In November 2002 at Nordstrom, I got to enjoy a new relationship with a new boss ... the Chief Marketing Officer.
As we prepared for 2003, I asked a simple question.
- "What are my goals and objectives for 2003?"
The question was met with the following response ...
From that point forward, I wrote my own goals and objectives.
When you begin the rebuild of your department, make sure you have a Merchandise Productivity Goal, and a Customer Acquisition goal. All of your employees will be evaluated based on how well your company performs.
Let's say you are forecasting to hit 100,000 new customer if it is "business as-is" Let's say that you can increase new customers by 8% by swapping out some of your pointless housefile investments. Let's say your Brand Response Marketing Team can get you another 5%. Here's how you might write the goal.
Goal #1: Grow new customers from 100,000 in the next year to 113,000 in the next year, via changes in investment strategy and changes in marketing strategy.
- Exceeds Expectations = 120,000 new customers.
- Meets Expectations = 110,000 new customers.
- Missed Expectations = 109,999 or fewer new customers.
Goal #2: Increase customer lifetime value from $22.00 profit per new customer to $25.00 profit per new customer by reducing wasteful marketing expenses.
- Exceeds Expectations = Lifetime Value of $27.00 or greater.
- Meets Expectations = Lifetime Value of $22.50 to $26.99.
- Missed Expectations = Lifetime Value < $22.50.
If every employee has a bonus structure, then bonuses are paid when the two goals are exceeded.
If you choose to not pay bonuses (#notsmart), then salary increases are provided when the two goals are exceeded.
I know, I know, it's time for the angry chorus to tell us all why this is stupid.
- We don't have control over new customers - if the creative team makes changes like they did in 2011 and those changes cost us 5%, then we miss our expectations and we don't get a raise and it isn't our fault, so can we please do things the way we used to do them?
- Our merchants are introducing too many new products, too many unproven products. Why should our bonus hinge on the effectiveness of new merchandise?
- I perform well but my co-workers don't. Why should I be evaluated on the same criteria they are evaluated against? Why do I have to carry this team?
Those are the kind of things that losing employees at losing companies tend to say. They gladly support the company when they get a salary increase they did nothing to earn. They love cashing in stock options when they had nothing to do with the nearly unethical things Wall Street partnered with your CFO on to bump up the stock price. But when held accountable?
Set high expectations from day one.
Reward employees when they exceed expectations.
Report on performance against expectations every single week.
It is time to rebuild your marketing department, from scratch.