Setting objectives should be the first step in any business strategy, as without them, how can you measure success?
The key to setting good, useful objectives is to make sure they are SMART (Specific, Measurable, Agreed/Achievable, Realistic and Time-bound).
Without these elements, your objectives will ultimately just be generalised ‘goals’ with no focus. Here’s why SMART objectives are better:
- “Increase sales” becomes “Increase sales by 10% each month.”
- “Convert more leads” becomes “Convert 10 website leads per week by June 2015.”
- “Get more positive customer feedback” becomes “Achieve 99% positive customer feedback by January 2016.”
Now you have a yardstick to measure success. But how do you decide on these seemingly random details in the first place? Ask yourself:
What does your business need?
At its most basic level, your company needs to break even. What is that break even amount and how many sales/conversions does that equate to? Perhaps the business needs more than to break even because it seriously needs to invest in more resources.
What has your business done in the past?
If you have any data from previous months or years, draw upon those to see what sort of sales figures/conversion rates you’ve been getting.
However, if your sales have been increasing by 5% each quarter, you shouldn’t then set your objective to be achieve the same. Stretch yourself to 10 or 15%, but don’t expect to increase by 50% next time unless you are taking radical steps to do so.
What does your business want?
Breaking even is a good start, but making a profit is even better. Wouldn’t it be great to put away an extra £50k a year so that the business can start to grow organically? This could be seen as a luxury, but if it’s in the 5 year plan, why not work out exactly what it will take to get you there!
What is your business’ Mission?
Does your company aim to hold the biggest market share in its sector? Or would it sooner focus on being the most ethical and community-driven? This will have an impact on what objectives you should be setting, and whether they should be focused on sales or awareness.
Is it too easy? Or impossible?
Evidently you shouldn’t be setting objectives you’re never going to meet. Stretching expectations too high can cause more stress than necessary, and is generally demoralising for everyone involved.
Equally, however, they shouldn’t be so easy to achieve that you don’t need to try any harder. Never get lazy and just set the same objectives as last year/month, because it’s not going to help the business grow.
These questions should help you to formulate the specific numbers and metrics for your objectives. But that’s not all.
Here are some examples of what people often think are useful objectives:
- “Increase Twitter followers to 2000 by December 2015″
- “Increase e-Newsletter open rates by 5% each month” or
- “Increase website traffic by 30% per month”
However, these are NOT objectives; they are too narrow and don’t directly relate to how they benefit your business. Why does it matter if 100 more people open your e-Newsletter? There’s a number of other significant steps they would have to take in order for your business to see any benefit, such as clicking a link, exploring the website, filling in an enquiry form etc.
Yes, sending an e-Newsletter will increase brand awareness and will help towards achieving your sales and conversion goals, but it is more of a specific Tactic, rather than an overarching Objective.
Concentrate on the big picture when setting objectives, and remember to be as clear and precise as possible. You’ll only have yourself to thank later on when you want to see how far you’ve come and can easily measure your achievements.