What is a Marketing Audit?
A marketing audit is a systematic examination of the way a business is being marketed. Marketing audits will show business owners and marketing staff where marketing efforts are successful, a marketing audit may also show the failures so the necessary changes can be made for your business to thrive.
Businesses are like living, breathing entities, and their marketing is that air they breathe. In order to keep your marketing in tip-top shape, there is a high volume of preparation and planning involved called a marketing plan. Before writing a marketing plan, one must address the business’s strengths and weaknesses. And, in order to determine your current marketing state, one must complete a marketing audit.
Though it may sound intimidating, marketing audits are good for your business. In this post, we will break down exactly what a marketing audit is, why marketing audits are important, and how your audit can be carried out.
A marketing audit is a review of a business’s marketing environment, typically conducted by a third party, such as a marketing agency. The marketing audit will systematically analyze, as well as evaluate and interpret both the internal and external marketing environment; its goals, and the means by which the business will reach these goals.
A marketing audit will look at what your business wants out of its marketing strategy, and determine how best to get there. An audit is typically a prerequisite to a marketing strategy or when a problem arises that makes a change to the marketing plan necessary.
Guidelines for a marketing audit
- A marketing audit is comprehensive. The audit should cover all the areas of marketing.
- The audit should be systematic. It should be organized, and encompass all strategies and operations that influence marketing performance.
- The audit should be independent. Though there are multiple types of audits, the best type of audit is the outsider audit. In this case, a third party would perform the marketing audit.
- The audit should be periodical. Don’t wait until a problem arises to complete a marketing audit. Most problems can be avoided with regular marketing audits.
Does My Business Need a Marketing Audit?
Even if you already have a marketing strategy in place, marketing audits are still extremely useful. They can benefit the business in multiple ways, including but not limited to:
- Providing management with an in-depth look at the business’s marketing strategy and performance, with particular focus on how to plan, implement and manage marketing activities.
- Pinpointing marketing efforts and practices that are thriving and successful, as well as those that are less so. Think of your business as a rose garden: it needs some occasional pruning in order to stay healthy. With a marketing audit, you can determine which parts of your marketing strategy are yielding fruit, and which are not.
- Don’t know where to start with a marketing plan? That’s easy. Trust your audit. Its systematic and structured approach will never let you down when it comes to your marketing plan.
- If you perform regular audits, you can catch mistakes and errors before they cause any irrevocable damage to your company’s reputation, or to your bottom line.
Ultimately, a marketing audit can help inform the most crucial decisions about marketing the upper management of your business will ever make.
Types of Marketing Audits
When we say marketing audit, that’s something of an umbrella term. Businesses typically examine three major components during a marketing audit: the external environment, the internal environment, and the current marketing strategy. Within these three categories, seven identified types of marketing audits exist.
- Macro-environment audit. This type of audit examines the external factors that might affect the marketing performance of the company, such as demographic factors, economic factors, cultural factors, environmental factors, and political factors. For the most part, these are factors that influence the consumer market: their beliefs, hobbies, or any social trends that could affect the company’s marketing performance.
- Task environment audit. This type of audit also focuses on factors outside of the company, but still closely associated with marketing activities and operations. While it does take some factors of the consumer market into account, it is slightly different than a macro-environment audit. A task environment audit will assess the size of the industry the company belongs to, identify competitors, and examine the company’s relationship with distributors and retailers.
- Marketing organization audit. This audit is performed by evaluating the staff or the labor force of the company at their various levels of hierarchy.
- Marketing function audit. This type of audit will evaluate the core competencies of the company. It will examine the company’s product, pricing, distribution, marketing communication, and the sales force. It will also compare price points for the company’s product with those of the competition.
- Marketing systems audit. This type of audit will look at the marketing systems currently in use, such as the marketing information system, marketing control system, and even a new product development system.
- Marketing strategy audit. This type of audit will revisit the company’s mission and vision, and its goals and objectives. It will determine if the current marketing strategies being adopted are proper and appropriate with respect to the resources of the company.
- Marketing productivity audit. This is where the auditors will look at the effectiveness of the marketing strategies currently in use. The most common things they will look at are cost-effectiveness and profitability.
How Do I Perform a Marketing Audit?
Each audit will be unique to the company it is performed on. After all, companies have different goals, products, and industries that will affect their reasons for conducting a marketing audit in the first place.
However, the performance of each marketing audit can be broken down into three phases or stages.
Stage 1: Pre-Audit
In this phase, the company will first determine who will perform the audit. Companies here have two options: self-audit, and outside audit.
In a self-audit, the audit is performed by employees of the company chosen by management. The marketing team can perform the marketing audit, unless management believes this will create issues with objectivity. In this case, an outside department may complete the audit.
A self-audit can also be performed by high-level executives or management, or, in the case of much larger companies, an organization may have a dedicated audit department.
With an outside audit, the company will hire the services of an outside auditor. This is obviously a more reliable means of running an audit, as the outside auditor is guaranteed to be objective. The auditor could be an independent practitioner or a company that specializes in marketing audits.
The second part of Phase 1 is the timing of the marketing audit. Essentially, when will the audit start, and how often will it be performed?
For your business to reap the benefits of a the audit, it must be performed regularly or periodically. Markets change frequently, which necessitates that marketing strategies change just as frequently. In order to make effective changes rather than blind ones, audits must be performed regularly.
The third objective of Phase 1 is to establish the scope and objectives of the marketing audit. This is essential to properly guide and direct the audit team. Ensuring that everyone involved understands the objective of the audit will ensure that every member of the team is on the same page.
It is also important to identify every stakeholder in the audit, whether direct or indirect.
The final part of Phase 1 is to determine the methodology of the audit. This is where the exact method by which the auditing team will proceed is decided.
Stage 2: Audit Proper
This is the phase where the magic happens, so to speak. This phrase looks vastly different, depending on the type of audit, methodology and goals of the company. However, we can break audit proper down into three basic steps.
Audit Proper: Step 1
The first step is data gathering and collection. This will be the most tedious and time-consuming part of the audit.
The watchword of data gathering is research, research, research. Research sources include any established source of marketing data, such as industry publications.
During this phase, the auditors will also look at the historical internal records of the company. The auditors may give surveys or questionnaires to chosen respondents, may conduct interviews of marketing team, and may also require walk-throughs of the marketing process.
This data collected will pertain to the three environments: the external environment, the internal environment, and the existing or current marketing strategy. In this stage of the marketing audit, no conclusions will be drawn from the data; this is all about the collection of raw information, and organizing it for analysis.
Audit Proper: Step 2
The second step, obviously, is the analysis of the data. The data collected in the last stage will allow the auditing team to build a complete picture of the marketing program. There are many tools the auditing team can use to evaluate and analyze the data, such as:
- SWOT (strengths, weaknesses, opportunities, threats) analysis
- PEST (political, environmental, socio-cultural, and technological) analysis
- Five forces analysis, which will examine competitors, threat of new players in the game, customer power, supplier power, and the threat of substitute products.
Audit Proper: Step 3
The third step to the audit is the preparation of recommendations. The audit team prepares a marketing audit report. Based on the results of the analysis of the data, the marketing team will make recommendations as to any changes that need to be made. The auditor usually places the recommendations in a prioritized list for easier comprehension.
Stage 3: Post-Audit
The auditor submits the marketing audit report to management. Then management will more than likely disseminates to other departments in the company.
Sometimes, recommendations in the audit report will not be accepted blindly or easily by management, especially if the audit was performed by an outside auditor. The audit report and the recommendations therein will likely undergo lengthy discussion until all parties are comfortable making marketing decisions.
Conclusion: Marketing Audits
Businesses aren’t like windup toys: you can’t just set them up and let the chips fall where they may. Not if you want to be successful, anyway. Businesses require huge amounts of care and attention to prosper, and regular marketing audits are a great way to keep the blood flowing.