Setting objectives and key performance indicators (KPIs) is essential for any business that wants to remain competitive and achieve long-term success.
Establishing objectives and KPIs for your business can seem like a daunting task, but it doesn’t have to be. By following a few simple steps, you can ensure that your objectives and KPIs are properly aligned with your business goals.
Objectives and Key Performance Indicators: Quick definition
There’s a lot of confusion around objectives and KPIs. What’s the difference and how do you set them?
Objectives are the goals that you want to achieve.
KPIs are the metrics that you use to measure whether you’re achieving your objectives.
Both are important, but they serve different purposes.
Objectives provide a sense of direction and ensure that everyone in the organisation is working towards the same goals.
KPIs provide a way to track progress; to identify areas of improvement; and to gauge whether objectives are being met.
How to set objectives and KPIs for your business
Start by defining exactly what you want to achieve. This includes defining your overall business strategy, your brand values, and your customer personas.
In order to set marketing objectives, you must first understand what your business goals are.
“What are you hoping to achieve with your business?”
Begin by asking yourself what you want to accomplish in the short-term and long-term.
Do you want to increase sales, market share, or profitability?
Once you have a clear understanding of the goals, you can then begin to develop objectives and KPIs that will help you achieve them.
Once you’ve identified your goal, you can start thinking about how to measure it. For example, if you’re trying to increase sales, you might track the number of new customers or the total revenue generated each month.
Once you have your goal and metric in mind, you can start thinking about how to improve it. This might involve implementing new sales strategies, improving your marketing efforts, or making changes to your product or service. Whatever you do, make sure you track your progress so you can see how well your efforts are paying off.
What Are Marketing Objectives and Goals?
Objectives provide a sense of direction and ensure that everyone in the organisation is working towards the same goals.
Goals are somewhat aspirational in nature. A company goal might be to double sales revenue. However, these big picture goals are often difficult to measure. That’s why it is helpful to break goals down into realistic and measurable objectives.
Defining marketing objectives
Marketing objectives are the goals you set out to achieve within your organisation. They help you define what you want to accomplish during a certain time period. In addition, they provide a framework for measuring whether you’re succeeding or failing.
Marketing objectives are defined as “the desired outcomes of a specific marketing campaign.” They are usually expressed in terms of measurable goals such as increasing revenue, reducing costs, or improving customer satisfaction.
The key questions are:
- Why do you want to achieve those goals?
- What problem does the objective solve?
- Why should someone care about solving that problem?
A good atarting point when you’re developing your marketing objectives, is to consider if they are DUMB!
- Doable
- Understandable
- Manageable
- Beneficial
If they’re too weird, you won’t be taken seriously. If they’re not specific enough, nothing will get done. If they’re not interesting enough, people won’t care. Choose realistic goals that are easy to measure and deliver value to the business.
For example, let’s say you’ve been contacted by a small restaurant chain called “Joe’s Pizza Place”. They’ve been growing steadily over the last few years, but now they’d like to take things to the next level. Their sales department wants to come up with a strategy to increase revenues by 10% over the course of the next 12 months.
To get started, you might ask these questions:
- Do they want to grow because they think people will love their pizza place more?
- Maybe they want to open another location to increase brand recognition?
- Or do they just want to make more money?
Consider what metrics you will use to measure your objectives. It’s important to keep in mind that objectives should be specific, measurable, achievable, relevant, and time-bound in order for the company to know if they are on track.
Objectives should be reviewed and updated on a regular basis to ensure that they remain relevant and achievable.
Remember:
- Objectives should be specific, measurable, achievable, relevant, and time-bound.
- Objectives should be aligned with the organisation’s strategy.
- Objectives should be ambitious yet realistic.
There are many benefits to having objectives and KPIs in place within an organisation.
- They allow for clear and measurable goals to be set
- Help to improve communication within the organisation
- Can increase productivity (as everyone will be aware of the objectives and KPIs)
- Identify areas of improvement within the organisation
Having objectives and KPIs in place is vital for any business that wants to be successful.
Why do you need marketing objectives?
As a business owner, it’s important to have a clear understanding of what you want to achieve, and how you’re going to get there. This means setting objectives and key performance indicators (KPIs) for your business.
Marketing objectives are important because they help align your efforts across channels and campaigns. They provide direction for what needs to happen to meet the goals of the organisation. But setting objectives without considering how those objectives fit into the larger picture can lead to wasted resources and ineffective campaigns.
The most common mistake I’ve observed marketers make is setting objectives based solely on what they want to accomplish rather than what the company needs. This happens when marketers set themselves up for failure by ignoring the bigger picture.
Another reason why marketing objectives aren’t successful is that the people responsible for setting them don’t understand the broader context of the business. For example, if you’re working on developing a new product launch, the objective might be to generate £1 million in revenue during the next quarter. However, if the goal is to develop a long-term strategy for the product, you’ll need to consider things like customer acquisition costs, pricing, and profitability.
There are many times we see clients set arbitrary marketing objectives that do little to address the success of the company and don’t contribute to the larger vision. These would be objectives like generating 100% growth in website traffic for the year or launching a social ad campaign to increase the number of likes and follows on Instagram and Facebook. Marketing objectives need to have a positive effect on the bottom line and the organisation as a whole. They must be supported by other departments such as the sales teams, finance, legal, etc, for them to be considered relevant.
How to Set Marketing Objectives?
There are a few different ways to set objectives for your business. One way is to use SMART objectives. This is an acronym that stands for Specific, Measurable, Achievable, Realistic, and Time-bound.
Specific.
This means that you should have a clear idea of what you want to achieve.
Measurable.
This means that you should be able to track progress and identify whether or not goals are being met.
Achievable.
This means that you should set realistic goals that can be attained.
Realistic.
This means that they should be aligned with the overall goals of the organisation and within reach.
Time-bound.
This means that you should set a deadline for achieving goals.
The SMART method can be helpful in ensuring that your objectives and KPIs are properly aligned with your business goals.
Apply the RACE Framework to streamline your marketing objectives
The RACE framework helps businesses understand how customers interact with brands, products and services over time. This allows marketers to develop intelligent strategies based on real-world customer behaviour.
By applying the RACE framework to your marketing objectives, you can better understand the needs of your prospects and customers, and use that knowledge to craft effective campaigns.
With the RACE framework, you’ll know exactly where your audience is in the buying cycle, what actions they take next, and whether those actions lead to conversion. You’ll also see how each step of the process impacts your ROI.
In addition to helping you plan, test and refine your marketing efforts, the RACE framework provides insight into the best times to market and offers guidance on how to build relationships with your target audiences.
What is the RACE framework?
The RACE framework is an acronym for:
R – Recognition
A – Awareness
C – Consideration
E – Evaluation
It’s about understanding how customers perceive, evaluate and respond to brands, products and services. The framework was developed by Dr. Michael Porter at Harvard Business School and has been used extensively by companies around the world to improve their marketing performance.
How does it work?
The RACE model consists of five stages that represent different points along the buyer journey. Each stage represents a specific action a consumer takes after becoming aware of a brand, product or service.
Recognition (R)
This is the first stage of the buying process. It occurs when someone becomes aware of a brand, service or product. In this phase, consumers start looking for information about the brand, product or service online.
This could include researching reviews, reading articles, watching videos, listening to podcasts or visiting websites. As soon as a potential customer recognises a brand, he or she will begin evaluating it.
Awareness (A)
Once a person recognises a brand, he/she may become more interested in learning more about it. At this point, the prospect begins considering purchasing the product or service.
Consideration (C)
At this stage, people are actively thinking about making a purchase. They’re weighing their options and considering which option might be right for them.
Evaluation (E)
Once a decision is made, the prospect moves from consideration to evaluation. During this stage, the prospect decides if the product or service meets his or her expectations. If not, then the prospect moves back to the awareness stage.
If the prospect makes a purchase, then the sale is complete.
Why should I care about the RACE framework? How does it help me?
Understanding the RACE framework gives you a clear picture of your customers’ behaviours and helps you identify the most appropriate ways to reach them. By knowing where your customers are in the buying process, you can design targeted messages that resonate with them.
You can also use the RACE framework to determine the best time to launch new products and services. This way, you can avoid launching too early or too late.
By using the RACE framework, marketers can gain valuable insights into the effectiveness of their current marketing strategies.
Marketing objective examples
Grow Brand Awareness
Think about the various ways you can promote yourself. You could pitch yourself to local media, submit articles to industry publications, create a podcast and interview people or show up on social media every day.
- An objective could be: interview 10 people I admire in my space. Release a show each week for 10 weeks.
If you are just starting out, it’s important to keep things simple. Focus on building your brand name and increasing awareness about your product or service. You don’t want to spend too much money promoting yourself, because there are plenty of competitors already doing that. Instead, focus on growing your brand awareness and making sure that people know what you do. This way, you won’t end up spending money on advertising that doesn’t generate results.
Related: Repositioning your brand with a content strategy can be a part of setting KPIs and marketing objectives.
Improve Lead Generation
Do you want to increase the amount of leads you generate each month? Maybe you want to improve the quality of those leads? In this case your objective could be:
- to improve the quality of your leads by making changes to your marketing funnel. Your target might be to increase qualified leads by 10% after 3 months.
This is an interesting objective as it forces you to make changes to some of your other content marketing activities. You’ll also need to make sure that you’re targeting the most relevant audiences possible, since those are the ones who are likely to convert into paying customers.
Reduce Customer Churn
- Reduce customer churn by 5% within 6 months by improving the customer experience.
If you are looking to increase revenue growth while reducing costs, it makes sense to keep your current customers happy. This applies to both B2C and B2B companies. In fact, many retailers use retention strategies to increase profitability. However, there are some key differences between retaining customers and acquiring new ones. For one thing, retention requires less effort. You don’t need to spend money on advertising; you just need to make sure your products and services meet the needs of your customers.
In addition, retention efforts typically require fewer resources. You don’t need to hire salespeople to sell to your current customers. Instead, you simply need to ensure that your product or service meets their expectations. If you are able to do this effectively, you won’t need to invest much in customer acquisition. However, if you fail to retain your customers, you could end up losing them to competitors.
Promote New Products or Services
- Book 100 appointments within 30 days of running paid ads.
When you think about your marketing strategy, chances are you’re thinking about what you want to achieve. You might be planning promotions, advertising campaigns, events, or sales. But there’s another important element to consider: how do you plan to promote it?
A good marketing roadmap helps you make sure you’re focusing on the most critical initiatives while avoiding wasting money and resources on low-priority activities. This includes defining your overall goals and strategies, setting your priorities, and creating a timeline for achieving them.
Increase Your Digital Profile
- Add 1,000 social media followers in 30 days.
- Drive a minimum of 1,000 people to my website each month.
If you are just starting out in your career, it may seem like a daunting task to build up a strong online presence. Set realistic targets. Most websites get very little traffic and most social media profiles have less than 1,000 followers. But, don’t let that stop you from growing your brand online. When it comes to building a solid digital presence, there are several key strategies that can help you achieve your goals.
The first step to getting started is to identify your target audience. You want to know what type of people are searching for products and services similar to yours. Once you have identified your target market, you can begin creating content that aligns with their interests. This could include blogging about topics related to your industry, publishing videos, or developing eBooks. To make sure that your content is engaging enough to keep readers interested, you may want to consider hiring a freelance writer or editor to help you craft your content. By providing high quality content, you will be able to attract potential customers to your site and eventually convert those visitors into paying customers.
Once you have built up a good amount of traffic, you will want to optimise your site for search engines to ensure that you rank highly in search results. One way to do this is to use keywords throughout your webpages. Finally, one of the most effective ways to improve your search engine rankings is to participate in local events and groups. Local events often provide opportunities to connect with others in your area and gain exposure to a wider audience. For instance, if you run a restaurant, you might host a food tasting event where guests come to sample different dishes.
Why should you care about marketing KPIs?
The term “KPI” is thrown around quite often in marketing circles, but what does it actually mean for your brand? Why are they important? How can you use them to measure the effectiveness of your content marketing efforts?
What are key performance indicators (KPIs)?
KPIs are metric-based indicators that businesses use to track progress towards their objectives and identify areas of improvement.
Once you have a good understanding of the business goals, you can start to break them down into smaller, more manageable pieces. From there, you can start to set KPIs that will help you measure progress towards those goals. This will ensure that everyone is working towards the same thing and that progress is being made in the right direction.
KPIs should be reviewed on a regular basis to ensure that they are still relevant and effective. By doing this, you can make sure that your organisation is always moving forward and making progress.
What is a metric?
This one is simple. A metric is a number. That’s it.
For example: you have a conversion rate of 4.3%. The conversion rate is what you are measuring, therefore it’s the KPI. The 4.3% is the metric used to report the conversion rate.
How to measure marketing KPIs
There are many ways to measure content marketing KPIs, and there isn’t one best answer. However, we suggest starting with three main areas:
- Engagement – How much interest does your content generate? Or, do people actually read your content (as opposed to impressions and page views).
- Conversions – What percentage of customers ‘convert’ by taking a pre-determined action.
- Revenue – Are you generating enough qualified leads to justify your marketing budget?
Once you’ve defined your KPIs, it’s important to align them to broader business goals. You’ll find that most companies use some form of annual planning process to help them do just that. When you’re developing your content marketing plan, it’s worth considering whether you’re doing anything else similar to this. If you are, it might be useful to compare your plans against each other.
You’ll also need to think about how you’re measuring your progress. Are you looking at the same data points every month? Or are you trying to spot trends over longer periods of time? These questions will help you decide where to focus your efforts next.
How to set KPIs
Once you’ve decided what you’re trying to measure, it’s important to make sure that the metric is actually useful and meaningful to everyone involved. Here are three things to consider:
1. Time frame
You’ll probably want to look at this over a longer period of time, such as 12 months, rather than just one month. This way you can see whether your efforts are having a positive impact on your overall performance.
2. Growth rate
This is really up to you, but we recommend looking at it over around six months. If you’re planning to use this data to justify budget increases, for example, then you might want to look at something closer to a year. However, if you’re planning to use it to show progress to your boss, then maybe go with something shorter like half a year. You don’t want to give yourself too much room for error here.
3. How you’re going to achieve your desired outcome
If you’re hoping to increase followers, then what do you plan to do once you reach your target number? Do you have a content plan? Whatever you decide, make sure that you communicate this clearly to anyone else who needs to know. Otherwise, you could end up with nothing because no-one knows what they’re supposed to be doing.
How to set channel-specific KPIs
The most important thing about setting KPI’s is to ensure you are measuring what matters to your organisation. You want to know how well your efforts are performing against your objectives. This helps you understand where you need to make changes and whether those changes are working.
There are many ways to measure success across the full marketing mix. You might use one metric for lead generation, another for sales conversion, and another for customer retention. Or you could look at multiple metrics in parallel. For example, you might track leads generated per day, calls answered per hour, and number of customers retained over time.
You could even look at specific components of the marketing mix such as social media campaigns, email marketing, paid advertising, etc.
In large companies, there may be several people responsible for running particular channels. Each person needs his/her own set of KPIs. If you’re managing a small marketing team, however, you’ll probably work together to develop a shared set of KPIs.
For example, you could decide that everyone in the group will report on the same key performance indicators for Facebook ads, for instance. Then, you can compare the data across the team to see how well you’re doing.
1. Set a single sales target that aligns with your marketing goals
When you set your marketing goals, make sure that those goals support your overall strategy and objectives. You want to achieve both. This way, you’ll know whether your marketing efforts are working towards increasing sales or conversions.
2. Determine your marketing targets by channel
As you create your marketing goals, it helps to know what your target audience does online. You’ll likely have different targets for each type of channel. This way, you’re always focused on the most effective ways to reach your customers. Here are some examples of how you might approach this task:
- Facebook – Increase brand awareness, gain leads, build relationships with potential customers
- Instagram – Grow your following, increase engagement
- Twitter – Drive sales, promote events
- YouTube – Create videos that educate, entertain, inspire
- LinkedIn – Build connections, find jobs
- Pinterest – Promote products, generate leads
3. Break down your goals into monthly and quarterly targets
When setting out to build a successful business, there are certain milestones we want to hit along the way. We set out our yearly goals, but what about those intermediate steps? What about the quarterly goals?
The problem is, most people don’t break down their goals into monthly and quarterly milestones. They just see the big picture goal and think “I’m never gonna reach that.” But that’s where you’re wrong. You can actually do it. And here’s how:
- Set monthly and quarterly goals.
- Make sure you know exactly what you want to accomplish every month and quarter.
- Don’t let anyone tell you that it’s too hard.
- Celebrate your successes.
- Be realistic about your progress.
10 Marketing KPIs You Should Be Tracking
Many marketers track the same common KPIs. However, there are several other marketing KPIs that can help your business measure and track success (or failure!).
If you track the right marketing KPIs for your company you will be able adjust your tactics and budget accordingly. If you don’t, you might end up making decisions based on incorrect information.
Which ones will you track?
1. Marketing revenue attribution
How much revenue do your digital marketing campaigns generate for your organisation? If you don’t know, it’s time to find out.
In other words, how much revenue can be attributed to each of your content marketing campaigns? With this information, you can better understand what your content strategy is doing for your business.
No company wants to spend money without knowing whether it’s getting value for money. So, if you want to increase your ROI, make sure you’re tracking sales growth.
2. Customer acquisition cost
Customer acquisition cost (CAC), often referred to as the “cost per new customer,” measures how much it costs to acquire a new customer. With digital marketing, that might include everything from advertising campaigns to creative design to paid social media posts.
The formula for calculating CAC is pretty straightforward:
“Total Sales + Marketing Costs” divided by Amount of New Customers.
For example: If our total costs = £50,000 and we acquire 1,000 new customers, the CAC is £50 (50,000 / 1,000)
In addition to measuring the amount spent acquiring each customer, CAC also helps marketers identify where their biggest opportunities exist. If you see that your greatest return is coming from mobile ads, for example, you’ll know that you need to allocate more resources toward creating those types of ads.
3. Customer lifetime value (CLV)
What Is CLV? Simply put, CLV is the total amount of money a company expects to receive over the course of a single customer’s lifecycle. This includes all costs associated with retaining customers, including product upgrades, service contracts, and any other recurring fees.
Customer lifetime value (CLV) is a vital metric for businesses looking to maximise profit.
Why Do Marketers Care About CLV?
As we mentioned earlier, CLV is a key metric because it allows companies to determine which products and services they should invest in. It also gives them insight into how effective their current marketing efforts are.
4. Calculating the marketing ROI
Every company wants to see a positive return on its investment in marketing. But calculating your ROI is crucial in determining whether it makes sense to keep investing or change course.
The calculation requires three key components:
- Your total marketing spend
- The number of customers you acquire
- How much revenue you generate per customer
Example: £50,000 spent over 12 months acquiring 100 customers generating £200,000 in total revenue. The acquisition cost is on average £500. But each customer on average generates £2000 in revenue.
5. Traffic-to-lead ratio (new contact rate)
Understanding your website traffic, especially how much of it is coming from each channel, is extremely important — no matter what type of marketing campaign you’re running. Knowing where your visitors are coming from helps you understand how well your campaigns are performing and allows you to make adjustments accordingly.
If your traffic is steady or growing, but your traffic-leads-to-conversion ratio is low or declining, that’s a sure-fire sign that something is wrong on-page. There could be a number of reasons for this, but one of the most common is misalignment between the information users expected to see and the information they actually saw. This happens because there isn’t enough alignment between the copy on your site and the keywords people used to find you.
You might also be showing them too much information, or the information they did receive wasn’t relevant to their needs. For example, if someone searches for “best mattress,” you probably don’t want to show them a list of every bed manufacturer out there. But if they do happen upon such a list, you’d better hope they stick around long enough to read about the features of the product they’re interested in.
6. Lead-to-customer ratio
You’ve probably heard about the term “lead generation.” But did you know there are different types of leads? And what does each one mean? Here’s everything you need to know about leads.
Lead Types: There are four main types of leads:
- Sales Qualified Leads (SQL): These are leads who meet certain criteria. They’re typically interested in buying your product or service.
- Sales Accepted Leads (SAL): This type of lead doesn’t qualify for a sale, but you still want to follow up with them because they might become customers later.
- Pipeline Leads: These are people you haven’t contacted yet, but you’d like to talk to eventually.
- Marketing Qualified Leads (MQL): These are leads generated by marketing campaigns. They usually don’t qualify for a sale or contact, but they could potentially convert into a customer down the road.
7. Landing page conversion rates
Landing pages are one of the most important parts of any marketing campaign. The goal of every landing page is to encourage people to take action. They’re what converts visitors into leads, and they’re often the first thing people see when they arrive at your website.
So, how do you know whether or not your landing page is converting? You can use a tool like Google Analytics to track conversions.
8. Organic traffic
Inbound marketing is a strategic approach to attracting and converting leads into customers. It’s about creating content that attracts the right audience, engages them with your brand message, and converts them into paying customers.
Website Organic Traffic is the amount of visitors that come to your site from organic search traffic. It’s a great way for you to measure how well your content is performing, and it can be used as an indicator of whether or not you should invest in SEO.
For example, let’s pretend you’re developing a website for a local plumber. When someone searches for “plumber,” they might discover the following range of articles:
- A local plumber listing their contact information.
- An article about how to choose a plumber.
- A blog post written by a professional plumber.
- A review site where customers can write reviews about their experiences working with different plumbers.
- A news story about a plumber being arrested.
- A video showing a plumber fixing a leaky sink.
Which of those (if any) will be relevant for your business? When you’re creating content for your website, you need to learn the importance of keyword research and also how to understand search intent.
Did you know: planning a year’s worth of content can be a part of setting KPIs and marketing objectives.
9. Social media traffic and conversion rates
Social media is one of the most powerful tools marketers use today. It’s used across industries, including B2C and B2B, and it helps brands connect with customers and prospects in meaningful ways. But many companies still struggle to measure social media KPIs. We know that social media plays a major role in driving traffic and converting visitors into leads, but there are some important metrics that help us understand exactly what those numbers mean.
For example, let’s say you want to find out whether Facebook ads work better than Instagram posts. You could simply compare the average cost per acquisition (CPA) for both channels. If Facebook ads generate five times the volume of leads compared to Instagram, that might indicate that Facebook is worth investing in. Or maybe you’d like to see how effective Twitter is compared to LinkedIn. In this case, comparing the number of followers versus connections you have on each network could provide insight.
10. Mobile traffic, leads, and conversion rates
Most smartphone users (about 80% according to Outerbox), have purchased something online recently, using their phone. So, if you’re not optimising your site for mobile, you could miss out on sales opportunities.
With so many people browsing the net exclusively from their smartphones and tablets, and Google showing a clear preference for sites optimised for mobiles, you need to know where your visitors are coming from.
Pay special attention to:
- Mobile traffic
- Leads generated from mobile devices
- Conversions from mobile devices
Conclusion
Setting KPIs and marketing objectives is an essential part of developing a successful marketing strategy. Without these key pieces of information, it’s impossible to know whether or not you’re achieving your desired results.
There’s no one-size-fits-all answer to setting objectives and KPIs. It will vary depending on the business and what’s important to them. However, by following these steps, you can develop objectives and KPIs that are properly aligned with your business goals. This will help you track your progress and ensure that you are on track to achieving your desired results.
No matter what route you decide to take, remember that setting and achieving business goals is a process that takes time and effort. Rome wasn’t built in a day, and neither is a successful business.
