by Russell

18/06/2013

Internet Marketing

Back to Basics – The importance of setting the right business objective

For any business wanting to improve the performance of their online marketing it’s crucial to clearly define success. Sounds obvious right? Pretty basic stuff.

Unfortunately, we typically find new clients either haven’t set clear business objectives, or they’ve set the wrong objectives. Here’s why you should care:

You can’t improve the performance of your website or online marketing if you don’t know what success looks like.

Typically we find that either there is no consensus on what success looks like or the objectives are complete rubbish:

  • Grow the number of links to our website by 5 per month
  • Reduce our Cost Per Click (CPC)
  • Improve engagement…

To whip clients into shape we use three easy-to-follow steps when setting business objectives:

Step 1 – Forget about technology

Business objectives should be just that business objectives (and not I.T. objectives). Put I.T. to one side and think about what makes a tangible impact to the business:

  1. Can senior management understand the business objectives?
  2. Will senior management get really excited about the business objectives?
  3. Do the business objectives impact the P&L (profit and loss)?

Lets look at some examples:

  • Grow the number of links to our website by 5 per month
  • -Doesn’t impact the company P&L and very unlikely to get senior management frothing at the mouth!

  • Double the number of high quality leads generated by the website
  • -Sexy! Senior management can definitely understand this, get excited about it and it will impact the P&L

    Step 2 – Make sure you separate objectives from tactics

    It’s important not to confuse your objectives with the tactics you’ll be using to achieve success.

    Lets look at the example I gave earlier:

    • Reduce our Cost Per Click (CPC)

    Lowering your CPC isn’t a business objective in it’s own right – Cost Per Acquisition (CPA), the cost you pay to achieve your goal, probably is.

    Lowering your CPC can be a great tactic to achieve a lower CPA but by itself is probably a red herring. You might even find that lowering your CPA requires you to increase your CPCs:

    • Higher quality traffic could cost more per click but actually lower your CPA because the traffic converts really well (see how setting the wrong business objective can be very counter productive!)

    Step 3 – Use quantifiable success metrics

    The key word here is quantifiable. Your business objectives should be measurable and ideally you should set a target:

    • Increase online sales revenue by 10%

    At this stage you might want to think about the cost of achieving the objective. Does there need to be a cap on the money being spent, for example a cap on the Cost Per Acquisition?

    • Increase online sales revenue by 10% with a maximum CPA of £10

    Sense Check– Will you get a pay rise?

    It’s always a good idea to sense check your business objectives. Will you get a pay rise if you hit the target i.e. is the objective REALLY something that will make people sit-up and take notice?

    If the answer is no then you need to think again. Go back to the drawing board and speak to senior management about what they would really like to achieve.

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