Business901 » Marketing Funnel

Define the Expectation, Delight the Customer

business901 — Mon, 16 Jan 2012 03:30:00 +0000

In tomorrow’s podcast with Marc Stickdorn, co-author of This is Service Design Thinking, I asked my typical “last question” and it went like this:

Joe: Is there something that I didn’t ask that you would like to expand on or mention about service design thinking?

Marc: Maybe I would like to add one thing and that’s about expectations. We talked a lot about experiences now and one really; really important thing is the expectations. If you’re thinking about what advertisements do and communications if you go online and read reviews about said product and so forth it’s all affecting expectations. That is something really, really important.

If you’re thinking what satisfaction is, customer satisfaction, it really depends on the expectation. You level your expectations against your experiences. That’s what still many companies don’t really get to level their expectation that right manner. Expectation management is one thing which needs to be included in service design.

Joe: The expectation of what a customer should know and what an organization should do. Having that commonality really is what makes the product experience great. I think that’s a great point.

Marc: Definitely. That’s why low-cost carriers are working so good because they promise you nothing and at the end of the day you get from A to B and that’s all you want and that’s all they promise and that’s all they do. That’s why they work. They can have an awful customer experience but if they don’t promise anything else, fair enough.

If you promise to have an awesome customer experience and you just provide an average experience that’s something negative. That’s what I meant with a shift from advertising to experiences as well.

How many of us spend time on expectations? How many of us over promise and under deliver? We spend time on defining customer needs and how we can deliver on them but do we ever define his expectations? Most sales teachings employ techniques that are manipulative and tied to customer emotions. You try to guide them down a certain path. I have written about this before in Kill the Sales and Marketing Funnel where I said:

The Sales and Marketing Funnel is a theory that needs to be laid to rest. A linear approach to predict, plan, and proceed is a precarious way to advance. This approach prematurely foresees a solution for the customer without ever understanding their problem. And if you consider addressing the application of social media, it does nothing to support inbound marketing. As we work our way down the funnel, it is just as likely evidence will mount that the proposed solution is wrong. However, we have so much invested we attempt to sway the course of action in our favor. Linear planning will increase the risk for a customer to engage in an inappropriate course of action.

I find expectations are closely rooted to empathy. You have to take interest in the customer’s well-being in able to assist them in defining the minimum level of performance needed and the amount of effort they are willing to put forth. The key is listening with empathy. Your persona is more important than the customers at this point. Before you begin teaching the customer what they need to know, start thinking of this process a little differently. Think of it as you being the pupil rather than the teacher. Think about you having that “aha” moment or that moment when you “get it” versus when your customer gets it. When that “Aha” moment arrives – delighting the customer may not be all that difficult.

P.S. Review the The Lean Engagement Team

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What Sales and Marketing can learn from Demand Driven Manufacturing

business901 — Wed, 31 Aug 2011 02:55:00 +0000

“Demand-Driven manufacturing is a manufacturing requires a fundamental shift form the centrality of inventory to the centrality of demand. To be successful, company must be able to sense and adapt to market changes.” – This is from the Orlicky’s Material Requirements Planning 3/E.written by my recent podcast guest Carol Ptak and Chad Smith of the Demand Driven Institute.

Why is sales and marketing the last to adapt to this thinking? Sure, they understand that push marketing does not work and have stopped sending out promotional mailings, feature driven ads and of course they never encourage cold-calling! Or have they? Most ideas for good marketing are investing more money to get someone into their funnel, not to make that time in the funnel a memorable experience.

After reviewing the new book, I saw striking similarities in DDMRP that can directly apply to the sales and marketing process. They are substantially solving the same problem that exist in sales and marketing. It is no longer a market that has excess demand. Our product/service cannot be at the centrality of our sales and marketing process. With lessons learned from D-Logic (The Service-Dominant Logic of Marketing by Stephen Vargo and Robert Lusch) concepts the centrality of our sales and marketing must be the value that is created in the use of our product or service.

Demand Drive MRP is focused around critical parts called strategically replenished parts. It has five integral components that are:

Strategic Inventory Positioning
Buffer Profiles and Level Determination
Dynamic Buffers
Demand-Drive Planning
Highly Visible and Collaborative Execution

I intend to break each of these components down in future blog posts to demonstrate the viability of this thinking. It is not meant to replace an existing sales and marketing structure. It had not been used and is pure conjecture on my part. However, it offers some interesting parallels that are worth considering. I encourage listening to the podcast with Carol and Chad, Is Orlicky’s MRP relevant today? Think DDMRP and even their earlier ones listed on the podcast page as they set the stage for this discussion.

This blog series will show how a DDMRP process can reduce dramatically the uncertainty in response levels required and sort the important responses needed. If this can be done we may be on a path that efficiencies and increased effectiveness is possible in sales and marketing. It’s interesting to note that DDMRP does not replace but leverages technologies like Theory of Constraints and Lean.

Many times in my discussions of mirroring the customer buying process and building the appropriate value stream and response, we have a tendency to consider a one to one marketing approach. Looking at the value stream through the glass of DDMRP it answers the question of a more complex and larger environment.

How outdated is your sales channel structures? Are you segmenting by products or geographically? Or Direct Sales and Distribution? Or even Online and Offline? Once someone is in the sales funnel are they classified be level of interest such as A,B,C? Or level of opportunity? Maybe you consider past, present or new? Or in new marketing circles we are discussing early adaptors, earl majority, etc.? Or the buzz words like Influencers and Enablers? How do you decide? Or for that matter, do any of them work?

The three will-known rules of forecasting have always limited the sales and marketing world:

Forecasts are always in error.
The more detailed a forecast, the more error will be realized.
The further into the future the forecast goes, the more error will be realized.

Most experienced sales and marketing are aware of these shortcomings and the wide array of sales and marketing processes. Most believe that it still comes down to beating the pavement. Can that be changed?

First, you must answer: How do you manage variability and volatility in today’s market? The book starts out by saying, “Experts in variability and volatility tend to be less enterprise focused and more specific event focus. Variability must be considered in relation to its impact across a holistic system. All variation does not have the same impact. Reducing variability does not necessarily improve the overall process. There are places where it must be protected against in order to keep the system stable and effective.”

Can we protect key portions of our sales channels? Can we reduce variability and volatility in sales and marketing? Seems like a tall order. However, if it is being done in the supply chain based on a forecast that sales and marketing is forecasting, why can’t we improve our forecasting by considering the same five steps with a slightly different view:

Strategic Inventory Positioning: Position our organization to learn from our customers.
Buffer Profiles and Level Determination: Profile the customer and our knowledge gaps
Dynamic Buffers: Flexibility within teams to self-organize autonomously
Demand-Drive Planning: Use of a system that promotes better and quicker transfer of knowledge at the execution level.
Highly Visible and Collaborative Execution – Why change this?l

Our exploration has started.

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Reducing Muda for Others with Kaizen

business901 — Fri, 24 Jun 2011 02:30:00 +0000

Kaizen is about involving employees to get them not only the way to do work but to help improve the way others do their work. The Friday Video Series continues with Dr. Michael Balle, the Gemba Coach at the Lean Enterprise Institute. This series of videos continues with a central theme of Kaizen.

Dr. Balle is a multiple Shingo Prize winner as an author of the The Gold Mine and The Lean Manager. His newest Shingo Prize was on the adaption of The Gold Mine: A Novel of Lean Turnaround to an audiobook that features performances by multiple readers who bring its realistic business story and characters to life.

Dr. Michael Balle is the Gemba Coach at the Lean Enterprise Institute

Past Videos with Dr. Balle on the Biz901 You Tube Channel

Books Mentioned in this discussion:
One Team on All Levels: Stories from Toyota Team Members, Second Edition
Toyota Culture: The Heart and Soul of the Toyota Way
Toyota Kaizen Methods: Six Steps to Improvement

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Change Education, Change the Sales Cycle

business901 — Sat, 11 Jun 2011 02:30:00 +0000

Though this is a well documented Ted Video, I ran across the RSA Animate video version of Ken Robinson’s discussion on education. Funny thing about it was that it really hit a chord when thinking about the typical Sales Cycle or Marketing Funnel. Not the part on Attention Deficit Disorder but when he talks about standardization and divergent thinking. It starts around the 6 minute mark.

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Improve your Sales Cycle, Work on your Feedback Loops

business901 — Thu, 12 May 2011 03:06:00 +0000

When I start talking about speeding up the sales cycle the initial reaction is that the sales cycle is controlled by the customer and there is just not much we can do about that. I usually counter with, most companies understand that there is an average sales cycle time and if we just agree that there is than there is room for improvement.

My next discussion point is asking, can you describe the typical sales cycle based on the decision making criteria of your customer. At this point, I am again met with resistance saying that they are all different. I once again counter with let’s just take empirical view of a well-known market segment or even if we have to a well-known customer who we would consider “typical.” I do not do this too intentionally classify a customer as average or typical but to establish a base line on how we respond to our customers’ needs.

With that being said, I next ask what the average deviation from the sales cycle is there and if there are common decision making steps that get added or subtracted when this happens. That highlights the variability and creates awareness on how little active management of the process is going on. Further discussion generates reasons for excessive wait times by both parties and considerable rework that we call “fine tuning”.

Why change this? In my experience, the longer the process the more likely the criteria will change as a result of other influences rather than the actual need changing. The length of time does not necessarily equate to a better choice. The choice is based on the conditions, the influencers, the knowledge and if the problem increases substantially. The objective is not to have the customer buy your product.

The objective is for the customer to make the best informed and knowledgeable decision possible. The fundamental goals of your sales cycle should be one of discovery, learning and adaptability with a shared responsibility for a successful outcome. Your ability to generate the required knowledge effectively and efficiently in your customer decision making process will ultimately make you the preferred supplier. The question of course is how do you do that?

In most cases, unless you have already mapped your process (Value Stream Mapping), you will have cycle times that are highly variable and more than likely long. Developing a more consistent pattern with less variability will allow sales teams and customers to develop a higher degree of trust in each other.

One way of reducing cycle time is to create faster feedback loops. First, take one of the stages of the customer decision making process and break it down into multiple loops or cycles. Prioritize the loops and define the work that needs to be done within the first cycle through the use of a user story. The result of this is that you generate fast feedback by offering the customer smaller parcels of information to see if you are on the correct path or gain buy-in of a smaller step of the process.

Early customer feedback results in a better focus on the problem. As a result less work is done on superfluous tasks and more work is done on the required objectives. Little waste is generated because the feedback is so quick that obvious deviations are discarded.

Faster feedback can result in increased quality. There are number of reasons for this. Shorter cycles result in better fit since the feedback can be gathered and applied frequently. Also, faster feedback means that the team can minimize the work required to meet the objectives. Less rework is required (you are constantly tweaking) and this is very advantageous when compared to large time consuming proposals that are many times generated.

Another advantage of this process is that you only do the iterations that are you are comfortable doing. You don’t have to start every task in order. The flexibility of being able to put off some decisions to the last possible moment does not distract from the overall objective. By doing other cycles first, you will have increased knowledge of the cycle that will add better definition to the most difficult tasks.

Putting order into your sales cycle you will find that most of the time spent before is waiting on decisions or task that others are doing. Wait time is significantly reduced because of the smaller cycles are much easier to complete and easier handoffs are created which may simplify the task of others.

Working on the basics, makes a difference. To improve your football team, you need to work on blocking and tackling. To improve your sales cycle, you need to work on your feedback loops.

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Changing the shape of your marketing funnel!

business901 — Sat, 09 Apr 2011 02:30:00 +0000

These five terms form a hierarchy of value in which data have the least value and wisdom
has the most. I first ran across a similar description in the The Experience Economy an article published in 1998 by Joe Pine which I discussed in the blog post, Does your Value Proposition speak of the Customer Experience?. Though this chart has taken a fair amount of abuse over the years, I like it because it plainly depicts the hierarchy of what a customer is willing to pay for and therefore the customer’s perceived value.

In the book, Idealized Design the authors used a similar hierarchy for the key terms involved in describing organizational learning. They are as follows:

Data consist of symbols that represent the properties of objects and events. They have little value until they have been processed into information Data are to information as iron or is to iron. Little can be done with iron ore until it is processed into iron.
Information consists of data that has been processed to be useful. It is contained in descriptions, answers to question beginning with such words as what, who, when, when, and how many.
Knowledge is contained in instructions, answers to how-to questions.
Understanding is contained in explanations, answers to the why questions.
Wisdom is concerned with the value of outcomes, effectiveness, whereas the other four types of mental content are concerned with efficiency. Efficiency is concerned with doing things right; effectiveness is concerned with doing the right thing.

Looks like a marketing funnel. Your budget probably looks the same way. You spend the vast majority of your marketing resources (time and money) on data or noise which may be the more appropriate term. I tend to believe a larger investment spent in understanding and wisdom will reap greater rewards.

It at first is counterintuitive. But when you think about it – an increase in knowledge, understanding about your customers and wisdom that your customers impart on you turns into:

Upsells
Referrals
Word of mouth,
PR Opportunities
Innovation

Just by the nature of the process, it should make you more effective and efficient. It goes back to the Pareto Principle or as Dr. Juran put it, “identify the vital few and the useful many,” in practice leave the top of the funnel (useful many) for automation, website sales, etc. Invest the majority of your resources (time and money) in the vital few. Work on delighting that segment of your business as Steven Deming, author of The Leader’s Guide to Radical Management writes Is Delig hting your Customer Profitable?

One of the areas that we find out through better knowledge and understanding of our customers is the mistakes we are making as an organization. In the marketing sense, that blurriness of customer and marketing identification becomes much more apparent. The important critical to quality factors that are important to them and make them choose us drives our internal improvement efforts. Just as importantly, since we have a better relationship with the prospects/customers at the bottom of the funnel, we find out what mistakes and why others were chosen. This will help us tremendously to evaluate our shortcomings and improve on them.

Choosing this perspective will probably reduce the size of the opening of your funnel. However which end of the funnel is important to you?

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Call it Building a Lean Sales and Marketing Machine

business901 — Sat, 02 Apr 2011 02:30:00 +0000

David Skok, a five time serial entrepreneur turned VC, at Matrix Partners presented this at a HubSpot Webinar last week together with Mike Volpe, the VP of Marketing at HubSpot.This video is 60 minutes long and well worth the time. A little promotional for Hubspot but in my opinion Hubspot is a quality product and worthy of the promotion.

This is one of the closest presentations that resembles the basic “mechanical” process that I discuss in the Lean Marketing Process. I think David’s presentation solidifies many of my thoughts about marketing, we just have a slightly different use of terminology. however, the one thing that is missing is the culture aspect and the development of a problem solving culture. That culture of Continuous Improvement, Kaizen that leads to Knowledge Creation is the “Lean” part of the equation that so many people miss.

An introduction to Building the Sales and Marketing Machine from David’ website forEntrepreneurs.com:

Building a Sales and Marketing Machine is a structured methodology for designing and reviewing your customer acquisition process. It stresses the idea that the only right way to build a sales and marketing process is to design it around your customers (customer-centric). Although this is obvious, it turns out to be radically different to the way most companies have designed their processes, which is based on what they want to happen (i.e.company-centric). Most of the time company-centric processes will now work as well as hoped, it will be because they failed to take into consideration the customer’s concerns and motivations.

This methodology will help you grow sales by addressing the following specific issues:

Ensure your process is Customer-Centric (as opposed to company-centric)

Design a process that is scalable, optimized and efficient

Provide you with clear instrumentation showing what is working, and what is not

Provide you with a clear understanding of what levers you can pull to grow sales

Identify bottlenecks, and show you how to resolve them

Lower the cost of customer acquisition

Ensure that Marketing is correctly aligned with Sales, and directly helping to close business

How to grow lead flow using the latest web marketing techniques

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Kill the Sales and Marketing Funnel

business901 — Fri, 04 Feb 2011 04:45:00 +0000

The Sales and Marketing Funnel is a theory that needs to be laid to rest. A linear approach to predict, plan, and proceed is a precarious way to advance. This approach prematurely foresees a solution for the customer without ever understanding their problem. And if you consider addressing the application of social media, it does nothing to support inbound marketing. As we work our way down the funnel, it is just as likely evidence will mount that the proposed solution is wrong. However, we have so much invested we attempt to sway the course of action in our favor. Linear planning will increase the risk for a customer to engage in an inappropriate course of action.

A more correct way of customer introduction is utilizing a problem solving cycle such as PDCA (Deming/Shewart – Plan/Do/Check/Act Cycle). PDCA should be repeatedly implemented in spirals of increasing knowledge of the customer’s situation and converge towards the correct solution. Each cycle will become closer to this goal than the previous. This approach is based on the belief that both our customer and our knowledge and skills may be limited at the beginning but continuously improving.

It is very common as a customer goes through a decision making process that their minds will change. At the start of a project, key information may not be known. The PDCA provides feedback to justify our hypotheses and increase our knowledge. This allows both the customer and us not to be perfect the first time. It allows us flexibility in our course of action and with improved knowledge, we (also meaning the customer) may choose to refine or alter the needs. The rate of change or the speed of the improvement is a key competitive factor in today’s world. PDCA allows for major jumps in performance not through massive breakthroughs but through frequent small improvements.

Another approach recently popularized is the OODA Loop introduced by Colonel John Boyd that describe how combatants observe a situation, orient themselves, decide what to do, and act, before observing the changed situation and moving through the entire loop again. Viewing combat as a series of successive loops underscores the importance of reassessment and readjustment as circumstances change, and the cumulative benefits of many small wins in successive iterations. Boyd’s OODA loop is a vivid example of an iterative loop to guide action under uncertainty and much can be learned from its study.

I am not advocating thinking of your customer in the sense of a combatant as the OODA Loop suggest. However, the strength in the OODA loop is the series of successive loops and small wins that is introduced. Few homeruns are in the market place today. It is more of a singles and doubles game. In fact, few of us can afford the strikeouts and must maintain a high enough batting average to survive.

PDCA is the fundamental concept behind Lean thinking. It is not just a problem solving method but a holistic approach to knowledge creation and improvement within an organization. Establishing a PDCA culture within your company will enable you to embrace this way of thinking with your customers and prospects. It will develop an outside-in approach to your organization that will allow you to really understand your role with customers and in the markets they participate in.

Seldom do you find a competitive advantage or a real break through in a service or product. If you do, it is only short-lived and commoditized rather quickly. The leverage it brings is an influx of innovative customers that are willing to be risk takers, the early adaptors. People that you can learn from and develop new knowledge and new products. PDCA allows for them to enter your cycle of learning easily and allows you to maximize that new knowledge.

The only competitive advantage that you have is in how quickly you develop new knowledge. Maximizing that through the use of PDCA is essential for your business survival.

This is why I believe the Future of Marketing is Lean!

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Marketing with PDCA Coming Soon!

business901 — Fri, 14 Jan 2011 18:10:00 +0000

Marketing with PDCA (Plan-Do-Check-Act) is about using the PDCA process through-out the marketing cycle with constant feedback from customers that can only occur if they are part of the process. It is about creating value in your marketing that a customer needs to enable him to make a better decision. Targeting what your Customer Values at each stage of the cycle through the methods described in this book will increase your ability to deliver quicker, more accurately and with better value than your competitor. It is a moving target and the principles of Lean and PDCA facilitates the journey to ultimate Customer Value.

This book will be Volume 3 of the Marketing with Lean Series that includes the Lean Marketing House and Marketing with A3 . If you purchase the PDF versions of these 2 books on the right, you will receive a free download of Marketing with PDCA when it is released (Mid-February).

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Lean Marketing shortens Marketing Cycle and increases Life Cycle

business901 — Tue, 09 Nov 2010 14:44:00 +0000

Why Lean Marketing? Because it is the Future of Marketing

The Value Stream Map is a lean tool to analyze the value stream. Value Stream Mapping techniques involves mapping each step of a process looking for waste and on improving the total time from the beginning to the end of the entire stream. One of the powers of the mapping process is that it enables the team to see the entire picture. This coincides with the fundamental Lean thinking of optimizing the entire process versus the individual stages.

Waste in marketing is not as readily identified as in other areas. One example of marketing waste is time. When I present this, there is typically agreement that the longer a customer/prospect stays in one of the process stages of the Value Stream or in the Queue waiting to go from one stage to the next the great chance of losing the customer. However there is also a strong argument presented that the customer controls this time and just trying to hurry them through the cycle may be just as detrimental as the wait time.

Remembering that we want to first look at how to optimize the entire process instead of a particular stage, our first step would be to evaluate the total time spent, not resources allocated or used. Moving through the value stream quicker is many times just a matter of evaluating the internal delays that occur in the process. By removing them, we enable the customer to make faster and better decisions. We also create more credibility for ourselves as the ‘go to guy” and the organization that has done this before. The question is how do we get there? You first must look internally at eliminating delays.

Lack of resources:

Analyze your team’s resources:

Are you always looking for engineering help?
Do you need IT to set up a trial?
Is a sales call needed?
Are you always waiting on a proposal?

I like to start by suggesting we have unlimited resources then ask what the structure would look like. Many times with a simple reallocation of priorities such as Software Trial being the first priority of IT there is a tremendous improvement. Other times, there is simply a lack of personal. This reminds me of a warehouse being more important than a machine. You can increase flow with the machine though you may decrease efficiencies within the department. In the marketing cycle, can you afford having leads sitting going stale? Shifting of duties and resources can very often create extra bodies.

One trick is to reduce the size of a process step. This sometimes enables more activities for an underutilized resource. However, seldom do I see the combination of stages as a method of decreasing cycle time.

Improve your response time by getting closer to the customer-literally!

Look at the process that may be hindering your team. Location has always been one of the main reasons that you locate sales people in territories. You customer/prospect is in a different business. His desires and needs will require more adaptability on your part. Why not locate your entire sales teams in strategic locations. It sets a priority with the team on what is important and improves communication between them and your customer/prospect. Customer support located geographically will reduce travel and being in the same time zone may result in an increase in response time. Most of all what message does it send to your customer? This detached team can usually function well within a company structure as this structure is well known and has more flexibility for your team.

Build quality in to your process:

Respect your people. The sales/marketing team knows how to improve their process more than anyone else. They can tell you if the paperwork, request for proposals, and specifications are flowing. They know the degree of misunderstandings that are occurring internally and with customers. Allowing local control will invariable decrease cycle time for the team but it may increase for an organization as a whole. It is important when local optimization occurs (within specific Value streams) that this process is well documented and the knowledge created passed on to other teams.

Most sales teams initially spend much of their time discovering how to create more material for the last response. The lack of a well-defined value stream lets errors creep in. Poor value stream quality and customer requests that are hard to understand contribute to wasted time. Properly defining your value streams or in simpler terms understanding your customer needs better can facilitate much of the running around like a “chicken with their head cutoff syndrome” or confusion that may occur.

Focusing on delays is an important part of Lean Marketing. It is one of the first things to be considered in the Value Stream and should be a primary focus. It is extremely important to sustain this effort by getting closer and closer to the customer buying process. The more you engrain yourself in that structure will significantly improve your probabilities of success. It will decrease your marketing cycle and in the long run increase your customer’s life cycle. Not a bad alternative.

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Value Stream Mapping your Sales Team

business901 — Wed, 13 Oct 2010 13:15:00 +0000

In my Microsoft Newsletter this week, I received the following enticement:

Find, Keep, and Grow Customer Relationships with Microsoft Dynamics CRM Online. Start Your 30-Day Free Trial Today!

Today, businesses are asked to do more with less. Microsoft Dynamics CRM Online delivers exceptional value because it combines your everyday Microsoft Office applications with powerful CRM software accessed over the Internet to rapidly improve marketing, boost sales, and enrich customer service interactions. Try it now for 30 days! (This is not an affiliate Link).

I am trying it this week but what I wanted to share is a piece of the collateral information, Microsoft Dynamics CRM Power Couple. In this PDF, MSN highlighted the Customer Decision Making Process aka Mirror Marketing( Your Marketing Funnel from your Customer’s Perspective.) but extended the concept to show the process from several other points of view.

I have always been an advocate of seeking Sales and Marketing’s response to each of the customer’s decision steps but MSN (they are selling software), highlighted the technology enabler and a team response to the Customer Value Stream process. This simple exercise utilizing a high level Value Stream Map can really get your individual departments on the same page!

In my recent work, I have been advocating breaking down the Sales Silo and making Sales a team effort. In most organizations, I have been met with strong resistance to this concept. Most sales people look at as another silly initiative and most internal people see sales as a vehicle to customer data. As a result, sales resist and rightfully so preventing themselves from becoming an extended clerk. However, the approach really should be about how to increase face time with the customer. The #1 enabler of increased sales.

Create your own sales team by reviewing who responds to your Customer’s Value Stream Map. Start having a few meetings, similar to a daily standup meeting which may not be feasible. I would recommend at first error in having the meeting to often, just cut them short. In a spirit of true collaboration, don’t automatically exclude your customer from the team. This concept really could increase face time!

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The Perfect Storm has come together of Excess Capacity and Product Variety

business901 — Fri, 20 Aug 2010 11:30:00 +0000

Carol Ptak, a recent guest on my podcast said…

A lot of people have focused on the fact that the Economic times right now are really bad. What a lot of people are missing is the fact that the world around us has fundamentally changed.

A we see now across the world is that we have excess capacity when you add to that the Internet where we get on the Internet we expect to have an experience like Amazon, or order it is going to tell me instantly when I’m going to get it. If you don’t provide it at the price I want to pay and the time I want to pay then I can just go someplace else. Why can I do that? That’s because I have all this excess capacity out there.

So what companies are seeing today is volatility like they never had to manage before and at the same time they no longer have the reliability of understanding what the customers are going to demand and when they’re going to demand, because customers are increasingly fickle.

So what we’ve got is the perfect storm that has come together of excess capacity and incredible product variety. Think about a new product lifecycles. They’re getting shorter and shorter and shorter. The world we’re trying to live in and started about four or five years ago is that we can no longer afford to build unless someone’s going to buy.

I have to agree with Carol, fundamentally the world has changed and if you are going to wait for the shift back you are in trouble. We could cal this a pull market. No longer can we build and build an force our product on others without serious consequences such as price slashing. However, in the long term if our markets have changed and more specifically our delivery methods have changed, we must change.

So how do you survive the Perfect Storm? Do you sail right into it? The problem you have is that there is not a mental model for this. You do not have a map. You cannot process and organize all the data that is arriving, let alone organize it. If everything or on the other hand to little is considered you will not come up with an adequate model.

How do you overcome all this? Most people can focus effectively only on one thing at a time. I am not saying that organizations have to focus on only one thing at a time but maybe, I am. If you are to survive, the very first thing you need to do is face reality. That reality is that you have to be crystal clear on what your customer and what your market values! There is quite a bit of understanding that goes into building a Customer/Market Value Model. Obtaining the Voice of Customer/Market is part of it but so is Customer/Market Identification. Your perception alone is biased, you are not the one buying your product. Your judgment must come into play when interpreting the right data from the right market. Not deciding what your market is thinking. Having a true understanding of what is important about your product or service to the marketplace is the strongest survival tool you can have.

If you are to face the Perfect Storm, your thrust has to be very precise and with as much strength as you can muster. Just riding it out seldom works!

Carol’s ASR Website: http://beyondMRP.com

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Value Stream Marketing – Improve your Cycle Time

business901 — Fri, 02 Jul 2010 12:46:00 +0000

Many people believe that to apply Value Stream Marketing using Lean Techniques, it is about removing waste. Eliminating waste is one of the Guiding Principles of Value Stream Marketing but you must make some fundamental improvements in your marketing cycle before a pull marketing system will work. Value Stream Marketing (VSM) is about having a minimum amount of Work in Process (WIP). However, you cannot just wake up one morning and decide to do it. You cannot just remove marginal leads or work with only higher valued leads. It’s about a journey versus the decision to reduce your WIP. Managing your WIP will make you aware of many wasteful processes and as a result provide opportunity to remove them. In VSM there are four critical components that you must understand: Protect Sales, Reduce your WIP, Improve your Cycle Time and Remove waste.

Improve your Cycle Time

Improving the Marketing cycle is where the fun really begins. By protecting sales and reducing your WIP you have only made minor changes other than discovering what makes your marketing process flow. Developing your Marketing Kanban has allowed you to sort out variation and discover over and underutilized resources. Visualization of your marketing cycle has hopefully allowed you to remove some of the low hanging fruit, I actually hate that term.

Most people will have you take your Value Stream mapping Process and create your Kanban board. What I explained in the Reduce your WIP section is to create a simple flow diagram with a Kanban. Why backwards, I find most marketing people are somewhat intimidated by Lean Tools of mapping and can readily identify a Kanban board. Creating that structure and working with it to provide flow makes the transition to a Value Stream Mapping project much easier. Using the Kanban, you have created a Current State Map with the metrics you need to develop a Future State Map. The outline I use for creating a future state:

In the book,Value Stream Mapping for Lean Development: A How-To Guide for Streamlining Time to Market, Drew Locher explained how to create a Future State Map by utilizing seven basic questions:

What does the customer really need?

How often will we check our performance to customer needs?

Which steps create value and which steps are waste?

How can we flow work with fewer interruptions?

How do we control work between interruptions, and how will work be triggered and prioritized?

How will we level the workload and/or different activities?

What process improvements will be necessary?

Drew goes on to conclude that future state mapping is not a brainstorming session. He likes to use a key ground rule of 70%. If the team believes that they have a 70% chance of implementing a particular idea in less than one year, it could be included as part of the future state. If it is longer, the entire improvement effort would suffer. These specific improvement efforts will be depicted in a value stream map by the use of a Kaizen Burst icon.

When considering how to use value stream mapping in the marketing process I think the seven questions provide an excellent base for walking through the process. You have to remember, you already have a current state map drawn. In essence what you are trying to do is to move not only current state to future state but from an internal perspective to an external perspective. Your customer should be determining your value stream.

I believe this is the best way to improve your marketing cycle. Taking each channel or swim lane on your Kanban board one at a time and mapping the process will give you the best results. After creating the Future State Map move the process back to the Kanban board for execution.

Value Stream Marketing – Reduce your Work in Process

Good Marketing should minimize your Pipeline

The Guiding Principles of Value Stream Marketing

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Your Marketing Funnel from your Customer’s Perspective.

business901 — Sun, 30 May 2010 13:58:57 +0000

The Mirror Marketing eBook describes an alternative way of looking at your marketing funnel…from your customer’s perspective.

Mirror Marketing

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