The Right Way To Set Goals for Growth: Evoked Set and Absolute Numbers

The Right Way To Set Goals for Growth: Evoked Set and Absolute Numbers

Setting goals for growth is crucial for any business or brand. It provides a clear direction and helps teams stay focused on achieving measurable results. However, it's important to set the right goals that will actually drive growth and success. In this article, we will explore two different perspectives on goal-setting for growth: the importance of absolute numbers and the concept of evoked set.

The best approach to set goals for growth is to focus on absolute numbers that directly impact the bottom line. Instead of setting vague goals like "increase brand awareness" or "improve customer satisfaction," it's more effective to set goals that are measurable and tangible. For example, aiming to increase the number of active users or decrease the number of churned users. These absolute numbers are what truly matter in driving growth and success.

Teams should take credit for what they do, not for what happens naturally. It's easy to fall into the trap of celebrating growth that occurs organically or as a result of external factors. However, true growth should be attributed to the efforts and strategies implemented by the team. For instance, if you grow traffic to a lower converting country like Germany, away from a higher converting country like the U.S., you might hit traffic goals, but not signup goals. It's important to ensure that the goals set align with the desired outcomes and are within the team's control.

One important metric to consider when setting growth goals is the activation rate. This rate is calculated by dividing the number of activated users by the total number of users. There are two ways to move this metric in either direction: change the number of activated users or change the total number of users. By focusing on increasing the activation rate, teams can ensure that the growth achieved is not just in numbers, but also in the engagement and retention of users.

Now, let's shift our focus to the concept of evoked set. In a world where differentiation among physical products or services is becoming increasingly difficult, being the first brand that comes to mind when a consumer thinks of a particular product or service is crucial. The evoked set refers to the set of favorable options that come to mind when a consumer intends to make a purchase. Being in this evoked set is what determines whether a brand will be chosen or not, whether it will be purchased or not, and whether it will be repurchased or not.

According to Miller's definition, the human brain can accurately rank and remember around 5 to 9 stimuli in a given category. This means that a brand's position in the evoked set is of utmost importance. The brand that is remembered first has a significant advantage over others. It becomes a shortcut in the minds of many consumers, making it more likely to be chosen and repurchased.

The Double Jeopardy law states that brands with high market share also have a higher number of customers. These customers exhibit both behavioral and attitudinal loyalty towards the brand. For market leaders, it is crucial to adopt strategies that minimize the number of brands in the evoked set. This can be achieved through strategies like the one employed by Kiwi, where they aim to be the only brand in the evoked set, or by consistently investing in extensive advertising to maintain the first position in consumers' minds.

It's important to note that consumers often make their purchasing decisions before even setting foot in a store. The Zero Moment of Truth (ZMOT) concept suggests that consumers already have a clear idea of what they want to buy before visiting a store. This means that the battle for a position in the consumer's evoked set and the first-choice position is already won or lost before they reach the physical store.

Now that we have explored the importance of absolute numbers and the concept of evoked set in goal-setting for growth, let's conclude with three actionable pieces of advice:

1. Set clear and measurable goals that directly impact the bottom line. Instead of vague objectives, focus on absolute numbers like active users and churned users. These numbers will indicate true growth and success.

2. Ensure that the goals set align with the team's efforts and strategies. Take credit for what the team does, not for what happens naturally. Make sure that the goals are within the team's control and can be attributed to their efforts.

3. Invest in strategies that position your brand as the first choice in the consumer's evoked set. Be the brand that comes to mind first when they think of a particular product or service. This can be achieved through effective marketing, advertising, and creating a strong brand presence.

In conclusion, setting the right goals for growth is essential for any business or brand. By focusing on absolute numbers that directly impact the bottom line and understanding the concept of evoked set, teams can drive true growth and success. Remember to set clear and measurable goals, align them with the team's efforts, and invest in strategies that position your brand as the first choice in the consumer's mind.