The 4-step method companies can use to set viable business goals and measure success.
Тhe biggest point of frustration for internal stakeholders in Sales and Marketing is when the goals are unrealistic. The biggest point of frustration between service providers that support these departments is when business goals are unrealistic.
More often than not, desired business results are difficult or impossible to achieve because there is a disconnect between the people setting the business goals and the people executing on them. This is nobody’s fault, of course. The problem is that there is a lack of a framework to be able to communicate and evaluate if an objective is truly attainable.
There is often a disconnect between Executives, Marketing, Sales and Technology. The executive team is typically removed from Marketing goals such as being able to develop a marketplace and fill a sales pipeline with prospects. Marketing is typically removed from Sales goals such as being able to close deals and drive revenue. Technology is typically removed from Marketing and Sales needs such as unifying data and reporting.
There is often a disconnect between internal stakeholders and third-party service providers that facilitate marketing and sales goals. When outside vendors are not aligned with the company objectives, they might suggest or employ tactics that are not applicable in your specific case. Without the correct technology to measure vendor performance, your company will not know with certainty whether the tactics are effective from a business point of view or not.
So, before setting business goals or choosing any particular set of tactics to be carried out, a company needs to achieve a very delicate balance between the people, processes and technology involved in customer acquisition + retention.
Now, let’s imagine for a moment that your company wants to gain market share. The objective could be articulated like this: “We want to grow our sales by 30%.” But is this clear enough?
What does 30% mean? Is it a 30% increase across all product lines or are there specific product lines that your company wants to grow because they make the majority of your sales? Most companies are unable to define with specificity where, why and how much they expect to, for example, grow their market share. This leads to unrealistic business goals and frustration across the organization.
The solution to unrealistic business goals is specificity.
Ideally, a company should be able to set business goals like so:
“We want to raise our revenue by 30% and we know that 3 of the 5 product lines that we have, that make up 85% of our revenue, are in a period of flat growth or no growth. That’s why, when we say that we want to raise our revenue by 30%, we’re expecting to see that growth in the other 2 product lines which have not grown to their full potential yet.”
The four-step goal setting process described below is what SMARTech Converged companies employ to clarify their objectives.
When working with a client, what I like to do is take the entire company revenue and break it down into revenue stories per service, per product, or per product line so I can understand how much each product or service contributes financially.
Once you create the revenue stories, you can calculate the baseline for each product, service or category. Then, you can analyze the trending data and determine if there is a decrease or an increase in performance.
Whenever your company is experiencing expansion or degradation in market share, it’s usually due to one or more of these factors:
These factors are crucial to be able to know because they will help you see clearly your potential for future success and future failure.
At this point in the goal setting process, it will be clear where your company is investing and it will also be clear what returns it’s reaping for the investments. You can then overlay last year’s marketing spend and last year’s sales focus in terms of efforts and dollars and see how that corresponds to products or categories that are growing.
Consider the following situation: Your analysis shows a degradation in revenue performance on a certain channel, or a certain category, or a certain product line while the dollars invested in marketing, people or sales enablement stay the same. This product line makes up 85% of your company’s overall sales. There are 3 more product lines.
This degradation could be due to a stagnant or contracting marketplace. To determine whether it’s a marketplace problem, a people problem, a process problem or a technology problem, you can benchmark the marketplace against internet search trends and other market research data.
For the purposes of this example, let’s imagine that you discovered the marketplace is contracting. The marketing spend is the same, the sales focus is the same and sales for this product line are going down year over year. Research has confirmed it’s a marketplace problem.
By understanding with specificity why your sales are diminishing, you can throttle down the resources in that space and invest in other channels or other product lines that have the potential to make up for the loss of market share. This will not be a subjective decision because it will be grounded in data and research.
Going through this process, you eliminate reasons for failure and you are able to see the root cause of a problem and you are able to see the reasons for your company’s success. Based on this information, business leaders can decide where it makes most sense to direct the marketing and sales efforts.
Being able to evaluate performance per product, product line or category and being able to make investment decisions based on this evaluation is going to empower CFOs. They will have certainty that they are not throwing good money after bad products. They will be able to invest or divest based on performance and they will be able to analyze trending data in the future.
The CEO is going to be able to communicate more effectively with external shareholders and the board because they will be able to lay out the reasoning behind specific sales or marketing decisions that were made. He or she will be able to back up this information with data and relay it in a manner that is easily understood and makes business sense.
Assessing performance across all of the products and services that your company offers, year over year, has numerous benefits. It helps:
Through SMARTech Convergence, your company overcomes the biggest hurdles in goal setting—internal and external disconnect, and it achieves complete alignment before setting goals and executing on tactics.
In a SMARTech Converged company, internal stakeholders in Marketing, Sales and Technology Departments are operating in concert with the overarching business goals; third-party service providers are able to better execute against what it is they have to achieve from a business perspective. The company is able to better measure vendor performance because the necessary Technology is in place.
Have the Courage to Prioritize Progress.
