The role of audit in marketing excellence
pharmafile | March 28, 2008 | Feature | Sales and Marketing |Â Â audit, excellence, marketingÂ
The goal for any business leader, whether they run a company, business unit or brand, should always be 100% alignment of 100% of their sales, medical and marketing teams 100% of the time. An audit will quantify how close they are to this. Always remembering that true alignment is about hearts and minds, not recall of a message.
In 1977, Philip Kotler reviewed the need for marketing audit in a landmark article for The Sloan Management Review. He said that any company taking its marketing seriously should conduct regular audits.
Marketing audit, which business schools now teach to students from all sectors, is very useful to high-performing brands and companies to help identify which aspects of the spend works hardest. The factors driving success can be more accurately identified, enabling more precise targeting of resources to maintain competitive edge. Marketing audit also helps underachieving brands as it will identify how and where performance can be improved and how budgets can be more effectively deployed.
Kotler outlined four principles of audit. It should be independent, removing (often unintentional) bias and preconceptions. It should be broad, taking account of the effectiveness of decision making across the business through to execution of these decisions across the promotional mix. It should be systematic, applying rigour of analysis and process. Finally, it should be done periodically, to benchmark movement.
This article explores the benefits of audits conducted within the pharmaceutical industry if applied using the four principles as outlined by Kotler.
The ultimate aim of the audit is to gain competitive advantage. At the end of the day, that is what marketing is about, so the better your approach, the more aligned your staff, the more competitive you will be.
Being more competitive means:
* Accelerating sales and market share
* Optimising time and money
* Both of the above
To improve the way a company or an individual brand team goes about its marketing two things need to be identified.
What are its strengths? Not the brand, but the people and processes that go behind building the brand. All companies and all brand teams have strengths, but some are hidden. The audit brings these hidden strengths to the surface. When strengths are transparent they can be quantified and reproduced
What are the development areas? Not an exhaustive list, just the one or two key areas of development. Again these need to be very clear and they need to be quantified in order to benchmark future improvement.
The pharmaceutical industry can benefit more than most industry sectors because of the complex nature of the ways in which we make decisions, involving many internal and external stakeholders, and in the mix of how we execute our strategy across many different functions and agencies. Selling perfume is simple, selling pharmaceuticals is complex.
The cross functional pharma brand team, in its many forms is essentially the decision-making unit. It sometimes makes decisions within a global or European framework so the definition of what constitutes 'strategy' varies from one company to the next, but nevertheless it is a complex decision making unit.
Once decisions have been taken around things like positioning, segmentation, targeting, people deployment, phase IV spend, market access, promotional mix resource, which agencies to work with etc, it all needs to be executed.
Generally speaking, the more 'specialist' a brand is the more complex the execution is. Having said this, there are many brands within primary care that have complex execution models – sometimes out of necessity. The more complex the model of execution (the more people it involves, the more functions and agencies) the more chance there is for strategic drift.
Marketing audit
To break it down very simply, an effective audit helps a company or brand team quantify and understand the level of excellence it possesses in terms of:
* Strategy
* Execution
The two by two matrix (above right) lists some features that characterise brand teams who are good or poor at strategy and execution – it is not exhaustive.
A key question every cross functional brand team leader, marketing director or business unit director faces is: "Where are we if we assume there is a normal distribution of quality across our industry?"
One of the most critical things to get right within the pharmaceutical industry, given the complex way we interact with our customers, is getting total alignment behind the brand strategy.
To audit this alignment is a critical success factor for any brand. When I was at AstraZeneca, we commissioned some external work to test the internal recall of the messages of each brand team, across all functions and through the sales management line to the fieldforces. Across our six brand teams there were varied results. One result shocked my leadership team the most was that only 35% of the HQ cross functional teams could recall the key messages. This was a shock to the brand leader who had put a lot of energy into ensuring clarity and communication of the messages. It highlighted how difficult it is to achieve alignment. The goal should always be 100% alignment of 100% of our people 100% of the time. If we get only 35% recall internally, how do we expect to get higher than 35% customer recall?
What we could not do at AstraZeneca, because the facility did not exist, was to explore beyond recall, to gauge 'understanding', 'belief' and 'execution'. Testing recall was good but to drill deeper would have been so much more beneficial. Internal questionnaires and structured management discussions are insufficient to get into the hearts and minds of people.
It is critical to understand and quantify this cascade of recall through to understanding, belief because it will highlight where additional focus and effort needs to go. There will always be 'drift', but a brand leader needs to know the location of the drift and to what extent it is affecting business.
This should not just stop with the fieldforce, it should include their managers (and second and third line mangers if they exist), plus all HQ functions and agencies involved in building the brand. All too often, it is easy to assume that key agencies are fully aligned to the strategy when actually, in the hectic world of pharma today, we sometimes do not find enough quality time to brief them fully.
If a company is considering appointing external marketing auditors they should be confident the auditors have the right experience and behavioural approach. For further tips on this see the table above.
One necessary characteristic of the audit is speed – the audit team should be fast but thorough. A well done audit should take weeks not months.
Ask the auditors to show you an example of what a practical action plan might look like at.
Having an audit, is like having an external coach for the brand or portfolio, providing the brand leader or business unit director with quantified insight into the capability of the way their team(s) make decisions and then execute them. It provides valuable input into the performance management and objective setting process because it provides a numerical baseline from which to maintain strengths and improve development areas. This in turn leads to focus on the right things, which gives competitive advantage, which further driving business performance.
Box: 7 steps to choosing external marketing auditors
1. Ensure the audit team have some hands-on marketing experience so that your staff will accept them more readily
2. The audit team should avoid confusing people by voicing any judgements during the audit – all conclusions and recommendations should be left to the end of the process
3. The audit team should not confuse people by introduce new marketing language or suggest any new processes during the audit phase – again all conclusions and recommendations should be left to the end of the process. The main purpose of the audit is to identify how effectively the current processes are being applied across all functions, rather than to introduce new processes and language
4. The audit team should not divert your staff away from their day job
5. The audit team should be fast but thorough. A well done audit should take weeks not months
6. Ask the auditors to show you an example of what a practical action plan might look like at the end of the process. What you do not want to be left with is 50 pages of analysis, many observations of interest but very little when you apply a 'so what' test
7. Finally, be prepared to help the auditors help you by emphasising to your staff that the purpose of the audit is forward looking and positive, not a backward looking, fault finding exercise
Rob Wood is managing director of STEM Marketing. For more information visit: www.stemmarketing.com
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