February 15, 2015
Anyone that knows me, or who has worked with me, knows that I am slightly obsessed with target setting.
I trace this back to the days when I worked at Colgate-Palmolive, a company that was relentless with setting, monitoring and tracking to targets. While working there, I was constantly quizzed by a variety of Executives and Directors on my brand's performance.
I knew the market share down to a sku-level (stock keeping unit), as well as the entire brand, by sub-brand, and growth over last month, last year. I memorized all of the competitor's shares. And of course, the ever popular and extremely important Net Sales figure. We would be asked what drove what up, down or otherwise. And we were expected to know EVERYTHING.
One of the reasons Colgate rarely misses a corporate profit target, is because of this rigour around business and brand management.
If, for example, we knew X brand was tracking 25% under where it should be in net sales for the month, the entire team would take action. We would put out an online banner campaign, get an extra ad at a retailer, or up the TV buy.
So, it's no surprise that I've brought this tracking and measurement obsession into my eCommerce business, Encircled.
Making your revenue target for your online store is not solved by a single tactic. However, what I want to share with you today is what I believe makes the biggest difference in target achievement..
It's February 15th as I type this blog post. Just a shade over halfway through the month of February.
So, I have a question for you.
If you have said, yes, and know the number, then I'm giving you a virtual high five.
If you've said no, or no idea, or what target? Then, read on.
The famous 1960s Locke & Latham journal article, "Towards a Theory of Task Motivation and Incentives" outlines the key principles in enhancing your likelihood of achieving a goal.
In general, the takeaway from this research is that more challenging and specific goals will yield a higher likelihood of achievement.
So, therefore, even having a goal is better than not.
Making that goal super specific will actually enhance your probability of making that goal.
And finally, pushing yourself to make higher more ambitious goals will have a positive impact on your performance.
If you don't set at a minimum revenue goals (I highly recommend setting gross margin, profit, traffic, conversion goals also), then you are seriously missing out.
If you are not forecasting sales, or profit then you are NOT running a business. You are managing your hobby.
Setting monetary goals for your business does not have to be an arduous process. Open up an Excel doc (or a Google sheet, or numbers). Put the months of the year across the top of the sheet, and Target/Revenue this year, Revenue last year, % of Target, Chg vs. last year in the left hand column.
Input your sales from last year by month. You should be able to download this data from your accounting software, or eCommerce system.
Next, just free form input to an annual goal.
Say, you did $50k last year, and you want to do $100k this year. Split this $100k up over 12 months. Now, you have some numbers in that spreadsheet. Sweet!
Next, goal back and make adjustments for seasonality, product launches, promotions, retail events, pop-ups, upcoming press, trade shows, consumer shows, etc.
Of course, you'll need to add a few formulas (a couple of sum, change over LY formulas) to make it all work.
Now, let's say your target for the month of March is $10,000.
March has 31 business days (because eCommerce never sleeps!).
I've created a free, downloadable target worksheet because I believe that target visibility is the KEY to your success in making your monthly revenue targets.
So, you would print off this worksheet, and input your monthly revenue goal of $10,000.
Next, divide that goal by 31 days (in the month of March) which equals about $323 in revenue/day.
Each week has 7 days, so that's about $2261 in revenue/week.
Feel free to add in your profit goals as well. This will vary depending on your business model (wholesale, direct to consumer, retail etc.), and stage you are in for your business (startup, established etc).
Next, outline your key plans for the month that will drive to this revenue goal.
And then, post this worksheet somewhere visible in your workspace.
Set a reminder in your calendar at the end of each week to update your spreadsheet to see how much remains in your month to meet your goal. This will vary as sometimes you will have a blockbuster week, and the odd dead sales day, but you want it to net out to your goal!
Update your worksheet (cross it off and update, or print out a new one).
Firstly, do not panic!
This is a great time to step back and analyze why you aren't making your target.
Is your website traffic up/down over last month or last year? Is your conversion up or down? Dig deeper into each of these aspects. As you start to pull the analytics, I'm confident several insights will pop-up.
Next, make a plan.
What are THREE things you can do in the next week to positively impact your sales?
Write those down, and make them a priority in your week. Maybe it's writing a kick-butt blog post with a neat graphic and strategically posting it on the internet, maybe it's sending out a newsletter with a special offer to loyal customers, or perhaps it's pitching to some local press about your business.
My first step in goal making is goal setting and goal tracking.
The strategy and tactics that go into making a business hum, and drive to its' goal is a huge topic unto itself.
Admittedly, there is a lot more than what I've written above that goes into making a goal.
However, this is a good primer to get you started.
On a future blog post, I'll make sure to talk about how to actually set your focus and strategy for the year, and translate this into monthly action steps.
Need a little help setting, tracking, and making a plan to achieve your Online Store goals? I'm here to help. Check out my 1:1 Monthly Retail Coaching retainer. I can be your personal retail advisor in your corner for a whole month. We can set goals, formulate a marketing plan, and get you off and running to building a sustainable business.
Wishing you much abundance + retail bliss,
I'm on a mission to empower eCommerce entrepreneurs to achieve their first million through education, coaching and community. Learn more