"I want a website that delivers results," or "I want marketing that delivers results."
These are two famous phrases marketing agencies across the world hear from prospects. In this instance, results typically refer to sales revenue generated. Let's dig into Goals, Key Performance Indicators, and the strategies that help us drive results.
Then we will take a look at the "Flywheel" and see how we can leverage that tool to find out where we need to focus our business efforts.
Stretch Goals & Smart Goals
Let's start by talking about goals. We want to look at two types of strategic goals. Stretch Goals and SMART Goals.
Why do I need two types of goals?
Stretch goals – Think Big, Think Long Term.
Our Stretch goals are those big, grand slam business goals achieved over an extended period of time. The adage, "Reach for the stars, and you can grab the moon" applies here. We may have a twelve-month, three year, five year, or ten year Stretch Goal.
SMART Goals – Get !@#$ Done.
SMART goals are those goals we set to get !@#$ done. They are contain a Specific objective that is Measurable, realistically Achievable, Relevant to our Stretch goals, and Time-bound.
Let's explore the difference between Stretch Goals and SMART Goals with an example.
I Want to Run a Tough Mudder - a Failed SMART Goal.
I want to run a Tough Mudder in September. Let's set up a SMART Goal to help me achieve this dream.
- SPECIFIC – I want to run a Tough Mudder. That's pretty specific.
- MEASURABLE – I have a literal finish line to cross.
- ACHIEVABLE – I have transportation, two legs, I am in relatively good shape. Yes.
- RELEVANT – Two personal missions of mine are to have fun and be healthy. It applies to both.
- TIME-BOUND – It's in September.
September comes, I attend, and something… bad happens.
Between the 2nd and 3rd obstacle, I have significant issues. I collapse, pass out, and get carted away in an ambulance.
My SMART Goal failed. It didn't work. GOALS SUCK.
The problem was, I tried forcing a SMART goal into a Stretch goal. If we do that, failure will be sure to follow.
A Tough Mudder should contain several SMART Goals, one of which may look like this:
- SPECIFIC – Run a 10-minute mile
- MEASURABLE – Run 3 miles a day logging my time so I can see how I am trending.
- ACHIEVABLE – Overcome roadblocks: I binge Netflix, I hate running. Watch Netflix on a Tread Mill.
- RELEVANT – Endurance is highly relevant to completing a Tough Mudder.
- TIME-BOUND – Check Progress trend in three weeks. With that trend, I should know how long it will take to achieve this goal.
BAM. A SMART Goal that successfully contributes to a STRETCH Goal.
SMART GOALS ROCK!
Ask yourself, "Self, what are my Stretch goals? Are they broken down into SMART Goals? How will I measure these goals?"
When we are talking about goals, measuring them is an essential aspect of Goal Setting. To measure goals, we typically look at indicators that offer insight into performance trends.
We call these business metrics Key Performance Indicators! Or KPIs.
Watch KPIs that Matter to Your Goals
When we are talking about KPIs, we are typically talking about lagging KPIs. If you are looking at a KPI in a report, it is lagging. It's in the rearview mirror. You can't change it.
When talking about Leading Indicators, I am not talking about a number on a chart. I could have a chart that says; We had 100 Trial Sign-ups this month, which means that we may have 10 new customers next month. You can argue that Trial Sign-ups is a leading KPI. It is a KPI that can be improved upon and used to infer measurable progress.
Think of Leading Indicators as growth strategies. What actions can you take over the next three months that will indicate real positive performance for our crucial Stretch Goals?
Our Lagging KPIs are easy to measure but difficult to improve. Looking at a lagging KPI on a fancy report gives us no indication of how to improve it.
I can see we had 100 trial sign-ups last month, but it already happened. How do I get more? A Lagging KPI will not tell us that. We need a Leading Strategy to move that KPI.
Leading Strategies are challenging to measure and difficult to implement. They are difficult to measure because they don't fit into a nice data chart. They are more nebulous and should be focused on progress toward our Stretch Goals – measured by KPIs.
Take another look at our Tough Mudder example.
My Lagging KPI in that example is my time to run a three-mile lap. I know I want that time to beat 3 minutes. I can see my trend, but that KPI is not telling me HOW to improve my time. If I am struggling at 4 minutes week after week, I need a Leading Strategy to improve that time.
This strategy could include improvements in my form, my breathing, my stride, or choosing to run downhill three miles. In this case, the running three miles a day and hoping for the best was not cutting it. I needed an improved strategy to achieve that SMART Goal.
Our Leading Strategies are challenging to measure and difficult to implement. They take research and are based on expertise, experience, and little luck, requiring considerable resources and time.
Leading Strategies are worth it because they drive stagnant lagging KPIs.
How KPIs tie into the Flywheel.
Now that we know a bit more about Goals and KPIs, let's take a look at the Flywheel's anatomy. The HubSpot Flywheel is a decoder ring telling us what to focus on for healthy Customer Vitality.
The Flywheel's Outer Ring
The outer ring of the Flywheel represents our market. They are the Strangers who have no idea our business exists, Prospects who are potential customers, Customers, Promoters, or Evangelists of our brand.
Look at this outer ring, find the friction points, and ask why? Need more customers? Why don't you have them? Is it a lack of prospects? Or is it a terrible conversion rate from Prospects to Customers? If the conversion rate is awful, is it because of an issue with your message delivery? Or are you attracting poor prospects? Dig Deeper.
The Flywheel's Impression Ring
The next ring tells us the impression we want to leave with our market and helps us troubleshoot issues with the Outer Ring. If we are having problems turning Prospects into Customers, it's either an Attract or an Engage issue. Now we can start exploring our Attract and Engage strategies to find out why our KPIs for Customer conversion are not where they need to be.
The Flywheel's Business Hub Ring
Digging in, we can see the Business Hub that has the most direct influence over our Impression Ring. Looking at Attract/Engage, we can see our concern is addressed by Marketing to research with Sales.
Exploring the Business Hub in relation to our outer two hubs, we can see what business units need to be involved in improving that aspect of the Flywheel. What can that business unit to add power and reduce friction?
The Flywheel Axil. The CRM.
The Flywheel needs reliable communication between the Business Hubs. Centralizing your communications and customer's vitality in a central CRM that integrates with other platforms is critical to a strong Flywheel.
With the Flywheel, we want to do two things.
Feed It and Free it from Friction.
Keep It Cohesive.
When looking at our business objectives, keep everything cohesive. To build out our Marketing, Sales, and Service Strategies, do it keeping Stretch Goals in mind. Understand what elements of the Flywheel affect the “results” of your Stretch Goals.
Build out SMART Goals to achieve those Stretch Goals, and build out relevant KPI's that will allow us to know we are sailing our ship in the right direction.
It's so easy to get lost tracking KPIs that have no relevance to our actual goals. They end up being a number on a report that is a distraction from our Stretch goals.