How advanced are your goal-setting skills? Scorecarding will give you a distinct competitive advantage in any economy and across every channel.
Effective goal setting is the most important part of a brand’s strategy across every business function. Without well-defined goals and objectives, you will never know if and when you hit your target. More importantly, effective goal-setting creates the roadmap to help you achieve your objectives. It can actually provide you with the step by step blueprint for success.
Another key benefit is that a well-defined strategy can place guard rails on your strategy to help keep you laser-focused on your goals and outcomes, which keep you from the many distractions that derail most businesses.
Scorecarding is a key component of goal setting. It is advanced goal-setting on steroids. You should use scorecards in every area of your business. This should be incorporated into your SMART goals; specific, measurable, actionable, relevant/realistic, and timely. We’ll use category management to illustrate how this works.
You should have a scorecard for every category you compete in. A category scorecard is organized and broken down into smaller “micro goals” all designed to grow the category, segment, brand and itemize sales. This includes all of your merchandising, promotional, pricing, and growth goals and objectives. For example, if you want to grow sales by 5% then you need to answer these questions and place them in your scorecard:
- What distribution gaps do you need to fix?
- What do you need to do to improve your merchandising?
- What does your everyday price need to be compared to the category leader and market competitors?
- How often do you need to promote to reach your target growth?
- What should your promoted price be?
Now place each one of those questions into your scorecard with your SMART objectives. For example, distribution.
- Specific: We want to increase distribution on Item “A”
- Measurable: Who is responsible for filling all the distribution voids?
- Actionable: What is the estimated sales increase for closing/filling the distribution gaps?
- Reasonable: What is an achievable distribution goal – the number of stores selling your product/item?
- Timely: When should the voids be filled by – what date?
Each of these objectives should also be focused on increasing shopper satisfaction – meeting their wants and needs. This is how you increase shopper loyalty and drive category sales for the retailer. Happy loyal shoppers equal more sales and profits for you and the retailer.
Each completed scorecard should identify the strategic allocation of work to be performed to reach the goals and objectives. They should be specific, not general. The more specific the objectives and goals, the easier they are to target, assess, and measure. The goals should be revisited often to keep the project on track.
Goal setting should align the brand’s strategies for the category with the retailer’s objectives. This is a key component of true category management, a partnership focused on benefiting both the brand and the retailer. Working together can help you both reach your goals for sustainable sales growth.
Four steps to scorecarding success:
- 1.Set the goals and objectives for the category working closely with the retailer. This should include a sales, product assortment, pricing, promotion plans, etc. This will help you take a leadership role in the category.
- 2.Break the goal down into bite-sized chunks that include specific objectives well-defined goals, identifying who’s responsible for achieving each objective, the timeline for completion, and a clear understanding what the successful completion of the goal will look like when reached.
- 3.Measure the goal. You need to identify a way to measure the goal along each step of the process. A good idea is to first establish a benchmark for each goal against how it will be measured. For example: a goal to increase sales and profits by 6% over the next six months might include eliminating out-of-stocks during all promotions, better product assortments and merchandising, improving category and item signage, matching a competitor’s price point on top selling items, boosting promotional effectiveness with features and displays, increasing the size of each sale/transaction (market basket), etc. The consumer needs to also be a big consideration at every step of this planning process. Meeting their needs should always be the primary focus if you want a competitive advantage.
- 4.Implement of the plan. Nothing happens until someone sells something. Well-organized and well-thought-out plans are the roadmap to success.
Putting the plan into action is where you see the results of your hard work. All retailers and brands should use some form of goal-setting strategy to plan for sustainable growth. The scorecard is an ideal way to focus, organize, measure, and manage your goals.
Dan’s mission is “Empowering Brands and Raising The Bar”. His weekly newsletter, educational podcast and training courses have become an invaluable resource for brands and retailers seeking a competitive advantage. To learn more or connect with Dan, visit BrandSecretsandStrategies.com or email firstname.lastname@example.org.
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