Objectives are the yardsticks by which the plan’s progress may be measured. They serve a number of key functions:
Motivation: objectives provide an organization and its constituent departments a goal at which to aim.
• Monitoring: progress towards a given objective is the criterion by which the success of the organization’s strategy can be judged.
• Coordination: objectives ensure that all parts of the marketing organization are working together towards the same goal.
• Communication: objectives are a clear statement of what the organization seeks to achieve. They therefore communicate the strategic direction throughout the organization.
• Control: by providing a basis for measurement, objectives enable managers to control the activities of the organization. In some companies, corporate objectives are directly linked to senior managers’ appraisal targets, and used as basis for salary review.
Clearly, then, the flavor of marketing objectives is significant, so RM should contain different objectives to those used in traditional marketing plans.
Formulating measurable RM objectives
To be of value, planning objectives must be both specific and measurable (MacDonald, 1999). One of the difficulties with RM programmes is that key indicators of success, such as relationship strength, satisfaction and commitment, are difficult to define and measure.
It is worth stressing that objectives should not relate solely to the outputs of the plan, but also to the inputs and process elements. Alongside objectives which specify outcomes such as target share of customer spending, the plan should include enabling objectives that direct how this outcome should be achieved (e.g. increase number of consultation visits to twelve per year to maintain interest and collect feedback on specific product/service requirements), and input objectives, which set out the resources or other inputs required to enable the strategy. In terms of outcome-based objectives, Gordon (1998) suggests the following:
• Revenues and costs by customer;
• Customer retention rates;
• Share of customer for products and services now made;
• Share of customer for products and services that the organization could supply;
• Progression up the relationship ladder.
It is necessary to define objectives relating to customer satisfaction, service quality and other important components of relationship performance.