The case for an objective read on your marketing effectiveness
Most CEOs running £5 – £20M businesses we work with ask the same question at some point “Is our marketing actually working?”
It’s a simple question and yet many CEOs can’t answer it with confidence.
A (very) typical scenario might be that growth is slowing and an inflection point looms. “Should we invest more in existing channels?” “Do we need new routes to reach our audience?” “Is our messaging effective?” “Have competitors caught up?” And one we’ve heard a lot over the past 12 months, “Do we need a new marketing agency”.
Uncertainty around these questions lies at the heart of a business leader’s dilemma; do you pour more money in with the hope of better results, or do you bide your time, pause further investment, and risk slipping further behind in the race with competitors.
Buried under lots of noise (and activity) is the need to clarify if there’s a marketing execution issue, or whether it’s the way strategy, people, budget and execution all knit together. At Open Velocity, we refer to this as the marketing operating model.
The answer is often that there’s a need for an objective take on the effectiveness of your marketing. And one proven way to do this is a benchmarked marketing capability audit.
Seeing the wood for the trees; the value of an independent (external) marketing health check
Often, the first ask from the CEO will be an internal review, or to request some recommendations from the agency partner. Both of these have a value but may well contribute to or exacerbate the problem.
Let’s start with marketing agencies. There’s a very obvious commercial tension here between giving them objective advice and the agency selling more of their services. They might also struggle to provide a holistic view simply because it’s not a service they offer, they might not have the right people or they might be cautious about recommending marketing activity / channels they don’t offer. Whatever the reason, they’ll likely see solutions shaped in the services they sell. After all, SEO agencies want to sell SEO, content agencies want to sell content and so on.
When working inside the business, proximity to it brings a detail and level of understanding that’s incredibly valuable. But it can be difficult to maintain objectivity and perspective. Internal approaches can be too narrow in scope, use generic templates and risk individuals marking their own homework.
Often marketing teams will frame their evaluations based on year-on-year comparisons, or a previous quarter’s performance; looking back to what has worked before, rather than ask if things need to change. This leads to marketers working in the business rarely questioning if the strategy is right in the first place, whether there’s enough definition to the target audience(s), or even if they’re the right audience(s) to begin with. Strategic drift can also affect the internal view – maintaining consistency and coordination as a business scales can be tough. Also, what was working 12-18 months ago might need to change. For example, audience behaviours are constantly shifting and this regularly has an impact on where a business should be looking to engage and persuade. Being on the inside of the marketing function can mean it’s difficult to find the time to ask these more fundamental questions. In short, the context is wrong to get an objective view.
These are the limitations of the internal perspective.
A good example of this is a recent SaaS business we worked with who recognised the need for a marketing health check. After years of consistent growth, and successful funding rounds with investors, growth was stalling. They initially approached us amid growing concerns about rising costs and falling PPC performance, however niggling doubts were growing that something more fundamental was the root cause.
As a result, they didn’t want to commit more spend without first getting an independent assessment of the sales and marketing capability. Several weeks later, we’d carried out an audit for them, with recommendations made to address the short term tactical problems that they’d come to us with, as well as to address some of the underlying strategic issues regarding their positioning and competitiveness. Above all, the marketing audit had provided the confidence to act, confirming some suspicions and throwing a spotlight on new priorities.
You can read about the WorkBuzz marketing audit case study here.
A good marketing audit will therefore balance a structured approach, a complete strategic picture and an unbiased view. It will also remain flexible to the fact that each business has nuances that might need accounting for.
An outside perspective will often ask the basic questions that strike at the heart of the issues – starting with the strategy, and working through capability, process and effectiveness. It’s a very different approach because the motivations and perspectives of the external voice are completely different.
“The Open Velocity audit is excellent. It quickly identified the areas where our marketing thinking was either incomplete or inconsistent, and through this highlighted a set of prioritised actions to help address the associated issues. I would happily recommend it to any company wanting to improve their marketing strategy and delivery.” – Bob Bevan, COO, Visicover Ltd.
The power of benchmarking in an audit
As a business grows so too does its competency in a range of sales and marketing capabilities. For many businesses though, it’s difficult to know what to prioritise, and where to invest first. Knowing how your own business matches up to businesses on a similar path can help identify the strategic decisions that are needed to better prepare for growth.
For example, we’d expect every business, whether turning over £3M / yr or £30M/ yr to have defined its competitor set, understand the threats of new entrants into their sector, and be seeking feedback from customers. These are some of the determinants we expect to see in every business we audit.
However, whilst the £30M business should have a full brand anatomy in place, a fully resourced in-house team (or effective agency partners) aligned to strategy, and the appropriate split of upper, mid and bottom of funnel marketing activity in place, these wouldn’t be expected of the business currently sat at £3M.
Our approach is based around 5 areas of capability; Insight, Strategy, Execution, Effectiveness and Optimisation. Within these categories sit what we call Performance Drivers that underpin the questions we ask. In the spidergram diagram below, you can see where the different benchmarks sit. For example, we would usually expect a £30M business to be strategically secure, with established processes across all the 12 Performance Drivers, from knowledge of their market to customer definition, effective Go-to-market execution and scalable, consistent marketing activity.
By way of contrast, the red line shows the benchmark for businesses that we call Scalers, who might be at lower levels of annual revenue, or less aggressive with their growth trajectory. Here the benchmarking picture is more nuanced, depending on the area of capability. For example, for a Scaler business (in the £5M – £10M range) we’d usually expect to see highly developed Go-to-market strategies in place, and extensive competitor insight supporting strategy, but perhaps would still be evolving capabilities in reputation management and in-house resourcing, skills and capabilities.
You can find out more about our approach here.
The four signs your business might need an independent assessment
Based on our experience at Open Velocity, there are typically four scenarios where an independent marketing audit is often the right first step.
I’ll start with the most common.
- Growth has plateaued despite marketing investment continuing to creep up. There are an awful lot of reasons why growth might have stalled, which is why a trial and error approach to addressing your growth challenges is a really bad idea. An audit should be comprehensive enough to cover off (almost) all of the possible causes, from drifting away from what your customers want, lack of differentiation among competitors, marketplace dynamics shifting the goal posts, poor or sub-standard marketing execution and everything in between.
- New leadership (or a new senior marketer) comes in and wants an objective view of where the business is, without baggage or internal politics clouding the picture. This person will often want the complete picture – how the business is strategically placed as well as its marketing execution abilities.
- The business might be preparing for investment and needs to accurately assess how fit and ready it is for marketing investment. This might be carried out proactively before the path to investment begins giving the business time to adapt, or can be carried out as a result of investor due diligence or part of the funding round. After all, investors want their money to turbo charge an existing (capable) marketing function, not fund the exploration of one.
- There’s a lot of internal noise and disagreement over what’s working and what isn’t, with gaps in the data and an inability to get to the truth. This situation can often lead to decisions stalling, putting off the longer term strategic bets. As a result, short term gains are increasingly prioritised and put under the spotlight.
From questions to insight – what a marketing audit process delivers
A marketing audit needs to do 3 main things. First, it should provide sufficient rigour and breadth that delivers results that are accurate and reliable. There should be a burden of proof to the audit’s questions, along with capturing multiple perspectives to feed into what’s happening. At Open Velocity, we ask over 80 questions covering the 5 categories I outlined above. This step requires time with key people from across the business (sales, marketing, product, possibly others), and as a result can take a week or two to conduct.
Second, it needs to provide actionable and tangible outcomes that can ideally be linked to short, medium and long term prioritises. At Open Velocity, the final report provides a spidergram (example above) showing exactly where a business is meeting the expected capabilities, missing or exceeding them. Along with this, the report provides a red, amber, green traffic light system working through every aspect of the businesses’ sales and marketing function. Crucially, this ends with a prioritised list for senior leaders and stakeholders to act on.
And third, the results need to be communicated clearly back to all the key stakeholders. That might be the marketing, sales and product teams, the board or senior leadership team, the marketing agency(s) or a combination of all three.
Ultimately, the outcomes of an audit are only ever as effective as the ability to act on its findings.
A final word…
If you’re still reading this, ask yourself this simple question – If someone were to take an independent look at your marketing tomorrow, how confident would you be they’d find a clear strategy, defined audience(s), and evidence your marketing is working? If you can’t be certain about the answer, it might be time to consider a strategic marketing audit.
FAQs
Does a marketing audit slow things down and get in the way of quick decision making?
A marketing audit might take 3-4 weeks (max) to complete, but it provides an expert and independent view of what’s working and what isn’t, rooted in benchmarked context. However, the costs of making the wrong marketing decisions or investment calls are usually measured in months, or years. Business leaders can find it difficult to accept they’ve made the wrong strategic decisions and often this leads to businesses compounding bad decisions.
What should I be able to do differently after an audit?
The outputs of an audit – detailed analysis, benchmarked performance, prioritised actions – should bring all the key stakeholders together and align them on where the strategic and fundamental challenges of growth exist. The recommendations should then translate directly into prioritised actions the business can take.
How are the benchmarks relevant to my business?
The benchmarks we use are based on decades of experience working across brands and businesses from across a huge range of industries and growth trajectories. Whilst a good marketing audit should review current marketing activity (this forms one of Open Velocity’s 5 strategic categories), many of the benchmarks are based on the structural and strategic foundations and processes needed in order for a business to grow. There are nuances between sectors and industries but the underlying principles of growth are consistent across most businesses.
What is the marketing operating model?
A marketing operating model is the framework that maps out the people, budget, process and tools needed for a business to effectively deliver its marketing strategy, turning it into well run, consistent marketing execution at scale.
Commonly, many businesses will have both a clear strategy and lots of activity ongoing. However, this doesn’t necessarily translate to a clear, consistent and aligned overall picture. For example, without the right people in place, or the right processes, speed of delivery may be slow, or activity might be running that doesn’t align with the strategic direction the business wants to pursue.
