We speak to many companies during our day to day business, whether we are writing their business plan or not. There are so many of them that can not answer the basic question “What does success look like in 1 year, 3 years and 5 years’ time?”
Frequently the answer is “erm”.
If you don’t have an objective, how do you know if your business is performing as you want it to? There are various ways of setting your objectives. It could be in terms of revenue, profit, numbers of customers, numbers of repeat customers, products sold, consultancy days charged for… the list goes on as to what can be measured. The other axis is time. Yep a good old SMART objective – something that is specific, measurable, achievable, realistic and timed.
It may seem boring relying on them, but they have been around for a long time because they give results. The results to make your business successful. Examples could include:
- To open the second office / location within the next 18 months.
It is a specific activity which is definitely measurable. Whether it is achievable depends what stage your business is at, what the economy does and so on. Is it realistic? Well yes opening a second office is a realistic ambition to have and there is a time scale on there.
- To generate 1million enquiries from the UK market in the next 3 months.
We did have a prospect who wanted this as a measure for a campaign. When it was queried as to why this was necessary, the prospect said because of the conversion rate. So instead of looking at why the conversion rate was so low, they wanted an enquiry rate that was so high that in their target sector everyone would have to enquiry not once, not even twice but FIVE times each. The objective was not SMART and there was no way that there could be success. They were convinced to look at marketing tools to move enquiries through the funnel and increase the conversion rate to get the amount of sales needed, so the SMART goals looked something like this instead:
- To introduce a marketing automation system for lead nurturing within the next 6 months.
- To increase the conversion rate from enquiry to qualified lead from 0.01% to 1% within the next 12 months.
- To increase the conversion rate from qualified lead to quotation from 1% to 10% within the next 12 months.
- To increase the conversion rate from quotation to sales won from 5% to 30% within the next 12 months.
Yes the marketing team was busy putting in place all the necessary sales enablement tools to achieve these aims, but the overall marketing budget was reduced as a result whilst increased sales were attained, so profitability was a larger increase than revenue.
If you are a café or pub owner, it may be that you want to increase the average price paid per drink by 5%, not by increasing prices, but by upselling from a filter coffee to a latte, from a glass of house white to a glass of Pinot Grigio, and so on. Or you may say that you want the number of people who buy a cake / snack / pack of crisps / bar meal along with their drink goes from 10% to 15% within 6 months.
For a business to succeed, there has to be a vision of what success looks like. If you do not know what success looks like for you and if it is achievable then you may spend time and effort in the wrong areas causing unnecessary stress, and no one wants to do that!