The word audit has its root in the Latin audire (to hear), more precisely, in the form auditus meaning that which is heard. The audit is the first step in understanding the problems that confront a business. By Gary Neat
Five years ago, if you asked CEOs whether they had undertaken a “marketing audit” they probably would have thought you were talking about a financial audit. But, just as the financial audit is the tool for evaluating accounting practice, the marketing audit is a methodology for evaluating the strategic marketing and communications landscape.
Ours is an era in which a volatile economy produces strategic surprises almost monthly. Rivals launch new products, customers switch their business, distributors lose their effectiveness, advertising costs skyrocket, government regulations multiply and consumer groups attack. These changes demand periodic re-orientation of marketing operations.
Amid this volatility, many organisations feel that their marketing operations need regular reviews and overhauls but do not know how to do it.
A marketing audit is a comprehensive, independent examination of an organisation’s marketing and communications environment, taken with a view to determining problem areas and opportunities and recommending a plan of action to achieve optimum performance.
Far too often businesses invest time and money in marketing, advertising and public relations strategies without really knowing why. However, through the use of specialised marketing audit methodologies, a range of activities can be analysed. These include:
- Market research.
- Internet marketing.
- Strategic marketing.
- Sponsorship effectiveness.
- Public-relations expenditure.
- Creative customer service.
- Product assessment.
- Competitive advantage.
A marketing audit shares the techniques of all good research in that it concentrates on securing information as precise as possible from the most meaningful sources.
A comprehensive marketing audit will uncover credibility gaps and will establish:
- Short-term and long-term targets.
- Themes to be emphasised.
- Communication methodologies.
- Whether you have the right people.
- Acceptable evaluation methods.
Typically, audits of marketing are commissioned when response is down, morale has fallen, or other problems have occurred. However, many organisations are thrown into crisis partly because they have failed to review tactics and change them during good times. A marketing audit in the good times can often make them even better and can also indicate changes needed to prevent things from turning bad.
Before investing in marketing strategies, it is essential to complete a marketing audit to better understand yourself and your customers. Too many times we make arbitrary decisions without any solid marketing information. The results can be disastrous.
For example, can you answer the following questions?
- What business am I really in?
- Where can I expand?
- What is the perception of our service or product?
- What image should we project?
- What advantage have we over the competition? Review the competition in relation to product/service characteristics, price, promotion strategies, place, packaging and personnel.
- What benefits do we offer?
- Who are our customers?
A feature of a successful marketing audit is that it is conducted by people independent of the operation being evaluated. Self-audits, in which managers follow a checklist of questions about their own operations, lack objectivity. They are more about “puffery” than performance.
A central characteristic of a good marketing audit is that it is systematic. The effectiveness of the marketing audit will be increased if an orderly sequence of diagnostic steps is followed, as in an accounting audit.
The five most common findings of marketing audits are:
- A failure to add value.
- A tendency to view marketing as only advertising or sales.
- Poor knowledge of customer behavior and attitudes.
- A failure to segment the market.
- An organisational structure at odds with the marketing strategy.
Assembling credible marketing intelligence to create competitive advantage is a key role for businesses whose leaders have insight into their environment.
We may find that, within two years, company directors will be demanding that marketing audits be compulsory in order to anticipate change, pinpoint internal weaknesses and rationalise burgeoning marketing and communications budgets.
How not to
How not to be tactful
The following comments were issued by editors in response to the peerless journalistic prose with which they were confronted:
- This paragraph is not without merit. Without grammar, sense or logic, perhaps; but not without merit.
- Have you considered using English? It’s excellent this time of year.
- I think you have bitten off less than you can chew.
- I look forward to your becoming mono-lingual.
- As you clearly had an idea before you wrote this, may I say that I am sorry for your loss.
- Thanks for keeping your meaning a secret. People are far too indiscreet these days.
How not to run an economy
Japan’s politicians must take the prize for the best effort in snatching economic defeat from the jaws of victory in recent history. At the end of the 1980s, Japan was on top of the world, striking fear even into the heart of the United States. A decade later, Japan is a basket case, with total debt at 500% of GDP, government debt at 150% of GDP, interest rates close to zero, a largely nationalised banking system and an insurance system close to insolvency. The population is ageing and no one is prepared to spend.
And the solution from central bankers? Don’t worry, be happy! In what can only be described as a masterly exercise in Zen economic management, Japan’s leaders have spent 10 years rectifying the situation by doing nothing. This is roughly equivalent to doing nothing when you are sitting on the train tracks with an express hurtling towards you. As one economist opines: “The only way you can get the charts to look good is if you hold them upside down.”
How not to make money from new technology
The “tech wreck” in new-economy shares was not as unusual as it seems. The first radio was made by Guglielmo Marconi in 1901, leading to confident forecasts that there would soon be radio communications with the planet Mars (it was not clear who would be on the other end). Such predictions make the excesses of the dot-coms look positively restrained. The stockmarket soared to unprecedented levels, many mergers were undertaken, then came the inevitable crash in 1907. Many attributed this to a lack of demand from Martian speculators.
How not to prototype an aeroplane
The prize for best failure to launch an aeroplane must go to the Italian designer Count Caproni and his Ca 90, which rose to unsustainable heights in 1921. Constructed like an immense houseboat with nine multi-layered wings and eight engines, it would not have been out of place in the Spanish Armada. The test pilot took off with a load equal to 60 passengers. The nose dipped briefly, the ballast slipped to the front, and the craft did a plausible impression of a dot-com share price.
The Slithershanks File
Slithershanks loves a decent negative, because it goes so nicely with his personality. So, he was delighted to read in The X10 Memeplex by Michael Hewitt-Gleeson, about the “uncheck”. Opinions vary as to the origin of this delicious little term, but the majority view is that it came from Transylvania, to describe payments by the undead (i.e., “Your uncheck is in the mail”).
Hewitt-Gleeson says: “If I were asked what I felt was the most productive move in business, I would say, To escape from uncheck. How long does it take to escape from uncheck? It takes about one second.
“Voicemail? It takes one second to pick up the phone.”
“E-mail/post-mail? It takes one second to press send on an e-mail or to drop a postcard in a mailbox.”
“Meet-mail? It takes one second to say help to another person.”
“Yes, I know there is more time involved in all these activities but right now I’m just focusing on the instant of escape from uncheck to check and that instant only takes a second.”
Fortunately, the time taken to put this book down is approximately 0.01 seconds. But, Hewitt-Gleeson is keen to inform us further: “Suppose we look at each escape instant as a business window opportunity. If it only takes a second to escape from uncheck, then how many of these escape seconds, these windows, are there every day? The answer is 84,000!”
Which leaves 8,400,000 opportunities to put this book down.