The SMART principle is a concept that is not only applied in life but also plays a crucial role in business activities. So, in reality, what is the SMART model, and how can this model be effectively applied in business? Let’s explore it together in the following sharing.
1. What is the SMART principle?
The SMART principle consists of five key elements:
Specific: Clearly defined Measurable: Able to be measured Achievable: Attainable Relevant: Related Time-bound: Has a deadline
The SMART model is established to set clear and specific goals, helping business owners determine a suitable direction, plan the use of resources rationally, and thereby increase the effectiveness of success in business.
1.1 Specific – Clearly defined
When applying the SMART principle in business, you need to ensure that the goal is clear and specific. This not only provides you with a detailed direction but also serves as a foundation for implementation. Start with very clear questions:
- What do you want to achieve with this business plan?
- Who will be involved in achieving this goal?
- Relevant resources
For example, in a business campaign, your goal and purpose need to be clearly defined, whether it’s revenue or brand expansion. Based on this, you can plan resources, costs, and personnel for the campaign, such as sales staff or marketing employees.
1.2 Measurable – Able to be measured
A goal related to numbers is a prerequisite for any campaign, whether you are applying the SMART principle or not. You need to outline measurable goals to ensure the ability to track the progress of the campaign. This helps you make timely adjustments and improvements to your campaign or business activities.
For instance, in a new product launch campaign, if your goal is to distribute 200 samples per day at a kiosk, you will need to determine the communication methods to attract customers to your booth. This also involves costs for printing flyers or renting space for the kiosk.
1.3 Achievable – Attainable
Your goal when implementing a campaign needs to ensure achievability or feasibility. A good strategy and a suitable goal are factors that help you determine the effectiveness of the campaign and what needs to be done to achieve the set goal. Do not set unrealistic goals; try to base them on the actual situation to determine your goals and direction.
For example, in the campaign mentioned above, if your kiosk is located in a residential area where most residents are retired civil servants and the new product you want to promote is cosmetics, achieving the goal of 300/800 households is not too difficult. However, if you set a goal of 1000/800 households, this is something you need to reconsider and adjust.
Or you may need to change your approach, communication methods, or expand your operating area to ensure the set goal. That’s why achievability is crucial when setting a goal.
1.4 Relevant – Related
For relevance in the SMART principle, the set goal must be closely related to the development direction. This also means that the work of employees, the goals of projects, or marketing plans must align closely with the overall goals of the business.
1.5 Time-Bound – Has a deadline
Goals set for every campaign need to have a plan regarding the time of execution and completion. This is the basis for you to arrange the implementation steps, focus, and allocate time to work towards the ultimate goal.
For example, for a product launch campaign, to organize the launch event and display the product, you need to set a completion time for each specific task, such as POSM, completion time for communication activities. You need to adhere to the set deadlines to achieve the final goal.
2. Examples of determining the SMART principle in business
2.1 Example of increasing sales revenue
For a business operation, the goal of increasing sales revenue needs to be clearly defined according to each criterion of the SMART principle as follows:
S: Increase sales revenue for the store
M: Increase sales revenue
A: Increase revenue based on current resources and adjust marketing campaigns reasonably
R: Increase revenue to ensure the ability to turnover capital for the store
T: The revenue increase will be implemented in April.
2.2 Example of optimizing costs
The goal of optimizing costs according to the SMART principle needs to be implemented as follows:
S: Reduce business and operational costs for the store
M: Optimize at least 5% of costs compared to the same period last year
A: Optimize costs by cutting personnel, optimizing various tasks through management software
R: Optimize at least 5% of costs to ensure the ability to recover after the pandemic for the store
T: Cost optimization needs to be implemented from May after careful calculation of the costs that need to be cut.
These are important factors about the SMART principle that business owners need to master. We hope that our sharing can help you optimize your business operations and run them most effectively.
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