Quantity vs Quality: The importance of goals in your business
by Brian York, AIM.
At the tender age of 15, Michael Phelps set a goal to win one Olympic Gold medal. Last night he crushed the field in the 200M Individual Medley… for gold medal number 22. With 13 wins in individual events he has surpassed a 2,168 year old record held by Leonidas of Rhodes to officially become the greatest Olympian of all time.
Phelps once said, “I think goals should never be easy, they should force you to work, even if they are uncomfortable at the time.” Which brings me to my topic today… what are your goals as a marketer? If you have to stop and think about that, perhaps you should stop reading right now and write down 5. What are 5 benchmarks you need to meet or exceed to propel your business faster and further than ever before.
A moment to think about goals…
Thanks for sticking with me. As direct response marketers, we need goals to understand the meaning of success. In an industry where testing should be constantly on our minds, how can we test if we don’t have any figures to benchmark against? How can we set goals if we don’t know where we are right now? We can’t, plain and simple.
Over the years, I’ve noticed a lot of goal setting focused on the short-term growth of the business. Short-term goals are fine, but they should be paired with the long-term goals and they need to be absolutely aligned with the long-term direction of the business.
Let me explain by example. Many years ago I worked with a business that had been struggling for multiple years and we just couldn’t figure out the problem. Finally, after pulling our hair out for months (and yes, I am bald), we dug into the source of new leads coming onto the list. The majority of new leads were coming from Google Adwords. But over the span of 3 years the composition shifted from 90% U.S. & Canada / 10% International to 90% International / 10% U.S. and Canada. The list was unresponsive because the majority of the leads coming onto the list were not in the target market for the publication.
Let’s dig in a bit more. Goals were set – the marketer had a goal of bringing on X number of names at a predefined cost per acquisition (CPA). Goals were met – but was it a success? No… there was no long-term goal associated with the acquisition goal. That long-term goal should have been, “Do long term metrics of these names meet or exceed my historical benchmarks from this channel?” That is: 1) Do the leads convert to customers at an acceptable rate, 2) Do they refund at a higher rate & 3) Is the lifetime value (LTV) in line with other channels?
More latestly I had a call with another, fairly new, business that was diversifying their lead generation channels and found great success with a new source. This source was bringing in hundreds of thousands of names at a fraction of the cost of other sources. The ROI looked good; it doesn’t take many sales to have a positive ROI when the CPA is next to nothing. On the surface this looks good right? Wrong.
The marketer cast a very wide net and ultimately found a few customers among hundreds of thousands of new leads. Hundreds of thousands of new – unengaged – leads. While the CPA was quite low, so was the revenue per acquisition. A fraction of what they were seeing from other channels. It’s too early to see how the paid acquisitions will trend against other sources, but I’d wager they will fall short.
There are a few long-term effects of this that act like a cancer on the business:
- The overall list isn’t responsive. It’s impossible to test new copy, the lifeblood of our business.
- Deliverability will suffer. With the big three web based ISPs looking at engagement as a deliverability metric, more and more email will go into the spam folder.
- Muddy reporting. The low conversion rates and revenue per name from this channel will make it extremely difficult to define success for the next few years. This channel will need to be excluded entirely to see the real historical benchmarks for the file.
The fatal mistake here was something we all have experienced… the thrill of quantity over quality. Not all leads are made the same… do yourself a favor and focus on quality.
Before I sign off for the day, I’ll also mention, goals need to tie back to something real. A goal of 100,000 new unique visitors to the website doesn’t mean anything unless you can project out what that means to the business. For example: 100,000 new unique visitors should convert about 2,000 people to e-letter readers. Out of the 2,000 e-letter readers, 100 will convert to paid readers. Those 100 paid readers will refund at a rate of 15%. Those 85 paid customers will have an LTV of $400. The numbers here are for example only; please consult with the key members of your business to get your actual historical benchmarks.
I hope today’s issue has shed a bit of light on how you, as a marketer, should be looking at goals for your business. Your goals need to look at the short-term and long-term. They can’t exist in isolation, and, as Michael Phelps said, they should be uncomfortable. If marketing is easy, you aren’t doing it correctly.
I would encourage you to do the following after you read todays issue:
- Write down your goals. They aren’t real unless you write them down… seriously.
- Share your goals with your team members and your supervisor to make sure they are in line with the direction of your business.
- Revisit your goals monthly.
Last but not least, lets cheer on Baltimore-born Michael Phelps this evening for another gold in the 100M butterfly, his last event in this Olympics. 2,000 years from now lets hope a future Olympian, with a glimmer in his eye, becomes the next Michael Phelps.
As always, if you need help defining your business goals, get in touch with me at firstname.lastname@example.org. I’d be happy to discuss.
All the best,
P.S. Be sure to stay tuned in the next few weeks for an exciting new announcement about RapidFire, our marketing automation software that will set your campaigns on fire.