Far too many, both large and small, B2C or B2B businesses of all descriptions, still view “marketing” primarily as selling.

The performance marketing industry may as well be the culprit as most of the performance marketers think of generating leads, improving conversion rate, or upselling customers on the checkout page or on the phone.

Yet this is but a small fragment of the full, or general, marketing function.

Some managers, marketing academics, and business experts and consultants have coined new buzzwords to describe the current marketing world. Descriptions like customer-focused, relationship marketing, integrated marketing, omni-channel marketing, content marketing, human-to-human marketing are but a few more popular ones.

They sound good, but none of them reflect the correct organizational structure, or the action, required to accurately accomplish this verbiage. Impressive as these buzzwords sound, they are meaningless without company framework and subsequent action that will make these “feeling good” definitions a reality.

Marketers, including performance marketers, are running so fast, they rarely take time to ask themselves basic questions:

• “What do we really sell?”
• “What is our singular best advantage over our competitors?”
• “What would 10 percent of our customers really say about us?”

This is the stuff of strategic planning, and it begins with a complete marketing audit.

Performance marketers may smirk when they see corporate-world marketing managers stamp their approval on company plans. It is not slogans or key visuals they are approving. They are building consensus on marketing strategy, marketing tactics, and mission, too.

Just a Small Rant: Performance Marketers in Need of Strategic Skills

Many smartest performance marketers misuse and underuse marketing because they do not do formal audits of their marketplace assumptions. Most performance marketers walk down the sidewalks of Enterprise Lane, stepping in all the puddles (called A/B tests, of course!), and wondering why their shoes are wet.

Had they planned their walk by revisiting all their assumptions about the neighborhood, and arrived at consensus about their destination, they would not have wet feet.

The Strategic Marketing Audit presented here is not sophisticated or theoretical.

Nor is it pedantic, lacking hands-on experience. You do not need to be a PhD or rocket scientist to easily use my common sense, business-tested audit to accurately assess all elements of your marketing environment, both internal and external, as the first critical step for building a solid foundation for your complete strategic marketing plan.

From extensive and varied business experience I have learned that management decisions are usually better resolved if they are studied by informed problem solvers who performance marketers most often are!

This guide will help you, the performance marketer, to better examine your marketing environment, both external and internal, before you embark on a full-scale marketing venture, far more complex than the performance marketing one you are accustomed to.

All your key personnel, not just the CEO or the marketing group, can come together and analytically evaluate strengths and weaknesses in their marketing situation – emphasizing strengths and minimizing weaknesses – just as a coach readies his team for the competition.

A successful marketing program starts with a complete, factual examination – the audit – of where you have been, where you want to go, and what you must do to get there.

Done hastily or carelessly, the foundation for your marketing house will collapse, unable to withstand the fast-changing climate and the competitive winds it will encounter, no matter how great your conversion rate optimization, upsell, or traffic source ideas would be!

If we could first know where we are, and whither we are tending, we could better judge what to do, and how to do it.

— Abraham Lincoln

Serious performance marketers can implement Lincoln’s words by asking some basic questions to be answered in the audit process. Those questions are as follows:

• Where are we?
• Where do we want to go?
• Can we get there?
• What must we do to get there?

Assessment, or self-examination, helps you get where you want to go. This is the basis of sound decision-making, which requires moving critical resources in the right direction. Doing this necessitates an audit: A complete, annual physical exam of all marketing activities to pinpoint opportunities for better action-taking decisions.

Like a physician’s diagnosis, plans for achieving marketing objectives will result from thorough self-appraisal. Sound marketing decisions usually are simple when they come from informed planners.

But even when a conscientious attempt is made to see a situation objectively, the focus can be blurred by tradition, unquestioned procedures, personalities, manipulated programs, corporate politics, indifference, or laziness.

Too often, the picture is faulty because key facts are missing, guesses are not reliable, or some critical elements of the picture are ignored or overlooked.

Or when the patient is strongly biased against anything, just anything, sounding contrary to his or her philosophies – yes, yes, I am talking to all of us, performance marketing / direct response / direct marketing junkies!

Herein lies the value of the strategic marketing audit. Its purpose is to generate areas of discussion that identify deficiencies for correction and strengths for exploitation outside the usual performance marketing areas.

Many performance marketers make the common mistake of limiting their options. They do not stand back and objectively look at what they are accomplishing, what their competition is doing, and what their customers want. They are frequently under pressure not to rock the boat.

Performance marketing myopia and atrophy blinds participants to plan “the way it is always done” (e.g., “if it cannot be A/B tested I am not touching it!”). Following a precedent is an easy substitute for thinking. Conversely, careful examination of all marketing components serves to provide action instead of denial.

A thorough and complete strategic marketing audit will provide insight into performance, pointing to strengths and weaknesses to be addressed in general marketing planning.

Audits are also crucial to the marketing function in organizations where managerial perceptions often differ from reality. For these reasons, an increasing number of companies and other organizations are regularly conducting audits in their effort to keep pace with rapidly changing marketing conditions.

Thus, unless marketing plans are built on a sound FACT BASE, the finished product will be faulty and subject to failure. That means shortcuts should never be taken in this critical, first planning step. If facts are not readily available, every effort must be made to get them. Out of expedience, “guesstimates” assumptions, or carelessness are unacceptable.

Evaluate your company’s marketing performance using this point system: Excellent 4, Good 3, Fair 2, Poor 1. Then tally total score for an overall report card of performance: Above 345, Excellent; 265- 344, Good; 120-264, Fair; Below 120, Poor. Score a ”4″ on any question wherein your business does not apply and tally total points for your performance appraisal.

Corporate Marketing Culture Audit – Proactive, Customer-Focused Commitment

Studying the marketing environment starts with commitment from the top down. To be marketing-driven and customer-focused requires much more than lip service, especially from the chief executive.

The CEO must be the driving force, instilling and implementing marketing plans that consider every aspect of the marketing environment – the catalyst for all other plans – finance, personnel, engineering, inventory, production, etc. In short, positioning the marketing plan as the engine of the train, not the caboose!

1. Does the CEO believe in marketing planning as the basis and forerunner of all other business planning, including a business plan? Is a marketing plan used to prepare the other plans?
2. Is a formal planning process ingrained with all managers (including non-marketing staff) in the business? Do they manifest a positive, proactive mindset? Are they involved in the marketing planning process, rather than restricting participation to your marketing group?
3. If a written marketing plan exists, is performance regularly measured against it? Are changes made for necessary adjustments during its progress?
4. Are marketing plans prepared with full participation of all functional managers, or are they dictated primarily by the CEO or a few key staff?
5. Is current technology being used to build a CRM / marketing database, and do managers understand its capabilities?
6. Are all marketing functions under the direction of one marketing head who reports to the CEO? Are they integrated into one centralized department and not fragmented? Is your marketing head comparable to that of a captain for a soccer team, a first-level decision maker?
7. Is marketing planning started well ahead of your plan-year’s start date to prevent hurried results and to avoid interference with daily work routines? Are schedules (with deadlines) set to prevent last-minute, hurried, or incomplete plans?
8. Do marketing plans include all components of your marketing activity, or are they mainly sales projections and broad market objectives lacking specifics and datelines for completion?

Successful businesses, whether B2C or B2B, do not evolve without demanding work and good marketing planning, implementation, and control. Those lacking thoroughness and formality in their planning are courting eventual disaster.

Chances are good that if you cannot plan in writing, it really is not a particularly good plan. Countless examples in corporate graveyards will attest to this fate.

Granted, formal planning does not ensure successful performance, but it does provide disciplined appraisal, goal setting, and action steps to maximize your chances for success. Even in the ever-changing environment, written plans will help you determine the best application of your resources for their most profitable use. They are an organized thought process, a communication system.

Sad to say, even in this age of enlightenment, the vast majority of businesses just do not get it! Only a minority have complete, written marketing plans that are implemented reasonably well. Obstacles can usually be traced directly to attitude and action of the CEO.

Many CEOs lack marketing orientation and hands-on experience. Too often, they view marketing only as a “selling” function. Surveys show that fewer than 25 percent of all CEOs career backgrounds include hands-on marketing experience.

This is one of the main reasons why most traditional business plans do not lead with a complete marketing plan preceding the rest of their plans. In these cases, marketing is not the engine pulling the train. Plainly stated, these business plans are not customer-focused or marketing-integrated.

If you are seriously interested in starting formal marketing planning for your own situations you will find helpful planning assistance here. These include the following:

• Benefits of marketing planning
• Marketing planning pitfalls
• Calendar for marketing planning
• Criteria for a good marketing plan, and
• Guidelines for making people more agreeable to change.

In short though, marketing plans are not mandates. They are direction. They do not determine the future, but they are commitments to mobilize the resources and energies of the business to create the future.

Too often, marketing plans are shortchanged with inadequate preparation time and disregard for their implementation or control and adjustment after they are set in motion.

Remember, if done methodically, it is a time-consuming process. If this represents a deterrent, consider the alternatives. Chance and chaos are not a prescription for survival and growth. Nor are they a sign of control and purpose in the management of the business. Conversely, rewards make the task a worthwhile investment.

Products and Services Audit – Vehicle for Existence

The success of any marketing program starts with a thorough knowledge of the product or service offered. Their true value to users. You must gather and evaluate critical information because it is essential to clearly understand current offerings before you make decisions for future marketing activity. Objectively gather information for evaluation, cooperation, and participation from all other areas of the company, not just the marketing department! These are some questions to use for examination:

9. What are the user benefits of your product and service? Are they recognized, and effectively exploited?
10. What is their life cycle stage? (Introduction, growth, maturity, saturation, decline). Is a continuous program used to weed out unprofitable products or services? Should you add new ones? Rejuvenate or reposition others? Can products be modified to reach other markets?
11. Are product/services profiles developed? Are they user-focused?
    Designed for needs of the user? Do they exploit your key competencies?
12. Are inexpensive methods used to estimate new product/service potentials before considerable amounts are spent on development or market introductions?
13. Is it customary to first launch new products/services with A/B tests, field tests, forecasts, and pricing before funds are spent on advertising, promotion, and distribution systems? Are lean startup, jobs-to-be-done and similar methodologies in use? Are these costs calculated and included in marketing plan budgets?
14. What percentage of sales/profits came from new products/services in the last three years? Are returns on invested capital for new products/services compared with actual outlays? And forecasts?
15. Is new product/services activity characterized as innovative, or is it generally a cosmetic refinement of existing products or services?
16. Have trends in new consumer behavior, technology, and government regulations been studied each plan year? Are they included in planning assumptions?
17. Do you have a “positioning” advantage in your marketplace? Is it emphasized in marketing strategy?
18. Are products/services offered in their most appealing and cost-effective way for the markets being served? Are logos and corporate signage used on all products and collaterals?

The ultimate goal for any new product or service is to be able to anticipate needs of the marketplace. To be proactive, rather than reactive, requires perception of customers’ needs, whether they are expressed or latent. You should pay more attention to what would-be users do, not just to what they say (that is the philosophy of most performance marketers, fortunately). The more informed you are about the customer, the greater your opportunity.

At the same time, it is important for you to know what you are best at doing. You must stick to your knitting and be ready to exploit your core skills and resources.

Few companies manage to attain the anticipatory level because their stockholders and leadership are driven to produce short-term profits without incurring additional costs for expensive research and development.

They are not willing to risk investment in something that has not been specifically requested. It is always easier to be reactive – to follow rather than lead.

Successful anticipatory marketing requisites include the following:

• Understanding customers’ needs from the customers’ perception.
• Staying close and alert… listening to would-be users.
• Making a continuing investment in innovative research.
• Willingness to develop products or services that have not been requested.
• Matching new products and services with the right distribution channels, and,
• Supporting introductions with adequate advertising and promotion.

The Customer Audit – Reason for Existence

You must conduct market research for something that is not in the market. If you want to define a potential market for something new you have to ask if there is a need for what the product or service will do. Customers define markets. Their demographic (population mix) and psychographic (buying motivation) characteristics must be identified to effectively reach them. You must determine user profile and satisfaction levels to respond to needs and wants.

Some important questions include the following:

19. Does everyone from top to bottom regard customers as the most important part of your business? Does everyone know why customers in your markets should do business with you? Why is it beneficial for them? Do they know what user benefits you offer?
20. How is customer feedback gathered? Is it focused on what they are really saying? Are they systematically surveyed (at least annually) using direct contact methods that factually collect information about their level of satisfaction and needs?
21. Does your business respond quickly to orders and service requirements? Is strategy structured to supply information about order status, service inquiries, pricing, and inventory on a timely basis? Is everyone service minded?
22. Do you know who are your major customers and what percent of sales/profits do they really contribute? Is their retention rate acceptable? Do you really know why they leave? Is more effort spent to keep customers than is spent to replace them?
23. Is there a CRM and marketing automation-based program in place? Is it managed with live transmission of orders, inventory, service, and marketing information?
24. Are account profiles maintained in your CRM database? Can they be readily accessed for history, profitability, personnel status, locations, inventory, and other necessary information?
25. Do all employees, the entire business, know what customer service means in terms of their responsibility and contribution to profits? Is good service viewed as value added?

Our information age places profound emphasis on the customer as paramount to success. Prominent, rapid, creative, and personalized service – it is the ultimate strategic imperative. Management guru Peter Drucker summarized this concept when he wrote:

There is only one valid definition of business purpose: To create a customer.

Businesses surviving in the fast-paced, competitive, and ever-changing environment are those which can adapt and innovate according to customers” needs, not sellers’ dictates. Size could not save the dinosaur. Extinction is inevitable when companies do not change their marketing strategies in the face of losing customers and falling profits. What worked in the past can become a trap. Inflexibility and contentment results in marketing inertia.

You are likely greatly concerned about improving customer service, but this effort must start with the idea that any business or organization is only as good as its people.

If people producing or selling products or services are not sold, customers will not be either. Accountants are an essential part of financial services, teachers a crucial part of educational services, ticket agents and stewards present an image of airlines’ services, and office receptionists convey tone and attitude of their company.

In reality, customers buy the people when the buy their products or services. If employees do not meet customers’ expectations, then neither does the product or service they are representing.

Dissatisfactions of customers indicate where to look for business potential. Converting them from problems into opportunities brings extraordinary gains.

Are you really interested in your customer? Test customer rapport with these statements:

• I am always friendly, helpful and concerned.
• I never judge a customer by their appearance.
• I never interrupt a customer. I let them finish their entire thought.
• I always concentrate on what the customer is saying.
• I always look the customer in the eye.

If you are completely honest, the chances are that you cannot answer all these statements with a “yes”.
Growing a business and keeping more customers is a basic tenet for success. Far beyond the rhetoric of being customer-oriented, successful firms have reduced customer satisfaction to a practice.

Companies grow when they put customers first, and maintain constant, quality communication with them. Loyal customers keep coming back. Operating costs go down when marketers do not have to spend disproportionate time and effort finding new prospects to replace lost customers.

Employee retention improves as pride in serving customers increases. It is axiomatic that satisfied workers encourage people to buy more. Astute marketers target customers carefully, nurture their relationships, and treat employees the way they want them to treat customers.

On the other hand, make sure you measure the customer service performance and its contribution to profits because everyone knows how to provide excellent customer service but only some know how not to lose money doing it.

Too often, market research is confined to existing customers, focused on improving their satisfaction, rather than to all users in a market. Most companies do not pay enough attention to those who are not buying from them.

Should-be customers are a critical group to watch because their wants can be exploited as opportunities.

Major trends in buying power, buying behavior, and customer needs can be determined by analyzing what is taking place in population dynamics and structure.

Work-from-home preference, education and income level changes, concern for personal safety, employment opportunities, energy conservation, waste recycling, use of leisure time, personal values, inflation – all are social and economic factors requiring careful assessment.

Trends toward conservative or liberal lifestyles can create opportunities or present problems.

Markets and Marketing Channels Audit – Sales Targets and Selling Paths

After you profile the customers, both existing and potential, it becomes necessary that you assess the most appropriate segments of your total market universe and the selling systems to reach them. This examination reveals strengths and weaknesses in you customer database and will also reveal which segments you should target. The following questions will stimulate evaluation.

26. Has the market’s size and company’s share been reliably determined? Are these estimates or facts?
27. How is your market universe shaped? Have all segments been identified and measured?
28. Which markets are growing, and which ones are declining? How are you reacting to these changes? Have you abandoned some and entered others in recent years? Is there on-going research and surveillance to monitor them? Are current (or anticipated) product/services and marketing trends likely to affect us?
29. Has the company’s vision broadened? Do you explore and evaluate new markets? Do they require product/service differentiation or different marketing and distribution systems?
30. Are global opportunities being pursued? If not, why not?
31. What percent of total sales/profits come from new markets entered in the last several years? Is it acceptable?

Estimates of market size are crucial to determine if there is sufficient potential to justify a viable avenue of opportunity. Relying on subjective judgments without a factual base of information is dangerous ground.

For example, entrepreneurs, usually sparked with great enthusiasm and vision of success, often fail because they have not spent enough time studying the market(s) for their product or service.

Conversely, their market assessment may be accurate, but the channels of distribution may be ineffective and unprofitable. They may be using a shotgun, spraying pellets over a wide area of coverage in hopes of scoring some hits when a rifle is needed to zero-in on more appropriate targets.

Sales History Audit – Previous Marketing Results

Records for the past 12 months or more reveal trends, spot problems, and highlight opportunities. You have to make conscientious effort to analyze (and use) meaningful information from this history, determined by answering the following:

32. Are sources of sales from market segments and their customers qualified and quantified according to size and profitability? Do you know which ones have potential for growth?
33. Are sales growth and profit compared and analyzed with previous plans and records? Is this information available by market, territory, and customer in your database?
34. Do sales and profit history show how sales break down within the product/services line? Are some products/services lagging in markets, territories, or accounts? Do you know why? Is remedial action implemented?
35. Are abnormal cycles or seasonality planned for? Can they be smoothed?
36. Do sales and profits match previous forecasts? Have steps been taken to remedy guesstimates or faulty projections?

Self-examination is particularly important in this phase of research as the fact base for determining sales objectives. Comparing previous sales performance against comparative buying power indexes is recommended.

Use of historical sales data will provide you with ideas of trends concerning seasonality, product profitability, geographic and customer contribution, and performance of market segments. Sales projections are also necessary to plan inventories, align territories, and provide for sales organization. Are sales in certain markets or regions worth their cost ratios?

Can you reduce expenses without losing sales? Would sales in lagging places be improved if you made changes in distribution or personnel? You can make better answers to these and other questions by studying previous history.

Competitors Audit – Their Influence and Direction

A major responsibility of marketing is to know the competitive environment. This knowledge is essential for future planning because marketing events likely to occur are better assessed if your competitors” actions are studied. Valuable marketing intelligence is gathered from auditing your competitors these following ways:

37. Who are your principal competitors, how are they positioned, and where do they seem to be headed? Are small (or new) competitors expected to come into the picture? Do you employ research firms and “spy tools” to monitor competitor activities?
38. What is known about their financial status, key personnel, facilities, product/services reputation, and pricing policies?
39. What are their market shares? Guesses or factual estimates? Are publicly available reports on these examined?
40. How do they compare in advertising, promotion, and distribution activity? Are they more or less effective?
41. Which user features or characteristics of their products or services stand out?
42. What are their greatest strengths and weaknesses? Do you exploit advantageous differences?
43. Is your competitive posture regarded as proactive or reactive? Are you leader or a follower?

It is important to identify every competitor, regardless of size. Look at their product and service, performance record, promotion activity, advertising messages, personnel, distribution, pricing, and other resources.

Most of the information about them is readily available from online articles, annual reports, company literature, advertising, published statistics, and observations from salespeople and customers in the marketplace.

The basis of competition includes product, price, quality, performance, service, technological innovation, and image. You can judge the competitor’s strategy by scrutinizing these elements.

Pricing Audit – Profitability Management

Pricing controls volume and profit. There is no area of marketing activity where strategic decisions are more important. The marketing director must never be removed from pricing decisions because they affect market position and optimum profitability. Many factors require appraisal, including the following:

44. Is current pricing policy designed to introduce, expand, or defend? Is it planned to produce profit objectives at incremental levels of volume? What is the break-even point? Has pricing policy been acceptable in the past?
45. Do facilities or manufacturing processes require more volume than you currently have? Does cost information reflect profit for each product, model, or service?
46. Are there inherent price limitations? How sensitive are profits to change in key variables of price, mix, and volume? Are underlying factors of elasticity in the demand curve considered? Is seasonality factored into production/procurement and pricing?
47. How does pricing compare with your competitors in similar levels of quality?
48. Does your key marketing staff participate in setting prices? Do they understand how pricing policy effects their own sales and profit goals?
49. Is your policy for deviation from established pricing policy defined and policed?
50. Are price lists and pricing information current, understandable, and easy to use?
51. Can the business support more advertising and promotion?
52. Do intermediates in the selling channels (distributors, affiliates, etc.) make enough money to motivate them?
53. Is the history of price deals, discounts, and promotions known? Have they produced added business justifying them?
54. Is pricing strategy focusing on quality of the product/services? Are key factors effecting buying decisions known? Are they emphasized in advertising and merchandising programs?
55. How well are your pricing strategies communicated in growth and profit plans? Are they effectively disseminated throughout the organization on a “need to know” basis?

Customers do not buy a product; they buy value represented by satisfying a want. Price may be a secondary value and only part of a range of quality considerations that are not expressed in price, such as durability, service, or delivery.

Concepts of value largely depend on the service customers receive. For example, customers buy household appliances on the basis of their experience or on recommendations from friends and relatives. Speed and quality of service are major determinants in customer preference decisions.

Top management must establish price policy in the context of planning marketing strategy. Is the position characterized as acquiring, defending, or expanding? Are newcomers gaining a foothold? Is position well-established, requiring defensive pricing?

If pricing strategies cannot be expressed and defended, then price decisions probably reflect “me too” moves, or they are based on “rule of thumb” percentage increase. These methods almost always result in trouble. Companies should seek answers to questions such as the following:

• Will a reduced price actually generate incremental volume?
• How much incremental volume is required to offset a lower price that reduces unit profit margins?
• Are competitors likely to react in a way that will damage the overall profit structure of the business?
• Symptoms of five fundamental deficiencies leading companies into pricing problems and poor profit results can be identified. First, companies often fail to understand the market in which the business operates.
• Which market segments are served and why?
• What is the relative position of each major competitor, and how do they match up on price, delivery, service, and quality?
• To what extent does market demand vary with price? What are the underlying factors that cause relative elasticity or inelasticity in the demand curve?
• How does industry capacity compare with total market demand? What significant changes in capacity are likely?
• How have industry or company pricing practices shifted in the past with changes in capacity/demand relationships?

Second, companies fail to understand the economics of the business:

• How much profit (after all allocations) is generated by each product or model?
• How does the cost and profit structure for each product vary with changes in volume?
• How many dollars of assets are committed, and what return is being earned on the investment?
• How sensitive are profits to changes in key variables of price, mix, and costs?

Third, companies fail to comprehend or act on the economics of inflation:

• Are profit returns adjusted with rates of inflation?
• Do price adjustments lag far behind increasing costs?

Fourth, companies fail to ensure that pricing policy is linked to a total marketing strategy:

• Is strategy aimed at mature, price-sensitive markets where high volume is targeted at price-oriented accounts?
• Is strategy focused on premium markets where custom design or superior performance are key factors in buying decisions?

Fifth, companies fail to maintain tight control of pricing policy:

• Does management take positive steps to explicitly follow the policy throughout the company?
• Are pricing policies defined and communicated in a set of growth and profit targets? Are they disseminated throughout the organization on a “need to know” basis?
• Does the sales force understand how pricing policy relates to achieving their own sales and profit goals?

Never overlook thoughtful examination of pricing in the assessment stage of marketing planning. The marketing staff should be major players in any price planning activity, not just bystanders to the process.

Their input is indispensable since they are the profit producers and must be privy to the pricing objectives of the business. Marketing-driven companies recognize this as part of their basic operating doctrine, but there are still some autocratic, old-school executives who rely too heavily on the financial department for all their price decisions and policies.

They still view marketing as only a selling function, failing to employ a marketing-driven and customer-oriented organizational structure. Marketing personnel must be financially literate. They should know how to read a balance sheet, an operating statement, a cash-flow statement, and understand financial ratios and other measuring sticks for evaluating company performance.

Pricing is the toughest part of marketing and the weakest link in many companies. Simply meeting competitors’ pricing, increasing volume with price reductions, or getting fixed margins over cost does not maximize profit. The secret is to find the right combination to produce more profit from resources.

Marketing Operations Audit – Operational Proficiency, Customer Service, and Monetary Compensation

If your business is going to achieve its sales and profit objectives, it must have trained and motivated marketing personnel. They are your primary contacts with customers, and their performance determines, to a great degree, your business’s success.

There are four elements to a sale: discovering customers’ needs, presenting, closing, and following through. Poor marketers skip the first step and ignore the last! Some important questions for appraisal (and improvement) include the following:

56. Is order confirmation succinct? Are there live agents standing-by in case of customer questions or late order changes? Are delivery dates usually kept? Are customers promptly advised of delays?
57. Is your marketing software geared to provide meaningful data for marketing planning, implementation, and control? Does the database include account history that is usable not only by SQL-pros?
58. How well do customers and market segments receive coverage in proportion to their potential? Are they classified according to their potential?
59. Are marketing costs budgeted, and effectively controlled? Are they included in the marketing plan? In balance with results?
60. Do bonus plans offer optimum incentive in relation to their costs? Are they designed to reward both team and individual performance? Do they include mutually predetermined objectives for each participant to achieve?
61. Are staff members using CRM databases that make their work more productive? Do control reports go the right people in the right form and on a timely basis?
62. Are there deficiencies in recruitment? Is the turnover rate acceptable? Do opportunities for advancement exist?
63. Do training programs receive constant and factual evaluation, and are they frequently updated? Are they designed to deal with work situations relevant to employee jobs and responsibilities? Are training programs favorably regarded by the participants? Do feedback systems exist?
64. Are courses offered that help your employees improve their skills? Do training and management development programs rachet up to encourage advancement?
65. Have selling tools and communication with marketing personnel and accounts been effective? How well is everyone kept informed?

Successful marketing programs must start with good organization of the marketing function. Centralized arrangement of marketing activities often offers more effective results with accountability on the firing line for better products, better service, better pricing, better communications, and better use of resources.

Customers are created and served by coordinated effort, rather than by fragmented, decentralized departments frequently working at cross-purposes with each other.

Choice for the top marketing position demands someone with considerable perspective, creativity, and knowledge of markets and marketing procedures. Understanding and appreciation for specialized functions of market research, pricing, selling, promotion, advertising, recruitment, and manpower development are all requisites.

In short, the head of marketing must be the captain of the whole team, in charge of creating and serving customers – the key to prosperity of the business.

Effective training programs are a crucial part of human resources development that will produce long-run gains. Management must stay abreast of training needs and develop those that best fit their purposes.

Employee turnover can be minimized with better selection, training, and compensation. All are critical elements of a well-run marketing program. People are the most valuable resource, and companies cannot afford to mismanage this precious asset.

You should evaluate turnover to determine if remedial action is warranted. Compensation plans, prepared with the participation and approval of top management, are costs that should be included in marketing plan budgets.

Bear in mind that a good compensation plan tries to incorporate objectives of good management and not just sales quotas.

The compensation plan should strive to balance individual recognition with the mission of the company. Objectives of the plan must be derived from the goals of the enterprise, and they should be spelled out in specifics that have linkage to the individual’s contribution to those objectives.

For marketing/salespeople, this should include provision for their attainment of both sales and profit goals that are their shares of the corporate goal. Other specifics of a plan may include personal contribution to new product ideas, operating economies, suggestions for improving sales procedures, and customer development as reflected in improvement of their account base.

These are tangible elements of a plan, but there are also intangible objectives for such important contributions as teamwork, cooperation, attitude, public responsibility, and personal reliability in the workplace. It is prudent not to overemphasize any single, key factor such as sales without consideration of its profitability to the business. Balanced objectives help to avoid “management by crisis,” and they balance short-term with long-term goals of the enterprise.

The best compensation plans are never perfect, but they should always reflect the objectives of the enterprise, as well as those of persons who are ultimately responsible for the achievement of its objectives.

The time to evaluate marketing/sales compensation programs is during the audit phase of marketing planning. Examine strengths and weaknesses of current incentive programs to make provision for improvement.

Marketing Communications Audit – A Support System to Perceptualize Product’s Story

The axiom “It pays to advertise” is not always true as most performance marketers know. Many variables in the marketing mix weigh into the equation to determine advertising’s effectiveness. Businesses that spend the most often are not spending smart.

Payback from costly outlays for media advertising, sales promotion, and PR must always be carefully scrutinized for their contribution to sales and profit (this is not measured solely by having a direct conversion counted through a tracking pixel, as many performance marketers would think!).

Commonly referred to as the communication mix – these components require objective evaluation and linkage to your marketing plan. Basic checklists for auditing these important elements in the communication mix follow:

The Marketing Communications Plan

66. Does an annual marketing communications plan exist? Is it integrated and compatible with the marketing plan? Not fragmented or unrelated?
67. Are all components of the communication mix managed by one person who reports to the head of marketing?
68. How are expenditures planned, budgeted, balanced, controlled, and evaluated for their cost-effectiveness?
69. Is corporate-level communication activity, apart from product/brand or service marketing, organized into a separate, but related staff? (Annual reports, financial communication, community, and public relations, etc.)
70. Are corporate communication messages conveyed in the right format, at the right times, and in the right places? Are they linked with objectives and strategies in the marketing plan?
71. Does all marketing communication reflect creative and coherent messages in theme, copy, signage, slogans, literature, packaging, and other visuals for strong, consistent positioning, and user perception?

The first step for evaluating strengths and weaknesses of marketing communications is to examine its organizational structure in the company. Marketing-driven companies recognize that media advertising, sales promotion, and PR are more successfully performed when they are aligned within the centralized marketing department. Companies lacking this organization decentralize marketing activities into fragmented alignments.

Decentralized organization is typical of companies where marketing activities are segmented and placed on equal basis with each other. Advertising and sales promotion, in these situations, are not reporting directly to the head of marketing.

This disjointed organization can cause start-stop, poorly targeted, mispositioned, and wasteful advertising promotion and other programs. Like a winning football team, a functional marketing communications group has a competitive advantage when all its parts work together from a well-organized marketing plan and directed by one captain accountable for the plan.

When feasible, and depending on company size, marketing communications programs should not be combined in the same department with corporate-level activity targeted to shareholders, employees, community, legislative, and financial investment sectors.

Corporate programs generally include annual and quarterly reports to shareholders, facility brochures, corporate news releases, house organs, press kits, and financial newsletters. However, close cooperation between corporate and marketing communications groups on the divisional or subsidiary level is always essential for mutual effectiveness.

For example, the shared use of artwork, logos, signage, photography, copy material, and outside production sources represent important tie-ins for better continuity, message theme, and overall cost-effectiveness. Again, anticipating and planning the needs of both corporate and marketing programs are valuable spin-offs of a sound marketing planning process.

Practitioners generally label advertising as “pull” strategy, employed to attract consumers, and sales promotion as “push” strategy, used to motivate sales to consumers. Because the two serve separate purposes and are different from each other, they are frequently managed by individual departments or outside agencies.

To avoid working at cross-purposes that lack coordination with objectives, it becomes doubly important that you manage and control their activity through the marketing communications plan, which in turn is coordinated with the marketing plan.

Most companies use a combination of “pull” advertising and “push” promotion, but in the absence of good planning and implementation, it is easy for the mix to splinter and fragment.

Media Advertising – The Push

72. Are media objectives, strategies, tasks, and budgets integrated (and included) in the marketing plan?
73. Are all forms of media explored for their cost effectiveness in the process of planning a media program (and budget) to achieve your sales goals and profit objectives?
74. Does the ad agency (or in-house staff) receive input from your marketing plan, so that media selection (and positioning) is linked with your marketing plan’s objectives and strategies? How well is your agency (or in-house staff) kept informed?
75. What criteria are used to select your agency (or in-house staff) and is there objective evaluation of their performance on a regular basis?
76. Do frequency and size of media expenditures merit employing an in-house agency to prepare and place your media advertising?
77. Does research and tracking methodology objectively measure media dollars spent with marketing results? What is their correlation if proper conversion metrics are not feasible to implement? Are leads from advertising carefully followed and evaluated?

Media advertising is a necessary tool of marketing, and its emphasis in the communication mix depends on the nature of goods or services being offered, as well as the product’s life cycle position. Advertising is often the scapegoat and recipient for criticism because there are so many intangibles that are difficult to measure.

To evaluate media advertising, it is necessary to determine what is desired of media advertising or what purposes are to be served before planning a campaign or allocating funds. Many companies are led down blind alleys, increasing their advertising costs without carefully determining if they are getting their money’s worth.

• Is the objective to increase market share, to introduce a new product or service, to expand into a new market, or to grow revenues by X percent?
• Does it help to sell a product?
• Is it better to use the money for more salespeople, for training, or for some other sales support program?
• What is the most cost-effective media advertising mix (social, print, radio, television, online display, direct mail, billboard, etc.) to employ?

All too often, advertising expenditures are based on percentages of sales, and then using this number as an index for setting budgets for next year.

This is an illogical approach, a symptom of value rigidity and marketing inertia. Simply picking a number may be too little or too much. It does not mean that the advertising expenditure is correlated with marketing objectives.

Advertising works successfully when other key marketing factors (usage, experience, pricing, distribution, and packaging) are in place.

Advertising is a vital ingredient to the concept of “added value,” which involves innovation, quality, and consumer perception. Innovation without quality is short-lived; consumer perception without quality and/or innovation is only puffery; and both innovation and quality, if not translated into perceptions, may be useless because no one will know that the product is new or better.

This means:

1. There is a relationship between perceived quality and relative price.
2. Improving relative perceived quality increases market share.
3. Consumer perception of quality leads to ultimate profitability of the product or service.
4. Advertising influences perceived quality.

These conclusions underscored the importance of communicating the product’s added quality or value. Marketing wisdom and business experience show that advertising must convert product data into perceptions as a component of added value, a fact that should cause top management to view advertising (and all other elements of marketing communications) as a carefully planned, up-front investment in product value, and not a variable cost.

It is important to remember that the intangible nature of human perceptions and allocation of resources to conceptualize “value added” will continue to require both artistic and analytical decision making.

Performance marketers need to understand that advertising, while necessary in one form or another, is only one of many essential elements in the marketing communication mix. It is not a panacea for other sales problems.

The first step in media evaluation is to be sure that media strategy fulfills the objectives outlined in the marketing plan. This presupposes that the target markets and the goals that media advertising is expected to achieve in these markets are incorporated in the marketing communications plan, which also includes the details for sales promotion, and publicity. Some typical media objectives include the following:

• Increase awareness
• Generate awareness for new product/services
• Increase brand preference
• Continue positioning – reinforcement
• Solidify customer loyalty
• Reach decision makers
• Communicate key product/service benefits
• Arrest declining trend
• Build demand for brand/product/service
• Position company as major source
• Obtain sales leads (performance marketers, please note: this is just one, not the only one, objective)

The second step in media evaluation is to prepare a realistic budget in the preliminary planning stages so that everyone involved knows what they have to work with. Delegate creativity to an agency (or in-house staff) but be sure they have adequate information from your marketing plan about the product, markets, competitors, and sales objectives. Refrain from acting as the art (or production) director and concentrate on the business end of advertising activity.

Always consult with media staff in early planning stages, and not at the last-minute. Advance planning can be a major competitive advantage. Try to strip away any unnecessary approval layers so that the big ideas make it to the decision makers.

Sales Promotion – The Pull

78. Do promotions support sales objectives in your marketing plan, rather than being isolated and unrelated events?
79. Is provision for promotions planned (and budgeted) as part of your communications plan?
80. Are promotions coordinated with field selling, publicity, and media for optimum results? Are they tracked and analyzed to measure success or failure?
81. Have point of sale (POS) displays or cross-sell opportunities online been used to support special sales promotions? Do they measurably contribute to your sales campaigns? What are the reasons for success or failure?
82. Do merchandising incentives (contests, awards, premiums, cents-off coupons, tie-ins, samples, stuffers, and combo offers) add incremental sales that justify their cost? How is this measured?
83. What criteria are used for choosing webinars and online events to sponsor and attend, podcasts to co-host, or attend online and offline tradeshows? Do costs produce more business and generate more goodwill? How are they scrutinized to determine their cost effectiveness?

It is important to understand the difference and similarities in the purposes of sales promotion and media advertising in order to properly utilize them in marketing communications programs.

Marketers usually refer to sales promotion as the “push” and media advertising as the “pull.” Sometimes the meaning and purpose of these marketing communications vehicles become lost in political disputes over expenditures and shares of budgets earmarked for them.

For example, direct mail and POS are considered by some marketers as media advertising, not sales promotion, because they represent printed material involving artwork and photography. Many online and print ads for free coupons and contests are sales promotions, but advocates of media advertising may claim they are media expenditures.

For purposes of planning, budget allocations, and implementation, it is necessary to properly organize, manage, and coordinate these activities being employed in the marketing communication mix.

Marketing-driven businesses recognize that sales promotion plays an effective role in stimulating the consumer’s decision-making process. Psychologically, purchases are the logical result of gathering knowledge, sometimes referred to as “points of decision.”

Sales promotion provides the stimuli in a variety of situations: receiving direct mail in the home, seeing a retargeting ad online, using coupons from the email shot before going shopping online or offline, or selecting an airline for a trip because it offers “frequent flyer” bonus credit.

Plagued with “rate card shock” from escalating media costs, advertising proliferation has prompted businesses to turn to sales promotion campaigns for short-term results that can be more tangibly measured in terms of incremental sales increases. Advertisers, especially in current, turbulent times, are looking for “more bang for the buck.”

Marketers, of economic necessity, are becoming more discerning in using the myriad of choices in the communication menu, and sales promotion is taking a much more prominent position in the mix. Thus, sales promotion must be regarded as an integral part of the total marketing communication plan.

Regardless of organizational structure, sales promotion should not be divorced from advertising and PR. These activities are interdependent, and they must work harmoniously together to achieve objectives in the marketing plan.

One cannot work effectively without the help of the other. Sales promotion is not a distant cousin invited only when management decides to energize the selling system. This knee-jerk practice leads to fragmented, poorly coordinated campaigns that frequently misfire, disrupting sales continuity rather than being a catalyst to achieve marketing goals.

Sales promotions should only be used to produce incremental business that cannot be attained through ordinary marketing activity. There is only one reason to promote a product: to increase sales relative to what they would have been if there had been no special promotion.

Strategy should be a foremost consideration. Decide on specific actions necessary to achieve the marketing objectives. Identify the promotional device most appropriate for those actions. For example, if continuity of purchase is the objective, then promotional devices could include in-pack coupons or automated “buy again” offers conducted by telemarketing, email and retargeting means, including dollars-off incentives.

Special promotional campaigns can bring in more business (A/B test-wise surely), but they can easily misfire and lose customers when their execution is not synchronized throughout the marketing system (which may not be discernible in an A/B test results report). Promotions must be preplanned, included in budgets, and tied into objectives of the marketing plan.

Successful sales promotions employ important ingredients of creativity, timeliness, resourcefulness, and involvement. These characteristics are evident in many large-scale promotions, which can also be adopted by small companies for their smaller campaigns.

PR and “Marketing Relations” – Building Goodwill

84. Is provision for PR planned (and budgeted) as part of your marketing communications plan, and part of your marketing plan? Do these activities implement objectives and strategies of your marketing plan?
85. Are newsworthy marketing events staged and effectively publicized to generate goodwill and build awareness of your business and its products/services?
86. What kinds of impressions are created about your business and its products/services? Do they reflect a positive image?
87. Is business image and products/services acceptance objectively researched? Is too much credence placed on a few users’ opinions, some sales reports, selected key dealers’ or distributors’ comments? Are survey results skewed to favor (or confirm) preconceived conclusions?
88. Do legislative groups and regulatory bodies and agencies for environment and safety have favorable impressions of your corporate social responsibility (CSR) and its product/service’s reputation? How are these groups reached?
89. Are your publicity stories about new (or improved) products or services regularly sent to media outlets, including bloggers and influencers as well as more old-school ones? Is a special mailing list maintained for this? Are news releases followed with phone calls?
90. Are your sales meetings planned well in advance, budgeted, and evaluated for their value?
91. Is the business actively supporting community programs? Do staff members participate as extensions of goodwill?
92. Do representatives of distributors, dealers and accounts regularly meet with your executives to formulate marketing improvements and suggest new products/services?
93. Are awards given to business outlets/locations and staff for their marketing achievement?

Best results are obtained when PR and marketing relations are viewed by management as activities that start internally and reach outward. Practically all media consider genuinely new product stories newsworthy, and this publicity can produce many leads to benefit introductory marketing efforts.

Constructive marketing relations programs must always strive to establish good working relationships between suppliers or manufacturers and the selling channels. Like PR these activities do not represent paid advertisements, but they are events that gain acceptance and loyalty throughout the marketing system – salespeople, agents, distributors, dealers, and sales outlets.

Good marketing relations with the trade are earned, not necessarily paid for in terms of special discounts, off-invoice allowances, or “push” money for shelf and floor space. In many respects, productive marketing relations stem from a quality product – honestly advertised, fairly priced, and properly delivered.

In summary, and in reference to the importance of marketing relations and publicity, executives and business owners must always be mindful that marketing produces profit. Product research and development, engineering and manufacturing, accounting, and human resources are necessary cost centers until marketing produces sales to support the costs of doing business and returning profits to shareholders.

Therefore, conscientious efforts must always be focused on building mutually productive marketing relations with the selling system and the customers, who in the final analysis, create and perpetuate the business.

Summary and Next Steps

1. Perform a careful analysis of the marketplace environment and your marketing power within it. A thorough and complete audit will provide insight into performance, pointing to strengths and weaknesses that must be addressed in marketing planning.
2. Examination must include all external factors such as markets, competition, government regulation, funding sources, and general economic outlook.
3. Internal components of the marketing mix, such as corporate marketing culture, products/services, customers, marketing channels, order process, marketing history and sales records, pricing, marketing administration, and staffing to include recruitment, training, and compensation. Also include marketing communications that incorporate advertising, promotion, publicity, and public relations must be evaluated.
4. Plan. Set the financial and operating goals after examining your operating environment during audit. Briefly explain the assumptions being used to arrive at the goals.
5. Prepare clear and focused objectives to achieve your operating goals, together with specific strategies and tasks, achieve these objectives. All areas of the marketing mix enumerated during audit should be addressed in the planning phase.
6. Implement. Plans must never become ends unto themselves. They are nothing without execution. Implement the planning process and convert objectives, their strategies, and their tasks into action! This step requires completing “how-to” tasks necessary to fulfill supporting strategies, and their objectives.
7. Tasks required to accomplish everything (with control schedules) include allocating marketing costs with breakdowns of expenditures to achieve them. Expense budgets (with their time frames) for media advertising, promotion, marketing relations and publicity, staffing, and all other marketing costs must be prepared and included.
8. Control. Use a performance review system that measures progress against plan. Meet at regular intervals (usually monthly) with appropriate top management to discuss its effectiveness. Adjust the plan to changes in the environment as they occur.
9. Remember that all plans are imperfect because they cannot predict events with certainty. Be prepared to adjust for unexpected circumstances.