Did you know that over 26,000 books have been written about the subject of “goals”? We are a culture obsessed with goals: setting goals, measuring goals, breaking goals, and achieving goals. How good is a goal to your business strategy if you set it up incorrectly to begin with?
Use the following roadmap to create goals for your business development strategy or marketing plan.
Where Goals Originate
All goals start with your company’s pain points, customer personas and past performance data. If you are starting with a new creative partner be prepared to spend time during the onboarding process outlining customer personas, mining your CRM for data and aligning your activities with the company’s business development goals.
If you are starting this process without an outsourced business strategy team, start by building your own internal team.
This will not only give you insight into other areas of your business but also will foster buy-in from other departments. Your team should include a member of sales, marketing, finance and other key leadership positions as appropriate. Try to keep your team to no more than five members to hedge against analysis paralysis, but beware: fewer members on the team can lead to inaccurate data assumptions unless key areas of the business are represented.
Company Pain Points
During your initial meeting with either your trusted business strategy partner or your internal team, you will explore the concept of company pain points. Pain points are simply identified areas for improvement that are causing friction to the bottom line. Causes of friction can come from internal or external sources. An example of internal friction point could be a problem on the manufacturing floor, a company customer service issue or a service warranty issue. An example of an external friction point would be a problem with vendors, a lack of sales leads or increasing competition either in the geographic market or online.
Take 20 minutes and brainstorm as many company pain points as you can. Categorize these identified areas for improvement as either internal or external. Look for patterns in your pain points and combine as many related issues as you can. List these pain points in numerical order according to how impactful they are to the bottom line. Now list the same pain points in numerical order according to how hard they are to implement or improve.
The 80/20 Rule
Taking your two lists you can now apply the 80/20 rule. The 80/20 rule simply means we are looking for the 20% of the list that has the highest impact to the bottom line, but is the easiest to implement.
This doesn’t mean we are throwing away 80% of what you have brainstormed. After achieving the 20% of the goals, you can revisit your brainstormed list and reapply the 80/20 to tackle the next 20%.
You and your team have now successfully identified the most impactful pain points to address at your company that will take the least amount of investment to achieve.
Personas are fictional representations of your ideal customers as human beings, not as numbers on a spreadsheet. By employing personas in your strategy, you are taking your customer’s entire experience into consideration, including experiences outside of their interaction with your brand.
While fictional, personas are rooted in both qualitative and quantitative data. Data driven research is key to ensuring your personas reflect your current customers and your future market base. Companies commonly exclaim that they know their customers best and skip the data research phase of persona development. When persona development is based on your intuition or anecdotal evidence, you run the risk of skewing the market to look the way you wish to see it, not how it functions in reality. Don’t make that mistake. Do your homework.
Quantitative Data Sources for Persona Development
Persona development begins by mining your Customer Relationship Management software (CRM). This data can be sorted in myriad ways, including:
- Sales by Product Type
- Sales by Company
- Sales by Customer Title
- Sales by Customer Zip Code/City/State
- Sales by time of day
- Sales Frequency
- Sales by Industry
After digging into your customer data, look for patterns to start defining your personas. You want to develop no more than 3 to 5 personas total for your company. For more information on quantitative data development read “Personas 101: Part 1” by Illumine8 Marketing & PR.
Qualitative data Sources for Persona Development
Once you have the numbers, you can dig into the softer side of data. Customer interviews, surveys and social sourcing are ideal tools to gather specific but not number driven data about your customers. When conducting qualitative data collection it is key to not lead the customer into answering how you would like them to respond. If you lead the answers your data will be of less value and will skew the results.
Want to really dig in? Read our posts Personas 101: Part 2 and Personas 101: Part 3 for the deep dive complete with step-by-step instructions for conducting your research.
Company Past Performance Data
Now that you have your company’s top pain points and your ideal customer personas in the goal cocktail shaker, it’s time anchor your goals in reality.
Specifically, we need to look at your company’s past performance objectively.
No one wakes up and decides that they are going to run a marathon that day if they have never run a mile – except Forest Gump. The same goes for your company.
Never ran an inbound marketing campaign? Never hired a sales executive? Maybe you haven’t changed your customer service triage system in years. All these situations are perfectly normal for all companies of all industries. Keeping this in mind what you shouldn’t expect are overnight miracles. If you set goals that are rooted in dreams, you set your company up for failure.
Instead dig into your company’s past performance reports. Every company and department has different key performance indicators (KPIs) based on their growth stage and industry. That said, a few that are core to all companies include:
- Cost of Goods Sold
- Day Sales Outstanding
- Sales by Region/Product Line
- LOB Revenue vs. Target
- LOB Expenses vs. Budget
- Sales Growth Per Quarter, Per Year
- Customer Lifetime Value
- Customer Acquisition Costs
- Customer Satisfaction and Retention Rate
- Net Promoter Score
- Number of Customer vs. Customer Percentage of Revenue
- Percentage of Returns
- Warranty Service
- Average # of Days Per Support Ticket
- Internal Metrics
- Employee Retention Rate
- Employee Satisfaction
Constructing Your Goals
Now that you have a full picture of your company’s pain points, ideal customer personas and past performance it is time to put it all together and create SMART goals.
What are SMART goals?
- S – Specific: Goals should be unambiguous and defined.
- M – Measurable: Goals should be quantifiable and tied to specific metrics.
- A – Actionable: Goals should include items that can be acted on today with the tools and resources the company has or can easily obtain.
- R – Realistic: Goals should reflect the company’s past performance and set a reasonable expectation.
- T – Timely: Goals should specify a timeline of activity and not be ongoing or open ended.
For each of your identified pain points, write a specific goal in the SMART format to address that pain point that is inverted to speak specifically to the customer persona it addresses. Root this goal in measurable metrics that are based on your company’s past performance KPIs.
What does this look like? Below is an example written for Acme Manufacturing, a company that makes widgets serving the construction industry.
Broad Goal: Increase sales of widgets at Acme Manufacturing.
Specific: Acme Manufacturing will increase Widget A sales to Charlie Construction Manager by 15% in the second quarter of the year by making it easier for Charlie to order directly from Acme online via a mobile device. Because Charlie prefers to work in the field, Acme will develop a more mobile friendly website that works well on all mobile devices. This new mobile friendly website will begin development at the beginning of Q1 and launch at the end of Q1 in time for Q2 sales.
Is Acme’s goal for widget sales SMART?
- S – Specific: Acme is focusing on just Widget A sales for the persona Charlie Construction.
- M – Measurable: Acme set the sales goal for Widget A sales at 15%.
- A – Actionable: To increase sales, Acme is developing a mobile friendly website portal for Widget A sales in Q1.
- R – Realistic: Acme set both a realistic sales growth goal and development timeline based on previous company performance.
- T – Timely: Acme has set both a development timeline of Q1 for the goal and a measurement timeline of Q2 for the goal.
Still not convinced all this work is worth it to the bottom line? Consider that 3% of Harvard MBA graduates make ten times as much as the other 97% combined. How did they do it? They set goals and wrote them down – but don’t take our word for it, ask a Harvard MBA – or skip the lecture and give SMART a shot.
Reach out to us today to learn how we can help you achieve your business goals.