Every business conducts an audit; some do it yearly, others quarterly, and some twice yearly. This is when board members, team leads, and team members have a sit-down session to analyze the results gotten so far and every other piece of the business.
The same ideology is applied in the microfinance sector, marketing audits serve as diagnostic tools, enabling MFIs to critically assess their marketing strategies, ensure alignment with organizational objectives, and adapt to the changing market.
This article will look at how to conduct a comprehensive marketing audit.
What is a Marketing Audit?
A marketing audit is a systematic, objective evaluation of an organization’s marketing strategies, activities, objectives, and performance. For MFIs, this process involves thoroughly examining internal and external factors that influence marketing effectiveness, aiming to identify areas for improvement and ensure compliance with industry regulations.
This is slightly different from conducting a full business audit. In microfinance, conducting a full audit may include factors such as looking into the financial statements, loan portfolios, governmental policies, internal policies, and many more. However, a marketing audit only covers areas that are marketing-influenced.
For example, in a marketing audit, we look at acquisitions, retention mechanisms, social audits, etc. A marketing audit’s advantage is knowing if any optimization process is needed and what needs to be done to improve acquisition.
Key Components of a Marketing Audit
A marketing audit has various components. Focusing on the correct sections will ensure you get the most out of it. We will look at the key elements of a marketing audit.
- External Environment Analysis
The first step of the auditing process requires an external overview. For the UK market, this will require identifying potential opportunities, trends, risks, and even threats from previous months and the possible ones to come.
For an external audit, this also includes being familiar with UK-specific financial regulations and standards, such as those set by the Financial Conduct Authority (FCA).
2. Internal Environment Analysis
Another important component of a comprehensive marketing audit is an internal analysis. An internal audit will require analyzing the efficiency of the organization’s setup, decision-making, communication channels, and resource allocations.
It will also require a critical analysis of existing marketing strategies to determine their effectiveness in reaching target audiences and achieving desired outcomes. This includes reviewing the marketing mix (product, price, place, promotion) and digital marketing efforts.
3. SWOT Analysis
Everyone is familiar with the SWOT analysis, which is another piece of a marketing audit. A SWOT analysis identifies internal and external factors that contribute to marketing success or hinder it. It also goes in-depth into analyzing brand reputation, operational efficiencies, technological advancements, and competitive pressures and advantages.
4. Marketing Function Evaluation
A final and crucial part of a marketing audit is evaluating all marketing resources and processes, which includes the marketing information systems, such as data collection, information distribution, funnels, marketing plans, decisions made, etc.
It also profoundly analyses marketing activities’ return on investment (ROI) to ensure resources are being utilized efficiently. This involves assessing cost-effectiveness and the impact of marketing expenditures on organizational goals.
After understanding the major components of a market audit, we would also examine the steps involved in conducting a comprehensive marketing audit for your organization.
Steps to Conduct a Marketing Audit
Running a comprehensive marketing audit for your microfinance business is quite simple. Depending on your business’s net worth and transactions, it may require more hands and more time, but it is not impossible. Here are a few basic steps to conducting a marketing audit.
- Step one: Preparation
Define Scope and Objectives: A marketing audit might be comprehensive and niche-based. You can focus on internal audits and analyze tools and their impact on marketing results. It can also be full-scale, analyzing every funnel piece from the top to the bottom. So, clearly articulate the purpose of the audit, specifying which areas will be examined and what you aim to achieve.
Assemble an Audit Team: Form a cross-functional team with representatives from marketing, finance, operations, and compliance to provide diverse perspectives. This will bring insights from various experts in different fields of the business to properly collect, combine and interpret data.
- Step Two: Data Collection
Gather Internal Data: A marketing audit is not complete without data collection. Ensure that information on current marketing strategies, budgets, performance metrics, and organizational structure is collected.
Conduct External Research: Collect external data like market trends, competitor activities, customer preferences, and regulatory requirements.
- Step three: Analysis
Perform SWOT Analysis: After collecting data, you are next to interpreting these data. Using SWOT analysis, you can utilize the collected data to identify strengths, weaknesses, opportunities, and threats.
Evaluate Marketing Mix: After conducting a SWOT analysis, analyze the effectiveness of product offerings, pricing strategies, distribution channels, and promotional activities.
Step four: Reporting
After interpreting your gathered data, Compile the analysis into a comprehensive report, highlighting key insights and actionable recommendations. Your reporting isn’t complete if there are no recommendations. The aim of a report is to inform and suggest a move.
Step five: Implement, monitor and optimize
After the above processes, create a detailed plan to implement the recommended changes, assigning responsibilities and timelines. Establish metrics and monitoring systems to track implemented strategies’ effectiveness and make necessary adjustments.
Best Practices for UK MFIs
Now that you’ve done a complete marketing audit, here are some best practices you can adopt.
- Stay informed about changes in UK financial regulations to ensure ongoing compliance. Regular training and updates for staff can mitigate the risk of non-compliance.
- Involve key stakeholders, including customers, employees, and partners, in the audit process to gain comprehensive insights and foster a culture of continuous improvement.
- Leverage digital tools and platforms to enhance data collection, analysis, and marketing execution. Embracing digital transformation can lead to more efficient and effective marketing practices.
By conducting a meticulous marketing audit, UK microfinance institutions can enhance their strategic alignment, optimize marketing performance, and better serve their target communities, reinforcing their role in the financial ecosystem. If you’re struggling with solving your microfinance marketing problem, whether it is acquisition or activation, contact us today. Let’s begin with a discovery call.
