You might wonder why it is crucial to conduct a marketing audit. If your business is doing great and has plenty of ROI, is an audit necessary?
Well, a marketing audit is more important than you may think. As you’ll find out more in this article, doing a marketing audit can open up new opportunities and hidden problems that you didn’t know existed at first.
Curious enough about how to audit a marketing department? This article will go in-depth to explain what a marketing audit is, why it’s essential, and how to conduct it.
We’ll also talk about the vital components of a successful marketing audit, and who may be qualified to conduct one on your business.
Let’s get started.
What Is a Marketing Audit?
A marketing audit is a systematic analysis of a company’s marketing goals, strategies, and results. Essentially, you evaluate your marketing performance, which includes the objectives, processes, tactics, activities, and propositions that comprise your marketing campaigns.
A marketing audit can help to gain new insights and likely identify problems and opportunities. You can then use that to formulate a new marketing strategy that solves the issues and takes advantage of the possibilities.
An effective marketing audit will have the following characteristics:
- Recurring – The marketing environment is always changing. By regularly conducting marketing audits you lessen the risk of your existing marketing strategies becoming irrelevant and ineffective.
- Unbiased and honest – Auditors should place their focus on solving problems and helping the company. They should always present the audit results with full transparency and conduct them fairly across all marketing divisions.
- Actionable – The recommendations from the marketing audit should be realistic and suggest a clear action plan.
Why Is a Marketing Audit Important?
While doing audits takes time, a marketing audit provides quite a few critical benefits for your company. Let’s take a look at what those benefits are.
1. It Reminds You of the Campaign Goals You’ve Set
Your campaign goals will most likely change along the way. By auditing your marketing strategy, you can look back at the planning and development stages of the campaign. This way, you get reacquainted with the purpose of your campaign and the measures you’ve set in place.
2. Find Out What’s Working and What’s Not
Here you essentially figure out your return on investment (ROI). Are your marketing efforts contributing to getting better ROI or not?
A marketing audit gives you the chance to take a step back to look at what you’ve done and whether it’s positively or negatively impacting your business. By figuring this out, you can refocus your budgeting to the strategies that worked and create new ones to replace the strategies that didn’t work.
3. Get an In-Depth Understanding of Your Competition
This isn’t the main reason why a marketing audit is conducted since an audit goes deep to explore everything influencing your marketing activities and campaigns. However, it may help you discover additional information about your competitors’ strengths and weaknesses.
4. Tests Your Potential Marketing Partner
If you decide to have a third-party audit agency conduct the marketing audit for you, this is an excellent opportunity to see whether you can trust them to be your marketing partner in the long run.
If they prove to be organized, professional, and provide specific audit reports and recommendations for your business, you can trust them to do the same for your other upcoming and current marketing audits.
Step-by-Step Guide To Conducting a Marketing Audit
There is no one way to do marketing audits. Businesses and agencies have their preferred go-to, foolproof ways. They might have different priorities, goals, and structures, which means they conduct a marketing audit for reasons they specified themselves.
Even so, the general approach to conducting a marketing audit is roughly the same. It consists of three main phases.
Phase 1: Pre-Audit
This stage involves all of the preparation needed before a marketing audit can be conducted successfully.
1. Determine Who Will Conduct the Audit
A company has two options regarding who should do the audit:
- Outside audit
With self-audit, the company’s management team creates a marketing audit team which consists of the employees. The head of the marketing department usually evaluates their department and measures the effectiveness of the marketing strategy and its results.
Though the management worries that the head of the marketing department would be biased when it comes to the audits, they can also assign other employees from different departments to assist.
Some large businesses would set up their independent auditing department tasked specifically to perform audits, which includes marketing audits too.
When it comes to an outside audit, the business hires an outside auditor to conduct the marketing audit. This is seen as the more viable option because the findings are more likely to be objective and independent.
2. Establish The Timeline of the Audit
Here, you should determine how often you will conduct the audit and when it will start. A marketing audit should be performed regularly, ideally at least twice every year.
You should take into account the ever-changing state of the market, as the changes can affect your existing marketing programs. Companies will need to adapt and tweak their marketing strategy from time to time to avoid becoming irrelevant and outdated.
3. Describe Your Market Goals and Objectives
Make the objectives and goals of the marketing campaigns and strategies clear. Everyone in the company should easily understand them, especially those who will be doing the marketing audit.
Your marketing objectives and goals should be comprehensive, SMART, and align with the overall business objectives and goals. Here are some examples of a good marketing plan:
- Increase or maintain the market share
- Improve the company visibility
- Create qualified sales leads
- Increase target audience size by improving the click-through rate, conversion rates, and user experience
Phase 2: Audit Properly
This stage is where the marketing audit takes place. Depending on the pre-audit results, there might be a slight difference in additional methods. But the essential main stages of a marketing audit consist of these steps.
1. Conducting Research, Data Gathering, and Collection
This is the most time-consuming part of the whole process, as you’ll need to gather a lot of data for the audit to be effective.
One of the most commonly used methods to gather data is by conducting research. Both internal and external, as well as qualitative and quantitative, research is necessary. The internal historical record of previous marketing campaigns can serve as a primary source of the audit.
Business and marketing records like the business, marketing, and training plans, as well as the marketing budget, can be used as a reference point when conducting the audit to find out how well the current campaign and strategies are performing.
Conducting qualitative business research through surveys, questionnaires, one-on-one chats, and focus group interviews with the marketing team and customers can be another great way to gather data.
You can also use a small business CRM software to gather and manage your sales, projects, clients, and marketing data.
2. Analyze the Data Gathered
This is the most crucial part of the process. Here, the marketing audit team will do a complete picture analysis, usually incorporating the marketing mix. To do that, they’ll have to use a few tools.
A SWOT analysis takes a look at two components of the audit process. The internal origin, which is a company’s strengths and weaknesses, and the external origin, which is opportunities and threats.
This tool focuses on analyzing the external factors that can affect your marketing efforts. It focuses on the competitive perspective of the audit process. The five forces are:
- Industry Rivalry – Analyzes every aspect of your competition. How many direct competitors are there? What do they offer that your company doesn’t?
- Threats of New Entrants – Sees whether the industry has a low or high barrier to entry.
- Bargaining Power of Buyers – What motivates customers to purchase? How high or low are the chances of customers switching to buying from your competition?
- Bargaining Power of Suppliers – How is the relationship between your company and your suppliers?
- Threats of Substitutes – Can customers find a substitute product or service that acts as a replacement to the ones you offer?
This stands for Political, Environmental, Social-cultural, and Technological. Hence this focuses on analyzing the macro-environment. Here are some examples of how this tool plays a part in the marketing audit:
- Pays attention to the economic policy of the government and analyzes how it affects the market.
- Looks at the political stability of the country.
- Inputs the influence of government laws and policies on business and tax regulation.
- Measures inflation levels, general interests, and exchange rates.
- Adds the effect of language, religion, gender in terms of consumerism.
- Bears in mind the impact of technology in marketing.
After conducting the three in-depths analyzes, this audit strategy should be able to provide the insights in:
- How well aligned are the current marketing objectives with the goals of the company.
- The overall performance of the current marketing campaign and strategy of the organization.
- The marketing team’s ability, competencies, knowledge, as well as their collective and individual performances.
- How well executed and communicated the current marketing campaigns and strategies are.
3. Come Up With Recommendations
At this point, the entire marketing audit process’s final output is documented and formed into a marketing audit report. All of the types of audit, including marketing productivity audit, task environment audit, marketing function audit, and marketing systems audit are all included in the report.
When creating the report, the client will specifically focus more on the recommendations section. Hence you should make it as simple as possible to know which are the priority recommendations to implement.
Make sure that the recommendations are solely based on the data collected and your collective knowledge. The suggestions should also be in line with company goals.
Provide suggestions that can ensure both short term and long-term success of the company. Give a prioritized list of recommendations and next steps.
Phase 3: Post-Audit
Once the marketing audit report is finished, it needs to be presented to the management, who will then use it in their decision-making process for their next marketing campaign and strategies.
The report might also be distributed to other departments if they’re directly or indirectly involved with the marketing activities.
These recommendations will not immediately be implemented but will be subjected to a lengthy discussion in the management team until everyone is satisfied with the marketing strategies and campaign decisions they are about to make.
What Are the Components of a Successful Marketing Audit?
While different marketing audit agencies will have different approaches to conducting an audit, most will follow the same principles:
- Comprehensive – The audit should cover all aspects of marketing, not just areas where problems were identified beforehand. Conducting a holistic audit can uncover hidden opportunities and strengths.
- Systematic – To make sure that the audit doesn’t miss any gaps, you’ll need to systematically do it by taking into account every principle, strategy, and campaign in your company.
- Periodical – It’s best practice to conduct periodic marketing audits to allow your marketing team to discover problems at earlier stages and solve them immediately. Prevention is better than fixing.
A marketing audit can be split into different types. Some agencies will focus on a more specific marketing strategy, and some will focus on the overall marketing campaign. Here are the three most common components a marketing audit will include:
- Marketing strategy audit – This examines how feasible your current overall business goals and objectives are. Here, you’ll determine whether the goals align with the marketing strategy.
- Microenvironment audit – This measures every internal aspect of the marketing action plan your business came up with. Things like employee engagement and communication tools are measured here.
- Macro environment audit – This examines every outside factor of your business that can impact marketing performance. Things like the country’s political condition, the demographic data of your target market, and the cultural aspect.
Audit agencies who tend to dive deeper into each marketing strategy and the campaign will usually add more elements to their template. Here are some of the standard features they’d add to get a more detailed analysis:
- Marketing Functions – This takes a more in-depth look at your company’s marketing abilities by measuring how effective the communication channels and salesforce are.
- Marketing Environment – This takes a closer look at your organization’s position in the marketplace and compares it to your competitors, which includes a competitive analysis.
- Marketing Organization – This gets a more in-depth look at how the marketing staff performs and see whether your company policies support the team’s outcomes.
Who Conducts A Marketing Audit?
Since we already mentioned who can conduct a marketing audit, we’ll focus on providing the pros and cons of each option.
The internal will have the most comfortable access to all the information they’ll need to conduct the marketing audit. They’re also familiar with the marketing activities and know the progress of reaching the marketing goals.
The internal team knows the inner workings of your business and the resources you can provide.
The team will usually consist of members from the marketing and finance departments. Thus you’ll get the knowledge covering various metrics.
The internal team might not have the specific skills to conduct an audit, and they might struggle to manage the time between their jobs and the marketing audit. Another downside is that creating an unbiased report might be difficult as they feel responsible for the result.
Your Business Auditing Agency
A special team of marketing auditors also has access to all the information they need from your organization. Your organization’s audit agency will have the necessary knowledge and resources to conduct an audit, same as the internal team.
Since they belong to the same company, creating an unbiased report might be difficult because they might unintentionally shift the report’s interpretation to a more positive tone.
The Third-Party Audit Agency
A third-party agency solves all the cons from both previous options. They will create reports that have no bias and present the data as it is.
Because the third-party agency is always creating more job opportunities for themselves, they might present the audit report to look worse than it actually is to offer their services to help fix the issues.
Carefully choose a third-party audit agency to conduct the marketing audit for you. Look at the reviews and testimonials from their previous clients to ensure they do their job honestly.
All of the Above
This is a bonus. An organization can use all of the above options to conduct a marketing audit. Usually, the company will gather for a one-day session where each team’s representatives present their findings. This gives you the advantage of getting internal and specialized knowledge and an outside perspective at the same time.
A marketing audit is a systematic analysis of a company’s marketing goals, strategies, and results. By doing a marketing audit, you’ll gain new insights and identify any problems or opportunities. Through that, you can formulate a new strategy that solves the issues and takes advantage of the opportunities.
To conduct a marketing audit, there are three general phases your organization will go through:
- Phase 1: Pre-Audit – The necessary preparations to start the audit.
- Phase 2: Audit Properly – Data gathering and research to formulate the marketing audit report.
- Phase 3: Post-Audit – Present the report to the management.
A marketing audit has various essential components. Each differs depending on how in-depth your audit is.
All that’s left for you now is to start conducting your marketing research. Remember that there are three options for running the audit, each having its pros and cons. Take your time to make sure who you want to conduct your organization audit.