We all, periodically set targets for ourselves and/or other marketing folk. How often have we started the year with a plan that goes something like this:
- Do activities a, b and c,
- Through activities a, b and c, achieve the following “up-and-to-the-right”* targets:
Great, we’re all rich! But what I want to argue is there are two problems with this type of planning and target setting – a minor one, to do with the shape of this graph, and a major one to do with philosophy of super-ambitious targets like this (the graph above suggests a 40% increase in leads per month over 9 months, and still going up…).
Firstly, the minor point of the shape of this graph. Here’s what the graph above is actually saying:
- We currently get around 100 leads per month, and this is fairly predictable from January through to March.
- I’m going to do something very clever at the start of the year that’s going to increase this rate of leads to 105 in Apr, then 110 in May and so on. I.e. not only am I going to increase the number of leads over the current “standard, background” rate, but that increase is going to keep getting bigger and bigger each month.
- In theory this goes on forever – by the end of next year we’ll have doubled the monthly lead rate and so on in to infinity.
My issue is with the concept that the number of leads per month keeps getting bigger and bigger. In reality from the experience of running many, many campaigns, I’ve seen three types of chart:
No Impact Whatsoever
Sustained Change in Awareness of Product
The first chart obviously means that what we did didn’t work – fair enough, learn from your mistakes and try better next time.
The second shows that we did have an impact, and we did bring in more leads, but that when we stopped our activity the rate of new leads coming in each month dropped down to previous levels. This is a perfectly legitimate and potentially great result! If you managed to get 10 extra leads per month for 3 months (i.e. 30 new leads), if these cost $100 each to obtain (i.e. the “campaign” cost $3,000) and you actually made $200 per lead, then your campaign has given you an ROI of 100% ( ($6,000 – $3,000)/$3,000 ) – a great result! The issue of course is that once the campaign is over, you have to think of something else.
The third shows an impact whereby you’ve done some sort of activity and this has led to a sustained change in the number of leads coming in each month. They key point here is that previously, whatever marketing you were doing, you were bringing in 100 new leads each and every month. This is no mean feat – if we weren’t doing anything right and your product sucked, then we’d be getting zero new leads per month. So to increase this rate to 110 and to sustain this is a significant achievement. Obviously there’s a relationship here to chart 2 – if you’re carrying out extra activity that’s costing you $100 per lead and you’re managing to sustain that over time (i.e. the activity isn’t getting stale, such that new leads are diminishing), then that’s great. But ideally, you’ve done something as a one-off (say, a great set of new interesting content, easily findable by all), which is providing a long term increase in the average number of leads per month – definitely a great achievement.
So firstly, I have an issue with the shape of this graph. If we wanted to be really ambitious, I’d suggest that only graph #3 above (“Sustained change in awareness of product”) is what you should be suggesting – that you might be able to take the average monthly lead rate to a new plateau.
But secondly, and perhaps a bigger question, is how ambitious you should be. Really, when we’re setting these “targets” what we’re setting is objectives for the coming period. I’ve previously mentioned the great book Good Strategy/Bad Strategy by Richard Rumelt, and here Richard talks a lot about the need for good proximate objectives and how these objectives should be formed. Specifically, from chapter seven:One of a leader’s most powerful tools is the creation of a good proximate objective – one that is close enough at hand to be feasible. A proximate objective names a target that the organization can reasonably be expected to hit, even overwhelm.
The bit at the end is particularly interesting – “..even overwhelm”. But what’s the point in setting a target if it’s going to be so easy to hit, that we’d likely overwhelm it? That’s not going to stretch you or your team is it? You might as well switch on to auto-pilot for the rest of the year if your target is going to be so easy that you’ll overwhelm it? And it is counter to many performance management systems, not least Google’s! As pointed out in this blog post about Google’s OKRs:Always have goals that are uncomfortable to push you to achieve more. If you know for 100% you are going to achieve your objectives, challenge yourself more.
There seems to be a mismatch here between Richard Rummelt’s approach and Google’s.
Firstly it’s worth pointing out – the Good Strategy/Bad Strategy approach certainly doesn’t propose “do nothing” targets. In the example at the top, an objective which was “Just keep coasting maintaining a flat-line for leads” isn’t an objective, it’s just doing nothing! (ignoring the maintenance work required to keep these leads churning through of course).
What is being advocated is something where you genuinely believe that you will hit a given target. I like to think of this as “Would I privately bet my own personal money on us hitting that target?”. It tends to changes one’s view of a target if one has to stake one’s own cash on it! If you can answer “Yes!” to this question, then it’s a believable objective.
But still there’s the argument – couldn’t you have done more with a stretch target? An “easy” objective of say, getting 50 new leads though believable, is likely to get you just that – 50 leads, or thereabouts. But if you set an ambitious target of 100 leads, you might not believe it, but you might end up with 70 leads, or even 80, if you really “go for it”.
Firstly, there’s a minor problem I have with this – I just don’t believe this motivational model. That I or a colleague will be more motivated to achieve more, by setting an unrealistic target. I’ve never seen this happen in the real world. In reality, people are motivated by much more complex factors – who they work for, their colleagues, their interest in their work, whether their work chimes with their personal ambitions, the ability of managers to create an environment of ‘flow’, clear simple objectives for all and so on. Not by having a big red poster on the wall saying “Get me an impossible number of leads”.
But I think there’s also a major problem with this approach. For me, short term objectives are just stepping stones towards the long term goal of what we are trying to achieve. So if we were to get 50 extra new leads, this is a short term objective that is building towards a longer term of building your business, finding loyal customers to nurture, growing awareness, as well, of course, of generating revenue (for investment in the future of your business). So the short term objective isn’t the be-all-and-end-all. It’s a step on a long journey – and this is key. If you can’t predict, with any confidence that you’re going to hit that given target, how can you possibly plan for the future? If I set a target of 100 new leads, and then start building future plans based on that new revenue (e.g. hiring new staff), what happens when I miss that target? I have quickly re-jig my plans, rushing through changes, based on my (predictably) failed targets. We haven’t built any solid blocks for the future, instead we’re back to panic planning.
In contrast, if we go for a lower target, and by tracking as we go along, see that we’re nicely moving towards hitting that target then, as we approach the end of the year, we can put our next set of plans in to place in a more measured fashion. Much more stable, much more predictable and, I’d argue, a bit moregrown-up than random objectives that no-one ever believes.
This is why, for me, setting realistic objectives for the coming period is key, and why hopefully those big red “up-and-to-the-right” charts are a thing of the past.
* Last week I heard someone use “up-and-to-the right” as a verb as in “How are we going to up-and-to-the-right that value?”! It seems the English language abusers attempting to “verb-ify” every word aren’t even sticking to single words now!