Norman Stangroom discusses the way forward when it comes to your company's market strategy.

I'll start with the song lyrics by Johnny Nash: “There are more questions than answers”. This is absolutely true when undertaking a fundamental review of your business.

To get the right answers you must ask pertinent questions about your operation. You cannot create a sustainable marketing strategy without a realistic assessment of the market and your firms's performance against major competitors.

Marketing professionals adopt a method to ask these questions and get the answers in a logical and structured way. It's called a marketing audit. A marketing audit involves reviewing your business objectives, strategies and tactics, defining problem areas and opportunities, and recommending a plan of action to improve your company's performance.

It's best to audit in two parts – internal and external. In the internal audit you examine the performance of key areas inside your business such as:

  • Sales and profitability performance – What is the gross and net profit as a percentage of sales? Are sales, revenues and profits meeting forecasts? Are the sales team and direct marketing campaigns successful in winning orders? Do marketing activities show returns on investment? Detailed sales analysis should include: geographic area, industry sector, product and major customer factors
  • Products – What benefits are offered to your customers? Which products contribute most profitability? Is it time to introduce new ones and discard others? Is product demand growing, stable or likely to decline? Are products reaching customers effectively?

    There is a need to understand target groups and trends to isolate potential. Consider developing risk management and other.

    fee-earning consultancy services. There must be opportunities to take a lead with an insurer as capital provider and risk taker

  • Pricing – Have you scrutinised your pricing strategy? How were prices decided? Are your offers perceived to be value for money? Consider a move towards a fee-based approach, the use of net rates and areas to add value in the face of a price-driven market
  • Place – Are your placing arrangements still appropriate to the marketplace? What other routes to customers are open to you?

    The key is to retain and focus effort on profitable customers. Review all customer interaction from the use of your premises to the shift towards telemarketing and ecommerce. More customers want service anywhere, anytime, or specialist advice and this demands different approaches for different customers

  • Promotion – Has your expenditure been effective? Are sufficient resources being committed to promotion so that objectives can be achieved? Is the message reaching the target audience? How effective are your campaigns in terms of enquiries and actual sales? Closely review your options. Consider the development of your brand and which methods – campaign literature, advertising, public relations, sponsorship – are most appropriate. Promotional activities must lead to sales
  • People – Are your resources best structured to service and to winning new customers? What is the size and ability of your marketing

    function? Do you motivate and develop your sales personnel? Do you encourage communication, innovation and feedback from all levels of the organisation?

    Consider incentives, training, work patterns, skills shortages and the need to outsource certain functions. Employing the right people is the most important critical success factor

  • Overall – Have you prepared a marketing plan? Are your marketing objectives specific, measurable and challenging? What tactics do you employ to meet these objectives? Realistically, will they deliver your objectives?

    Enhance performance measures. Calculate and communicate campaign costs to your team. Include the “lifetime value” of business gained in your calculations. In subjective areas, introduce questionnaires to determine your customer performance.

    Then there is the external audit. Here you review trends in the marketplace that affect your business, but over which you have no control:

  • economic – inflation, rate of growth
  • legal/political – government regulation, EC directives
  • social/cultural – population, lifestyle changes
  • technological – advancement, substitute products
  • environmental – health & safety changes
  • the market – size, market share, and competitors' activities.

    What markets are competitors targeting? What products really compete with yours? What customers do you serve strongly? How are your products unique in areas highly regarded by customers? How do your product/service/quality standards compare with competitors?

    Consider major issues such as industry rationalisation, the move to multi-channel marketing and increased competition from brand retailers, technologists and non-conventional competitors.

    A comprehensive marketing audit is vital for your current position and to set your future course in the marketplace. The information gathered will establish a sound marketing strategy, so that operational plans achieve what your business needs most.

    And the process isn't as daunting as you might think. For all the textbook definitions, marketing is really about making things happen. So start making things happen with a marketing audit of your business.

  • Norman Stangroom is a fellow of the Chartered Insurance Institute and a member of the Chartered Institute of Marketing. He is a director of John Shetcliffe Marketing, providing practical marketing services to intermediaries.

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