Archive for Marketing Funnel
In the Outcome-Based Mapping approach, we view the outcomes as the central part of our theme. We recognize that a change of behavior must occur for us to achieve our goals or make the desired impact that wish to obtain. In traditional sales and marketing we can develop the simplest of all marketing funnels based on a pre-purchase, purchase (buy), and post purchase. We have a tendency to complicate this into numerous steps and activities. When we view an outcome-based approach we like to separate the group very similarly into Expect to see, like to see and love to see.
The major difference is that, in most marketing funnels, we view activities of both the supplier and the customer as opposing reactions, much like two boxers squaring off at each other. In Outcome-Based mapping, we separate our activities that we are doing and our outputs from the partner. We monitor and evaluate if individuals/organizations change or benefit as a result of their participation with us. If we have a positive influence, we assist our partner to move from expect to like to love. We focus on behaviors not activities and not processes. We are constantly adapting our viewpoint to meet the partner’s needs within the segment. So many of us try to force fit customers into a predefined path and achieve the ultimate outcome, a sale. We talk about win-win but pay salespeople based on closed sales. We leave up to our sales department to balance the outcomes and maximize the opportunities within them.
The drawing above is not an attempt to show differences instead it demonstrates the existing alignment. The change that must occur is to identify the behaviors, boundary partners or boundary personas we dare say, within each column and seek to understand and emphasize why that persona exists in that space. Most of the time we market horizontally to a persona and identify the actions needed to persuade them. In this approach the persona, identified by behaviors exist within the outcomes. I like to think of using Cap-Do as an evaluation tool within these columns as required. Our core strength and core competencies are embedded in the inputs, activities and outputs of our organizational structure and depicted on the left side of the map.
The example does not prescribe that we never change any organizational practices. It proposes that we monitor and evaluate behaviors and change organizationally (inputs, activities, outputs) from an outside-in approach. This is not meant for every organization. It may not be suited for start-ups trying to find product/market fit. It is very well-suited for companies that desire to grow through intermediaries that will benefit from user engagement and companies scaling that have a defined core competency.
The Outcome Base structure is very compatible with the principles I discuss in Lean Sales and Marketing. The map outline above is not for the entire organization. It is for only one segment or what we call the boundary partner. We do you not develop what I would call a pure Product Value Stream. Instead, it would be based on Boundary Partners or Sales Channels using an outside-in approach. It is strikingly the same as the Lean Marketing House structure and the original value stream layouts that I have used. Each pillar represents a different boundary partner and the sub-roof (User/Impact) can have multiple layers. For more information visit the Lean Marketing House eBook page.
How would you start something like this? I will show a few outlines in the upcoming weeks but initially I would start by taking a Cap-Do approach. Understanding your core competencies and more importantly how your customer views them is imperative in building an outcome-based approach.
Definitions and Overview: Mapping Expectations of Customer Behavior
Lean Sales and Marketing: Learn about using CAP-Do
Show a little respect for your customers and don’t use value stream mapping in the sales process. The problem is mapping becomes a prediction of what someone might do. We typically take that “prediction” and that “might” and turn them into a guide and should do. We end up trying to manage our customer through the flows that we have decided for them.
If there is one tool in the Lean arsenal that is overused, it has to be Value Stream Mapping. We want to determine the current state and “fix” the process. The problem is that, in sales, there is seldom a current state. In the appropriate context where there is facts and evidence, it is excellent. However, in sales I question whether it should be introduced. In fact, I might go so far and say, “Value Stream Mapping is a process better left on the shop floor or at least on the supply side.”
The problem with most mapping processes is that we are making a prediction about how our customer is going to act. After we make this prediction, we determine the reactionary steps that we take to satisfy this prediction. We are driving towards a decision, resolving issues and concerns. We are trying to solve the problem from the inside-out. We think we can control things and shape the outcome. I think by the time we are done we have invested so much in what we think the customer should do, that well, we better make them do it!
In Lean, where do predictions come in? In Lean 101, I was always taught to form a hypothesis. In sales, we must employ divergent thinking and develop multiple hypotheses. We must seek to understand (which means including the customer) and map out the different hypotheses that are plausible for the customer. One way to do this is through the use of scenarios.
Scenarios are not predictions; they are hypothesis on what might happen. This outside-thinking process starts by exploring your product or service at the point of use (Service Dominant Logic). It introduces multiple perspectives, which shed a different light on your value proposition. You will see strengths, opportunities, weaknesses and even threats (SWOT) in an entirely different view. It allows for greater opportunity for mutual collaboration.
When we look at the different perspectives that will take place it does not limit the use of your product or service. Instead, it enhances the possibilities and long term rewards that exist in the marketplace. It takes a different type of sales person to thrive in this model. It takes a Challenger, more on that subject in this blog post, Lean Salespeople are Challengers, not Problem Solvers. Another blog post of equal interest is Shaping your Customers Vision.
Should we be mapping the sales process at all? There is merit in the use of casual mapping or cognitive mapping in the sales process. These tools, when used appropriately, can identify influencers, users and decision makers. They can assist in visualizing the multiple scenarios that may play out and highlight the social context of the process. Sales people work in the social context. It is that context that we must seek to understand.
Lean Sales and Marketing is just not another extension of Lean into another area of business. If you think that way, you will be marred into product dominant thinking. You must recognize Lean as the pathway into Service Dominant Logic Thinking (Vargo and Lusch (2006)). Lean is used as the vehicle to deliver effective and efficient value propositions that co-create value with the customer. This infographic below is my attempt to demonstrate the workflow for a Lean Enterprise.
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The world has changed. No longer can we be selling like we thought of in the past. Now, it really takes a team effort. Our differentiation is less in the product/service we offer but more by the services and support that our organization delivers in the use of our product.
The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Marketby Treacy and Wiersma described our value proposition as either Operational Excellence (Wal-Mart), Product Leadership (Apple) or Customer Intimacy (Nordstrom). See a longer description in my blog post: Road Map for Customer Validation.
Value parity has been reached in two of the fields. Operation Excellence has been conquered by most of the market leaders. We have been achieving this through the process methodologies of Lean and Six Sigma for twenty years now and Faster, Better, Cheaper is seldom a sustainable advantage. See my blog Post: The End of Best in Market
We turn to Apple and Innovation. If you look at just about everything in the past several years, Innovation is the key subject. It is the key to the Lean Startup, Lean 3P Process, Service Design and Design Thinking. I am quite sure that there are a few missing. As I said in the previous post, Overcoming Sales Resistance with SOAR :
Can we out innovate all the competition? How long does an innovation keep us ahead of the curve? Does our customer always want the latest and greatest? I would imagine all of our customers are not early adaptors; I would imagine most of them are in the middle part of the curve.
Customer Intimacy or Customer Experience is left. The Experience Economy, Updated Edition by Pine and Gilmore was written over 15 years ago and we will all agree this field still has room for improvement. I believe it still can be a differentiator. As most of us have learned how to tune out sales and marketing messages, we have allowed others to be our greatest influencers. These influencers are the key not only to customer experience but to innovation and our own operation excellence. It is also the key to customer loyalty. I may take it a step further and say user experience but for the sake of an abbreviated blog post, we will stay with customer experience.
Most of you know that in my book, Lean Engagement Team(More Info), I state that the ability to share and create knowledge with your customer is the strongest marketing tool possible. The more widespread the collaboration between the organizations the more difficult it is to change someone’s mind. It is not good enough to have relationship anymore with just one or two of the decision makers.
The best time to penetrate an organization is when you have a receptive audience with a decision to be made. It is the penetration within an organization that I believe is the secret to loyalty. The more people you engage in engineering, purchasing, shipping and operations the more difficult it is to change the mind and go with someone else.
We no longer should expect sales to prospect; we are asking them to support and help deliver a great customer experience. We want them to make sure not only the customer but the salesperson’s own organization had a seamless, maybe non-eventful (with all due respect to aha moments) experience. We want the order delivered and put into use in a profitable, timely manner. A salesperson or sales team can not just view the customer sales journey or decision process. They have to take the responsibility of coordinating both organization’s teams to deliver a profitable customer experience.
My guest next week in the Business901 podcast is Dave Gray. He discusses this type of hierarchy and sales structure in his new book, The Connected Company. He calls this structure a POD. In the book, he mentions a few companies like Amazon and 3M that operate in this manner. He also mentions Semco, a Brazilian conglomerate that has grown from $4 to $200 million or Rational who was acquired by IBM for 2.1 billion and others. Whether you call them Pods or Value Stream Teams it makes little difference. They are built through a clearly defined vision and supporting processes that empower them in the conversation they have with customers.
I ask him a related question in the podcast and this is an excerpt of it:
Joe: Does that mean as an organization that I just have to turn my people loose, that I just have to take away all the phone scripts, and all the greeting scripts that we know “work,” and leave them just shoot themselves in the foot while giving them that freedom? How, as a business owner, do I control my destiny?
Dave: Well, that’s a good question, and certainly you can’t do that just from one day to the next. You can’t on Friday say, “OK, on Monday, we’re going to…”
Joe: Be a connected company.
Dave: Right, but it definitely does mean… I mean, when it comes to absorbing variety, a variety of demands, making judgment calls, making decisions, there’s no better business tool than a human being. There’s nothing better than a person who is exercising their creativity and judgment to make that service experience as good as they could possibly make it. The more that you add scripts, and rules, and procedures, and so forth, the more you actually limit the ability of those people to provide great service experiences. Every procedure, every rule that you add, is reducing the scope and ability that they have to do those things.
A connected company is a distributed control system. Within a connected company, you want to distribute control as close to the customer as you possibly can get it, because the more control and autonomy that people have at the point, they meet with a customer; the more they’re going to be able to provide a great service experience.
Now, of course, they’re going to need support to do that. They’re going to need tools. They’re going to need infrastructure. They’re going to need all the kinds of things that they need today, but what you have to give up as a senior leader is the ability to write the scripts, basically to program them, to operate in a certain way.
The reason for that being, there’s no way you can predict the variation and variety of the kinds of demands that they will have to deal with, so the only way you can actually build a company that can absorb that kind of variety is to actually scale those people up and train them.
I may even be taking a further step than Dave does. I believe these pods or value stream teams must co-exist or co–create our services with our customers. This is Service Dominant Logic (View the Infograph) versus Product Dominant Logic. This Venn diagram is an extension of the previous ones from the post, Overcoming Sales Resistance with SOAR.
The number’s game is no longer at the top of our marketing funnel, it is at the customer’s place of work, the real Gemba. We have to interact with the customers in engineering, IT, purchasing, etc. Even with their sales teams and customers when appropriate. We may not be able to reach ever influencer, but we certainly are getting closer to them. And we have to do this better than our competitor.
If you start considering Lean Engagement Teams, your opportunities become endless and creating demand becomes much more obvious, more on this next week.