The major reason why sales plans fail to deliver on their promised results is to due to poor execution of the strategy. Tactics that were fine a couple of years ago can quickly become obsolete in today’s tough market place and derail sales plans.
A marketing audit is a tool for evaluating and improving a companies marketing operation it is a comprehensive review of marketing resources, operations and strategy. Conducted on a periodic basis it can provide early warning detection to the three most common marketing problems, declining market share, declining profits, and low moral. Here are some tips...
Declining market share - this can be gradual and often fools managers because everything looks great, top line sales figures look promising however in background market share is slowly being eroded.
Example: The newspaper industry is currently suffering a decline in advertising revenue due to increase competition from online advertising specialist in real estate, employment and car sales. This did not happen but was gradual over a period of years and is a good example of someone else building a better mousetrap.
Declining profits - the exact cause of this can be hard to find, it could be from the gradual increase of raw materials without the occupying increase in pricing; increase returns from customers or simply the increase number of competitors that have entered the market making the cost of acquiring new customers expensive.
Example: For many years the Pacific route was a cash cow for Qantas Airlines with only one competitor United Airlines. Two new competitors Virgin V and Delta have commenced services increasing capacity and driving down fares. Qantas had no choice but reduce its fares or risk loosing market share.
Low moral - This usually starts very subtle before it shows up on the bottom line, warning signs can include top sales talent leaving the company, sales managers becoming frustrated at missing targets, or the loss of key accounts.
Conducting periodic marketing audits is preventive medicine that will alert management to possible dangers from the three most common marketing problems. The ideal time to conduct an audit is when things are going well and optimisms is at it highest.