Setting Objectives: What so many executives get wrong!
There is SO MUCH CONFUSION among executives and marketers alike about what appropriate objectives are for marketers and marketing tactics. When you and your organization are not clear on the different levels of objectives and how they support and direct each other, confusion reigns and often marketing is asked to prove how their activities (marketing tactics) are growing sales (business objective) which is frustrating for everyone.
Here’s a guide to setting objectives at each level of the organization.
Business Objectives: SALES, MARKET SHARE, PROFITABILITY
Business objectives exist at the level of the enterprise. Business objectives include things like increase revenue, grow sales/share, increase profitability. One of the biggest sources of frustration within organizations occurs when business objectives (grow sales) are assigned at the marketing strategy or tactic level. While marketing is 100% a tool that can and should be used to grow sales, it does not bear sole responsibility for growing sales.
Strategic Objectives: TRIAL, REPEAT, BUY RATE
Strategic objectives exist at the level of the marketing strategy. They describe how you plan to achieve the business objectives. There are three types of objectives that you can have as marketing objectives: Trial (or household penetration of your product or service), Repeat (how many consumers are purchasing again), or buy rate (how many units consumers are buying at once). The choice of marketing strategy objective is critical in helping you determine which marketing tactics will best serve you.
Marketing Tactic Objectives: AWARENESS, CONSIDERATION, CONVERSION, ADVOCACY
Marketing Tactic objectives exist at the level of your marketing funnel/consumer journey (awareness, consideration, trial, advocacy). They measure how likely your marketing tactic is to help achieve your strategic objective(s). For more on how to measure the impact of your marketing tactics here.
Let’s look at an example ‘in the wild’. I saw (and loved) this out of home advertising from Banza on the T in Boston this summer.
The business objective of this piece of marketing (as for many pieces of marketing) is clearly to drive sales. There is also a clear strategic choice in this execution–to drive trial. We can see that this execution is designed to drive trial (new consumers), as it promotes the taste of the product–which anyone who had tried the product would already know about. And, while outdoor advertising of any kind is likely to drive some awareness, these ads seem to be focused squarely on consideration: they focus on the taste of the product way more than what the product is (pasta made from chickpeas) or the other attributes it contains (gluten free). One could argue that these ads could be pushing toward conversion (sales), but the fact that they’re in the T where a purchase is conceivably several actions away for a consumer, I’m sticking with consideration.
Therefore, if I was running Banza’s marketing department and the CEO asked me to prove that my very amusing out-of-home advertising in Boston was driving sales, I would remind them of the cascade of objectives–”We know we want to drive sales of Banza in Boston and we want to do that by capturing new consumers. One of the biggest barriers to consumers purchasing our product is that they are unsure of the taste. (Assuming this campaign was larger than the single T car I experienced on my day trip into the city…) we can measure the impact of our campaign by measuring attitudes toward our product (specifically its taste) among aware, non-users of the product in Boston and identifying whether they are more favorable after the campaign than they were before. So, we won’t be assigning a dollar sales value to this specific tactic, but let’s talk about some of the conversion-focused tactics we’re doing (in store, online) and how those are performing.”
Will that explanation satisfy the CEO? Who knows? Is it rigorous, thoughtful, and indicative of a marketer who knows their stuff? Hell, yes.