📂 What's wrong with marketing goals (and how to fix them)
Corey Haines | Swipe Files
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This is one of my spiciest marketing opinions 🔥 Marketing goals should either be: (1) Ignored all together OR (2) Meticulously crafted with a LOT of science. Here are a few reasons why ↓ #1: Demand ultimately determines marketing success.
Without any semblance of "product-market fit" (define that however you want), all marketing goals are going to be wishful thinking. You can't generate demand. You can educate and even create hype, FOMO, and urgency. But you can't generate people handing over credit card info. Covid was the prime example of demand. Demand for office supplies, office space, wedding venues, etc dropped dramatically overnight. At the same time, tools and supplies to support remote work, contactless delivery, and hygienic products skyrocketed. As a marketer, demand is largely out of your control. It's a blessing and a curse. Good luck selling office space in the midst of a pandemic. But also: if you're in any category that supports remote work/collaboration... you just won the jackpot. This is the Google Trends chart for "Zoom" The search volume perfectly mimics covid cases. Zoom exploded when the world went into lockdown.
Your goals correlate with demand. If demand plummets, your ability to reach your goals will too. If demand skyrockets, your ability to reach your goals will too. #2: Market size establishes a baseline Marketing goals should be founded on data about your target customers. The "A" in SMART goals is for "Attainable." In other words, a goal isn't just an arbitrary number you pull out of a hat. Estimating market size:
Let’s focus on TAM for a minute.
This is why VCs bias toward huge markets. To create multi-billion-dollar companies, you need significantly larger multi-billion-dollar TAMs. WordPress powers 40% of all websites and 64% of websites with CMS. Given that there are 1.86+ BILLION websites, they're capturing a huge portion of the TAM.
Now let’s look at SAM. No one has 100% of the TAM (unless you’re a monopoly) so it’s more useful to think about how much of a market you can capture for setting goals. There are only two ways to capture available market share:
TAM Growth: If all else is equal and the number of customers you and your competitors have stays completely static, then the marketing opportunity is determined by the amount that the market grows. In other words, if the market grows by 10% to 110,000 people/companies, then you and your competitors race to capture as much of the 10,000 that you can. In a market where the TAM is rapidly growing, you can get away with ignoring competitors and focus on capturing TAM growth. Your marketing goals will be dependent on the size of the TAM growth and the amount of that growth you can capture. What if the TAM doesn't grow by much? Then you have to get people to switch to you. In a market where the TAM is stagnant, competition is going to be cutthroat. TAM growth and competition leads us to the SOM: What's OBTAINABLE? SOM is the most important market metric for setting goals because it introduces time frames and budgets. SOM forces you to ask: How much of the TAM growth and business to competition can I capture THIS YEAR? This is where things really get scientific. To calculate your serviceable obtainable market, you have to take into account: Product: Which customer segments can your current feature set serve? #3: There are already established milestones for VC-backed startups Once you've reached $1M ARR, VCs will generally want to see you triple revenue for two consecutive years and then double revenue for three consecutive years (and every year after that). Some call it the "3 3 2 2 2 Rule." For example, if you raised a Series A at $1M/yr, here are your goals laid out for you:
Following this methodology, your marketing goals should either be to double or triple revenue. Simple. Now, if you're not backed by VCs, you have more flexibility. You can choose to grow by 20% or 50% or 300% or even 0%. It's up to you. But use the other methods mentioned before to set an achievable goal. —Corey
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