How to define your marketing goals?
How to determine your strategic marketing goals?
The Ansoff matrix can help marketing manager with how to grow. In essence there are four strategies to achieve growth:
- Market penetration: In this case the companies tries to increase its market share within its existing markets. This can be done by selling more to the same customer (either the same product or more expensive products) or acquiring new (but the same kind of) customers in the same market. Typical tactics to realize this are by decreasing pricing, increasing (price) promotion, expanding the distribution network and buying a competitor. Typical SMART goals are: revenue per customer and number of (new) customers.
- Market development: In this case, the company expands into new markets either geographically or reaching a completely new target group. This can be done by using its own resources but also by using new channels like franchisers and distributors. Typical SMART goals include sales increase in the new region or among the new customer segment.
- Product development: To achieve growth, a company can also select to develop new products. The level to which this can be done can differ.
- New product line: From Apple iPod to iPhone to iPad and Watch
- Product extension: iPhone6S, iPhone6S, iPhone6Plus, iPhone6, iPhoneSE
- Product upgrade: From iPhone 5 to iPhone 6.
- The way products can be developed can differ:
- Investing in one’s own R&D
- Branding a third-party product as its own product
- Jointly developing a product line
- Diversification: Diversification strategies are usually the most risky as a company tries to combine two strategies that in itself are already challenging into one: introducing new products in new markets.
How to determine your operational marketing goals?
The high-level targets listed need to be translated into concrete operational goals. Here the RACE model (also called REAN) distinguishes four phases to guide the customer through his customer journey:
- Reach (Reach): Making the customer aware of the company’s existence and that of its products. Typical SMART goals are Facebook visitors, LinkedIn followers and TV viewers.
- Act (Engage): In this regard, act also stands for interact. The goal of this phase is to let the potential customer take the next step from being made aware to actually visiting the website, requesting more information or visiting a store. Typical SMART goals are website visitors, email newsletter subscribers, report downloaders and store visitors.
- Convert (Activate): The next step is converting the customer from a visitor to an actual buyer. Typical SMART goals are number of buyers, transactions, conversion ratio, average order size and number of items in basket.
- Nurture (Engage): This phase’s focus is to transform first-time customers into repeat customers. Typical SMART goals are percentage or repeat buyers, but also the number of positive reviews or tweets about the company and its products (which may again increase the company’s reach).
The high-level strategies defined above can now be translated into more operational goals:
- Market penetration: In this case the target customer segment should already be aware of the company’s existence and its products. The challenge may lie in converting more potential customers into actual customers and by engaging them to buy more.
- Market development: As the company expands to new markets, the target customer segment may not be aware of the company’s products or services. Therefore, creating awareness and reaching customers have priority.
- Product development: In this situation the company needs to sell new products to its customer base. Here the focus should lie on getting customers to act.