Develop goals and performance indicators for your businessBY ARA Retail Institute
A business objective is something the business is aiming toward or a strategic position it is working to attain. Usually it is a step in the strategy.
Objectives are similar to goals, but often have success/failure rather than quantifiable metrics. Objectives clarify strategies into a business focus that others can understand and strive to achieve.
Terms like goals, objectives, strategies, visions, and action plans, KPI’s (Key Performance Indicators) and CSF’s (Critical Success Factors) are frequently used in everyday language.
The ARA Retail Institute runs multiple workshops on retail, planning and strategic management. Join the ARA Retail Institute in their latest workshop which looks into how to analyse merchandise performance results and follow an organisational strategy to plan and enhance ongoing merchandise performance.
For example, a business may wish to be known for its superior customer satisfaction (vision). They then develop a strategy around training, supervision, performance management, research and recruitment to achieve this vision. One objective of the strategy would be to minimise the level of customer complaints. It is critical to the success of this objective to effectively handle any customer complaints, leading to a KPI defining the target number of customer complaints. The result of this KPI is that your team acts in a way to minimise customer complaints.
Given these definitions, retail marketing objectives can cover concepts including:
· Perceptions: reputation, store/brand image, and goodwill.
· Customers: satisfaction, loyalty, word-of-mouth, target market.
· Product/service: quality, consistency, packaging, and alignment with customer needs, after-sales service and return policy.
· Value: affordability, value for money, return on investment, discounts.
· Awareness: merchandising, store presentation, promotion plans.
· Access: store location, buying, store layout, logistics, and channel management.
· Processes: personal selling, sales incentives, service delivery, and database management.
From these objectives, retailers can develop goals along with related performance indicators to ensure the objectives are delivered upon given the business context.
Goals are ideally measurable and as such are time specific. This allows for effective evaluation of performance using KPIs or key performance indicators. KPIs are the performance measures prioritised by the business for a given role or area of business. They help teams and leaders identify where to focus their efforts in order to maximise their contribution to overarching business objectives.
Goals and KPIs focus marketing activities to those initiatives that are core to the success of the retail marketing function. Their measurability is a key feature of their benefit to business.
As is true in the delivery of all business objectives, the delivery of marketing objectives requires adequate and appropriate resourcing. Whilst in most cases resourcing is considered in terms of the financial investment required to support business initiatives, resourcing does not end there.
In addition to finances, the resourcing required to deliver upon marketing objectives can include:
· Knowledge, skills and experience
· Materials and equipment
Once the appropriate kinds of resources have been identified, it is important to quantify those resources and ascertain when they are likely to be required and in what quantities. This must be part of the planning process as it may require significant forward planning to ensure the provision of resources as required. Recruitment of new staff, training and development of required knowledge and skills, procurement of necessary materials and equipment, all take time particularly if the marketing objectives are large in scope and magnitude.
We have focused exclusively on areas relating directly to marketing. However, to be effective, marketing objectives need to be supported by objectives across all areas of the business. There is no better representation of this than if you consider a business plan is not just a marketing plan - it also includes a finance plan, a people plan and an operations plan.
A marketing objective of service excellence needs to be aligned with:
· Operations - the level of supervision of front-line staff
· People - need to be trained, inducted and coached in quality service
· Finance - budgets need to reflect the number of staff required to deliver quality service
Without this level of support and alignment, objectives are limited and may potentially fail. A method commonly employed to ensure a range of integrated objectives is set for the business is known as the Balanced Scorecard.
Businesses have historically used financial measurements to gauge their success. The problem with this narrow approach is that not all business processes or operations contribute directly to bottom line financial measures like Return on Investment (ROI) or Earnings Per Share (EPS).
About ARA Retail Institute
ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. For more information, please visit: www.retailinstitute.org.au
ABOUT THE AUTHOR
ARA Retail Institute
ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. The ARA Retail Institute is a Government Registered Training Organisation (RTO) making it fully qualified to offer retail education programs to ARA members and broader retail industry.