Marketing Funnel

CREATe a Simple Work Flow 0

Outside of blogging and podcasting, I do actually get a few real jobs that typically involve creating workflows to assist in managing and implement a change. This is done a variety of ways, and I take little credit for any success. I have followed John Kotter’s 8-Step Process for Change introduced in Leading Change as closely as anyone would let me. In a recent book, Designing for Behavior Change: Applying Psychology and Behavioral Economics, I discovered a different approach and  to demonstrate I will use a workflow that combines an auto-responder, mail program and phone calls. We can extend the components to include events/tasks and/or lengthen time between the components. In this particular workflow, I assume a 21 to 28 day cycle.

Paraphrased from the book, Designing for Behavior Change: Applying Psychology and Behavioral Economics:,

The big picture would focus on the constructing the environment, preparing the user, structuring the action. The little picture will be the Cue, Reaction, Evaluation, Ability, Timing or the acronym CREATe (forget the last e). For the sake of brevity, I am not going to discuss the overall the environment, but it certainly should be part of the discussion. I would mention that it is important to frame the people we talk to for the callers and the different roles they may be calling into: the different type of positions, etc.

We begin by testing, creating different time frames for different segments as time goes on. We can also alter messages as segments are created. However, the key is getting our people to use the present system in its simplest form. Once everyone starts using the process, the real work begins. When we start complicating the order, the process; we take the decision making and the ability to ACT tougher involving more processes and people. The simplest basic offering allows people to act without delay.

Work flow

If we consider the CREATe acronym for each week, we can attempt to enable one simple task by the customer during the week. To accomplish this the entire workflow needs to be tied together: mailing, the call and the Auto-Responder. All three of them should be related, setting-up the next segment while providing an easy way to act. The combination of them should form CREATe.

CREATe is described as:

Cue: Something to start the person/organization thinking about the action. Ideally it would not be what we do but could be a sales call or presentation.

Reaction: There is an immediate thought when the cue takes place that we must get past what is created by the intuitive mind. A sales call is often seen as a negative and reacted to accordingly. Records, Computer data entry bring up negative reactions for many.

Evaluation: The conscious mind evaluates the cost and benefits of the action, taking the above sales phone call. It is a relative action often weighed to the present moment. Is it worth taking the call over what I am doing?

Ability: The person has the ability to act on what we ask right NOW, as immediate as possible. If we ask for a reaction does that person have everything needed to complete the action. Do they have all the information at their fingertips when they are ready to do what we ask them, if they don’t why ask?

Timing: What is the reason for acting NOW? It needs to be a small step.

We consider the CREATe acronym for each week(could be any time frame). Again, what we are trying to do is enable a simple, actionable item by our prospect. We then look at each week or look at an individual workflow to see how it can be improved over time. Once a standard process is created, questions can be considered for improvement:

Keeping in mind the big 3:

Constructing the environment: Does the user have a clear motivation? Do we provide feedback?

Structuring the action: What is the course of action? Are we leveraging prior knowledge? Are we creating a minimum amount of work?

Preparing the user: Do we match the action with the user?

What about improving our CREATe? 

Cue (Increase power of Cue): Tell the user the action; make it clear where to act? Simple message

Reaction (Increase interest and trust): Social proof? Strong authority on subject, Authenticity and Personal

Evaluation (Increase motivation, decrease cost of action (risk)): Peer Comparisons, Competition, Leverage loss aversion, Avoid choice overload, Avoid Direct Payments

Ability (increase feasibility, decrease constraints): Understand and Simplify implementation intentions, decrease burden of action, Peer comparisons

Timing (Increase urgency): Frame text for simplification, Remind of prior commitment, Make commitment to others, Make reward unique, and Focus on immediate rewards

What about that small e? CREAT enables the person/organization to eXECUTE the action

Primary source of material: Designing for Behavior Change: Applying Psychology and Behavioral Economics

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Unlocking the Potential of Consumer Behavior 0

Eric-HoltzclawA serial entrepreneur having founded multiple start-up companies, including one of the first profitable Internet enterprises. Eric V. Holtzclaw is the Founder/CEO of Laddering Works, a marketing strategy firm.

He has spent 20+ years creating opportunity by identifying and capitalizing on emerging trends and disruptions to business. His professional experience includes: founding multiple successful start-up companies, including one of the first profitable Internet enterprises, and serving as the strategic lead in the implementation of dozens of products and services worldwide. His last company appeared on the Inc. 5000 list three years in a row.

In summary you could say Eric advises clients on the whys” of business:

  • Why customers buy,
  • Why teams work and
  • The all-important “entrepreneurial why”.

Eric’s new book is Laddering: Unlocking the Potential of Consumer Behavior.

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If We Build Collaborative Funnels, We get Collaborative Customers 2

‘What gets us into trouble is not what we don’t know.

It’s what we know for sure that just ain’t so.’ – Mark Twain

I think this famous quote by Mark Twain sums up my feelings about marketing funnels, sales funnels and pipelines and in whatever direction we may want to flip them. We don’t know for sure, and we keep pretending that we do know each and every time we construct another funnel. After we construct a funnel/pipeline, we evaluate them by our success rates and pay commission based on those success rates. We wonder why we have limited success rates increasing market share.

Several of my Past Comments on the Subject:

Value Stream Mapping should be left on the Shop Floor
Kill the Sales and Marketing Funnel

Something that is so: If we continue to build transactional funnels, we will continue to get transactional customers. If we build collaborative funnels (Vees, Uuus, or Cycles – just not funnels) , we get collaborative customers. We become collaborative through better understanding of our customers desired outcomes.

Another approach would be to create a learning funnel based on increasing knowledge of a given outcome desired. However, the funnel is such a traditional metaphor that I have difficulty using it. It is the knowledge that we want to build, refine and demonstrate for both parties. How do we build a deeper understanding? We dig deep that’s all. The Vee Diagram helps us do that.

Knowledge Vee

V diagrams help to see that knowledge has structure and when we see that it helps tremendously in anticipating new events. We start with a focus question that serves as an umbrella for this particular inquiry. The V is arranged so that down the left side is what we think; the conceptual side of the framework. The event or the objects that are to be studied are at the bottom of the V. At the bottom point is where we leverage that event/object and start on our upward journey through verification and validation to move those concepts to substantiate the knowledge or value claims (statements).

I found this process quite enlightening when viewed with the Outcome-Based approach that I have been utilizing. It describes the action that is required to develop that shared learning experience we must initiate with a customer.

This week I will demonstrate several uses of the V diagrams that I have been exploring.

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A Lean approach to Outcome-Based Mapping 0

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.Outcome Map

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.

Both HousesClick on Picture to see a larger comparison

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

Book reference: Outcome Mapping: Building Learning and Reflection into Development Programs

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Value Stream Mapping should be left on the Shop Floor 10

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.Businessman puppet

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 Workflow InfoGraphic 4

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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Lean Sales and Marketing

The Ultimate Demand Creator: Lean Engagement Teams 3

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.

I started this discussion with Lean Marketing: 2 Step Marketing Funnel and took it a step further with Overcoming Sales Resistance with SOAR

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.

Value Stream Team

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.