## August 27, 2007

### Creating An Objective

Assuming your company outlined high-level goals and objectives, it is time to create personal objectives for your team.

Say you have an objective to grow online sales by twenty percent in 2008. If you are responsible for the e-mail program, with a list of 100,000 subscribers receiving 52 e-mails a year that generate \$0.25 per e-mail, your e-mail program drives 100,000 * 52 * \$0.25 = \$1,300,000 on an annual basis.

If online sales are supposed to grow by twenty percent, your e-mail volume had better grow by at least twenty percent next year!

Therefore, your objective might look something like this:

Increase annual e-mail volume by at least twenty percent in 2008 on a program that includes one campaign per week and a twenty percent increase in the total e-mail marketing budget. Increases can come from file growth and productivity per e-mail delivered.

Performance Measurement:
• "A" = \$1,755,000 or more annual volume.
• "B" = \$1,625,000 to \$1,754,999 annual volume.
• "C" = \$1,495,000 to \$1,624,999 annual volume.
• "D" = \$1,365,000 to \$1,494,999 annual volume.
• "F" = \$1,364,999 or less annual volume.
Notice that a grade of "C" is average --- a "C" represents expected performance.

Notice that the objective says little about "how" the objective will be met. There is language that insures that e-mail campaigns will be "weekly" --- the team cannot achieve this goal by sending a campaign every-other-day. There is language that dictates the annual marketing budget, this language will limit the ability of folks to go hire a high-powered vendor, for instance.

After outlining the rules, it is up to the staff managing the program to figure out "how" this will happen.

At the end of 2008, performance is measured against this standard. Employees should feel good about earning a grade of "C" --- it means they delivered performance necessary to meet company objectives.

It is really important to set these objectives before the fiscal year starts. Employees need to be given a chance to impact business, to be given a chance to plan ahead and secure the resources necessary to achieve great performance. Some companies roll out objectives or bonuses well after the fiscal year begins. Employees cannot impact annual results when this happens.

Your turn --- what have you observed when it comes to creating performance objectives?

1. action analyst2:57 PM

Although I like the idea of giving this clear objective to the team, I am worried at the same time.

A myopic view by the channel marketers is encouraged in this scenario. For example, its likely that many outside factors will aid email \$ performance, including catalogs, mass marketing, pr, and product offering.

I feel a more reasonable objective would be stated as... "We know that a larger file size of engaged customers is worthwhile to the business." Measure filesize and engagement at the end of the year... two arenas owned by the email marketers. Email revenue will likely grow as well. This is better than tasking the team to grow email revenue, they'll probably want to build an email matchback process to "grow their revenue."

But then again, what do I know, I'm the lowly SAS programmer referenced in the blog.

2. What you describe is valid, but leads to the same problems that my objective would lead to.

For instance, a myopic view by the channel marketer would lead the e-mail marketer to have a sweepstakes to win a free "something" if they give their e-mail address. You increase the size of your e-mail file with unproductive addresses that don't increase sales.

No matter what the objective, there is a level of co-dependency with other departments, and ways to "game" the objective.

But your points are thought provoking, so I will write a separate post about them. I appreciate the comments.

And, you are NOT a lowly SAS programmer. You are somebody that the web analytics and e-mail folks and online marketing folks will one day realize has "all the answers".