Are you setting reasonable goals for your business?

• reasonable, Setting

9 min. (1819 words)

are-you-setting-reasonable-goals-for-your-business?

When it comes to marketing, most people aren’t in it for the planning sessions. While a few special people love planning things out, most of us don’t. We’d much rather spend our time creating ads, writing clever content or coming up with beautiful designs.

But planning? Ugh.

However, while planning may not be your favorite thing to do, without it, all of those ads, witty one-liners and gorgeous designs often don’t deliver the results you need. Good planning based on solid goals are usually the key to a successful marketing campaign.

The only question is, what should your goals be? The answer will be specific to you and your business. 

In this article, we’re going to talk about how to set effective growth goals – the kind that will make it easy to plan out and execute an effective marketing strategy. That way, you can get back to writing one-liners and the rest of the fun side of marketing – all while knowing that what you’re doing is helping you achieve your goals.

Why you need to choose the right goals

If you don’t know what your goals are, you aren’t very likely to achieve them. Unfortunately, many businesses have vague goals like “growth” that they work very hard to achieve without actually knowing what success looks like.

For example, is increasing your social media following a good goal? If you’re trying to be a social media influencer, definitely! If you’re a B2B business that manufactures custom bolts for deep-sea oil rigs, maybe not so much.

What about revenue? Surely increasing your revenue by X is a good goal. If you’re running a SaaS business and want to attract your first round of investors, absolutely! If you’re a mom and pop shop that is struggling to get by, though, increasing profit is probably more important than increasing revenue.

Do you see why setting proper goals is so important? The goals you choose will determine how you market your business and measure success, so if you aren’t picking the right goals, it will be hard to come up with an effective marketing strategy.

The solution, of course, is to figure out what business goals really matter to your business. 

Identifying the right goals

Different businesses have different needs at different times. For example, remember that SaaS business we mentioned a minute ago? Early on, their goal might be to build a decent user base to prove that their software is interesting and attract initial investors. Later, however, it might become more important to increase revenue to show those investors that the business is viable. Eventually, they may want to maximize the amount of profit they make from their users – turning their good idea into a viable, money-making machine.

In addition to identifying what you want to focus on, it’s also important to determine how much you want to grow. Referring back to our SaaS business example, this company might want hundreds or thousands of new customers. A freelance writer, on the other hand, might only need one new client to meet their growth goals.

Regardless of what your business needs, identifying the right growth goals is the key to marketing success. Once you know what you’re trying to achieve, you can reverse-engineer a marketing strategy that will help you reach your goals. From there, all you have to do is execute—and that’s the fun part of marketing.

With all of that in mind, let’s take a look at each of these two areas:

  1. What you want to grow and how much you want it to grow.
  2. What you need to consider to choose the right growth goals for your business.

What do you want to grow?

In general, most businesses want to grow in one of the following areas:

  • Units (number of products sold, user count, social media following, etc.)
  • Revenue (total sales, average contract value, net profit, etc.)
  • Subscriptions (annual recurring revenue, monthly recurring revenue, etc.)

What you want to grow plays a big role in the way you approach marketing. In our SaaS business example, if their goal is to increase their total user count, they might focus on marketing free trials of their software. This won’t increase revenue, but it will increase the unit metric that they care about.

On the other hand, if their goal is to increase total sales or net profit, marketing free trials of their software may not be the best way to go. Instead, they might want to focus on marketing to their existing customer base and getting people to sign up for a paid plan or upgrade their existing plan.

As you decide on what you want to grow, it’s important to keep in mind that whenever you focus on one thing, other things usually suffer a bit. This is why it’s important to pick the right goal at the right time. If our SaaS company focuses on profit margin when they should be building a user base, they might struggle to get the investors they need and flounder as a business.

The right goal for your business should match your current business needs and set you up for success in the future. Sometimes, that might mean making a few sacrifices in the present, but if it sets you up for long-term success, it’s a good investment.

How much do you need to grow?

Once you know what you want to grow, you need to figure out how much you need it to grow. 

Here’s where things can get really fun.

It’s one thing to say, “We want to increase our customer base.” It’s another thing entirely to say, “This year, we’re going to double our customer base.” The first statement is a dream. The second is a goal—a goal you can build a plan around.

Of course, you want your growth goals to actually be achievable, so let’s take a look at several different types of growth goals to help you decide what your goals should be.

Hypergrowth

“Hypergrowth” is a term people love to throw around. Basically, it’s insane levels of growth ranging anywhere from 2-4x year-over-year growth (or even higher).

While the idea of hypergrowth is exciting, though, it usually only occurs in one of two situations: either you’re in your first year of business, or you’re marketing a product or service that is completely disrupting the market.

Generally speaking, it’s pretty easy to double the size of your business when your company is brand new. After all, getting from $250 a month to $500 a month in revenue is fairly manageable for most start-ups. Getting from $250 million a year to $500 million a year in revenue, on the other hand, is a colossal endeavor.

As a result, “hypergrowth” is usually a goal reserved for new businesses. Unless you’ve hit the entrepreneurial jackpot and are marketing a virally popular business, trying to achieve hypergrowth after your first year or so of business is just a recipe for frustration.

Rapid Growth

So if “hypergrowth” isn’t on the table, what is a good growth goal? If your business is more than a year old, but still fairly new, you may want to shoot for rapid growth. 

For the first 2-3 years that a company is in business, it should be reasonable to double in size every 12-18 months. Don’t get me wrong, this will take a ton of work, but it should be doable—provided that your product or service is solid.

At a certain point, however, it will start to get harder and harder to maintain this kind of rapid growth. Once a company has been around for a few years, they’re fairly well established in the marketplace and it becomes a lot harder to capture additional market share, so this level of growth probably isn’t the best choice..

Steady Growth

For most people who are reading this article, a steady growth rate of around 50-75% is probably a reasonable goal. This is especially true if you’re part of a younger business that is doing a lot of online marketing, where a little ingenuity and clever advertising can win you a lot of additional business.

Mature Growth

If your business has been marketing itself online for the past 7-10 years, however, even 50-75% year-over-year growth may be overly ambitious. At this point, you should have good market penetration, so 10-25% growth is usually a solid goal.

Growth goals and online marketing

One final thing to keep in mind as you establish your growth goals is that your business isn’t static. New products, services or marketing channels will follow the same generally growth phases outlined above.

For example, Apple was around long before they released the iPod, but that product achieved hypergrowth, completely disrupted the marketplace and revitalized Apple as a business.

While your business might not be the next Apple, any new product, service or marketing channel will follow the same hypergrowth, rapid growth, steady growth and mature growth path that a new business follows. This is particularly true when it comes to online marketing. 

Online marketing is a great way to grow your business, but it’s important to understand where your marketing channel is in the growth cycle. If you’ve been running paid search ads for the past 10 years, increasing year-over-year sales from Google Ads by 25% is probably an aggressive goal. On the other hand, if you just launched a new podcast, doubling your subscriber count over the next year might also be an aggressive, but reasonable goal.

So, whether you’re setting broad marketing goals or trying to hash out specifics for different channels or campaigns, it’s important to understand what growth phase each channel is in. That way, you can set achievable goals and appropriate expectations.

Conclusion

While it might not be the most exciting part of marketing, identifying the right growth goals for your business as a whole or an individual marketing channel is the key to creating effective campaigns.

Once you’ve decided what you want to grow and how much you want it to grow, the rest is fairly easy. You just need to break down your timeframe, budget and marketing options and come up with a strategy that you can use to achieve your goals. From there, you can get back to the fun part of actually creating and implementing your marketing approach!

Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.


About The Author

Disruptive Advertising, Jacob has developed an award-winning and world-class organization that has now helped over 2,000 businesses grow their online revenue. Connect with him on Twitter.




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