undertaking a marketing audit should help your organization maximize its marketing ability and talent while growing in both knowledge and skills.

A good audit should stress correcting procedures and benchmarks rather than assigning blame to individuals. It should build up an organization and not tear it to pieces. An effective audit should allow your organization to learn throughout the process and own the results. Finally, a good audit should respect the organization’s time and must ensure privacy and confidentiality.

Time and Cost

The time and cost of a comprehensive marketing audit varies with the size of the organization and the scope of the audit. However, “get in and get out” checklist marketing audits are not effective, and neither are audits that need to take a year or two, especially if your organization is being charged an hourly rate. A good marketing audit should take anywhere from one month to six months, again depending on the size of the organization and the scope of the audit.

There is no such thing as a free marketing audit. Such audits are nothing more than information gathering for the purpose of engaging in some form of marketing work. They also are not independent or objective. A well done marketing audit should have a fixed cost for the engagement and probably will cost you up front. However, it will almost always save you money as one of its tasks is to root out inefficiencies, redundancies and unnecessary marketing expenditures. Always apply both the tangible and intangible benefits of conducting a comprehensive marketing audit against the upfront costs when assessing if the price is right.

Benefits

Some of the obvious benefits of a marketing audit include:

  1. Action-oriented marketing treatment recommendations to help prioritize and focus on high-impact changes.
  2. Improved rate of return on sales, marketing and brand activities.
  3. Uncovering of unhealthy marketing symptoms and elimination of waste and marketing inefficiencies.
  4. Speaking better to your customers than your competitors.

However, some of the hidden benefits of a marketing audit are priceless and include:

  1. Providing senior management with an independent, objective view of their organization’s marketing performance.
  2. Allowing you to learn how your marketing health really stacks up through the Marketing Effectiveness Baseline Score.
  3. Enhancement of the organization’s marketing learning curve — so many organizations rank high in their industry and product learning curves… yet lag in their marketing learning curve.

Hopefully you won’t miss your next MRI scan… for both yourself and your organization. Know the news of your marketing effectiveness and ensure that marketing stays in ultimate health in today’s marketplace.

Allen Banoub is Chief Marketing Surgeon with Marketingmri, Inc.


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