Mirror Marketing

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The Pull in Lean Marketing
Value Stream Marketing and the Indirect Marketing Concept
Marketing Kanban
Value Stream Mapping

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• Google Ad
• Website
• Auto-responder
• 30-day trial
• Purchase
• Upsell
• Buzz it up

Of course there are numerous ways someone may reach your website such as Referrals, Search, Social Media, PR, etc. You could include them all, but if you do not measure them individually it will be difficult to improve them as time goes on.

I am going to take just a section of the above Value stream and define an Entry and Exit point to the Kanban(see Bootstrapping the Kanban). The Entry point will be Google Ad and the exit point will be the Purchase point. This will simplify my explanation.

When we discussed the Marketing Kanban before, we discussed creating Work in Process (WIP) limits. The above diagram will demonstrate a very important beginning point for the use of a Marketing Kanban and how we go about determining the basic structure. Start developing your WIP limits by asking these questions:

• How many prospects do you engage with?
• How many become prospects?
• How many are qualified prospects?
• How many use the Free Trial?
• How many become clients?
• How many repeat?
• How many are referred?

I have already confused myself, have I confused you? This is where the Kanban becomes so effective.

This simple structure is easily adjusted and can be used for just about any channel you wish to develop. How do you determine these numbers? Well first, if you don’t already know any of these numbers or just starting out, look at what will be your constraint or control point. Where are you limited?

Maybe, you can only handle 30 clients? Start with something that you know or fill in the blanks with your best guestimate. If you can only complete three of the five examples, complete the others by considering the conversion rates that you have between each. Don’t overly worry about accuracy, especially if you have not measured these before. You can even create a best and worst scenario to the Value Stream.

Are you limited by the dollars you spend on Google ads? Take a known number and plug into your Kanban and just multiply it across. Can you see what happens? Is a client worth $500? Are you Google ads effective enough? Do you need to increase conversion rates thru your free trial? 

This particular Marketing Kanban is just a starting point. You may not even use your clients as the basis, you may prefer total sales for the month. However, when you visually display it in a Kanban it does create a very easy observation point, especially for small business.

The next step is to consider the other entry points to your website, for example and/or completely different distribution paths. More than likely these other channels (paths) will have different cycle times and budgets. Do not try to fit one Kanban or Value Stream to everyone. 

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I liken that to the Marketing Funnel or Hourglass concept used by so many Info Marketers. When you look at that concept you will see people placing marketing products next to the different stages of the funnel. Each one depicting the opportunities that they have or the marketing action they use in that particular stage. An example is included in a previous post of mine. It is the way I was taught. The marketing funnel concept is just a step by step progression through the marketing process. When you review that concept, does it not seem dated? Is that not just another way of pushing products?

Reviewing many of my own writings from yesteryear (I have always liked that word), I notice the lack of customer pull that I think is required for successful marketing. The marketing process was based on continuing funneling a person through stages to get to the ultimate buying stage. After that, referrals and up-sells were initiated. Though the concept makes it easier to explain, it really serves little purpose in defining what works in today’s marketing and is in fact downright misleading. I use an hourglass as a way of demonstrating a constraint but as an extension of the marketing funnel, I find it is misleading as referral strategies should be introduced much earlier and often in the typical marketing cycle. Think about it, how many of your referrals come from customers? Most come from people that you associate with that may never be a customer.

I really prefer looking at marketing in a much more cyclic fashion and somewhat more of an iterative process. Spending time defining your customer needs and how your organization reacts to those needs is the essence of marketing today. This approach can make your marketing more effective and reliable by reducing your marketing variability. Marketing is simply becoming more about problem solving and addressing customer needs, not what I call the caveman approach; “You need to buy this!” Instead I like to use the term Value Stream Marketing!

Back to Seth Godin’s Post: Now it doesn’t matter where you sit. Now it doesn’t matter whether or not you’re adding to the efficiency or productivity of the machine. Now you don’t market to sell what you made, you make to satisfy the market. Now, the market and the consumer and idea trump the system.

Suddenly, the power is in a different place, and the organization must change or else the donut collapses.

Is your Marketing Funnel or Hourglass working?

Related Category:

Value Stream Marketing and the Indirect Marketing Concept

Marketing Funnel

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In previous blogs, you have heard me mention that one of the main culprits is variation and the lack of proper segmentation. We think of segmentation both in a horizontal fashion and a vertical. Horizontal will typically result in segments such as: Direct, Internet, Distributor, Joint-Venture and so on. The vertical aspect of your Marketing Funnel is the image on the right depicted below. This funnel allows you to assign different products to each process stage in the hope of maximizing efforts.

However, if you attempt to improve your Marketing Funnel, how would you go about it? Being a Lean Six Sigma Black Belt, the Marketing Funnel bears a close resemblance to the DMAIC process of Six Sigma. Not that I am trying to replace the marketing funnel with DMAIC, but it certainly would not hurt to analyze the resemblance to improve our marketing process. And if you know anything about Lean Six Sigma, the one thing we will attack is variation. However, just using some generic definitions of DMAIC and relating them to the Marketing Funnel can create some interesting observations.

Define
Purpose: Identify the clients, their needs and requirements.
Deliverable: State the need of the client (CTS) and the problem

Measure
Purpose: Quantify Process Performance
Deliverable: Determine baseline process performance

Analyze
Purpose: Identify, Verify and Quantify Root causes
Deliverable: Statistically linking input with output

Improve
Purpose: Create the Solution and Validate
Deliverable: Optimizing Process Operating Conditions

Control
Purpose: Document and Standardize Process
Deliverable: Meet Critical to Quality(CTQ) consistently (Involvement)

Looking at your Marketing Funnel from the DMAIC viewpoint is not that far-fetched, is it?

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Technorati : DMAIC, Lean, Marketing Funnel, Marketing Hourglass, Six Sigma

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I remembered a section of in the Systems2win Value Stream Mapping training section about a FIFO lane. It seemed like the designation that I needed: First In, First Out was not far from how the prospects’ needs were described. In the Value Stream Mapping process a FIFO lane is used for the unusual stuff that often involves unique processing instructions. The problem with using it in marketing is that everyone could be a FIFO.

This is how we went about determining how to set up our FIFO prospects. We created certain signals in our other Value Streams to determine that this may be a FIFO customer. As information was gathered on demographics, psycho-graphics and other criteria it would create signals for us. The signals were acted upon manually, much like a Kanban system would be. The information was transmitted for further investigation and qualification to be put into the FIFO Lane. One of the typical problems with a FIFO lane is that it acts like a chute and can only hold, a specific amount of prospects. You have only a certain amount of resources. We determined if the FIFO chute is full, you must prioritize and remove a prospect and put them back into another marketing segment.

Depending on how your FIFO lane is constructed, here are some examples of how to use your FIFO Lane:

1. This could be your “A” list or the one that marketing and/or sales people create personal contact with and nurture.

2. Special offers could be created that would result in longer or shorter trial efforts, payment terms and delivery. Since these people have been separated and are being handled by more seasoned professionals it does not create such a burden on the rest of the organization.

3. Sequencing into another marketing segment for certain steps so that the others that are managing the process can return the prospect to FIFO when completed.

4. Use it for resource leveling so that customers are never waiting on you. If other steps in the marketing process are backed up (a constraint) use the FIFO Team to manually relieve the bottleneck. (You may even discover new marketing opportunities this way.)

I think the FIFO lane can create novel solutions for your prospect/customers and maximize the use of your personnel. A seldom used Lean tool that could be a critical component in your marketing management process.

Technorati : Lean, Marketing Funnel, Marketing Hourglass, Sales Pipeline, Value Stream Mapping. FIFO

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The entire series will be posted during this week.

Related Information:

The Pillar Worksheet

Lean Marketing House Overview – Video

Related E-books

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The entire series will be posted during this week.

Related Information:

The Pillar Worksheet

Lean Marketing House Overview – Video

Related E-books

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Speed is much, much more than the ability to run your customer through your marketing cycle. it is an integral part of building a marketing system that responds to customers needs. Having built in trigger points to help you identify your customers readiness to proceed to the next stage in your Marketing Hourglass is imperative. I discussed handing the baton off in an earlier post and how many times that gets dropped from one stage to the next. It is similar to an athlete starting the season off and building his “speed” back up. Or a student taking the same test after summer break and scoring lower. These things happen because of the lack of activity during the non -value added time that you have identified in your Value Stream Mapping Process. The lack of speed in your marketing process equates to the lack of engagement that you have with your customer. This can be one of the most effective uses of social media and a good content marketing strategy. The engagement of your customer is driven by the needs they identify with your product. Here are some examples of items that may help in decreasing that non-value added time.

1. Attempting to late or to early to move a customer to the next stage.

2. Not building upon the previous stage by starting with different content. You effectively lose the momentum that was built by the earlier stage.

3. Reinforce the previous stage. Creating the linkages between stages is extremely important. It is a great time for a warm-up.

4. Make sure the customer is on the right airplane. You have been there, even if it is embarrassing when the stewardess says this plane is headed to Detroit, and you are not going there: you are getting off. If a customer is not ready for this stage give him a graceful exit and provide them an opportunity to get off, or you may lose him forever.

5. Make a better offer. Each stage should create a better offer than the previous. You have a more qualified customer at this stage so treat them that way.

6. Create interactive platforms or trials that the customer can use or interact with to solve some of their problems. This happens quite frequently in the construction business when someone leases a bulldozer to a contractor or online with free down-loadable software.

7. A superior call to action, an offer that cannot be refused to go the next stage.

Even with these improvements, without a marketing system in place to monitor results and improve upon them, you will fall behind. Speed is not automation. Automation can be a component of developing speed but don’t mistake the use of automation. People even in the online society we have created still want conversation and personal connection surrounding the product. Especially, in a regards to a  service they may purchase. They want a live body behind the curtain or in our case the Marketing Hourglass.

P.S. People mistake Lean for being just about waste. It is more about speed.

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Have you listed all your delivery processes? What did you learn?

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Before I go into the explanation, the question should probably be: Who Cares? Throughput or decreasing your Marketing Cycle time can have very beneficial results. If you put customers through the cycle quicker it will more than likely increase revenue. If it takes 1 person 60 days in a normal cycle time, and you reduce it to 30, you should be able to double sales for any given period. It may also reduce expenses as there would be less people in the cycle at any given period. So increasing throughput can be accepted as a good thing.

If you look at the chart below, you will see the cycle time depicted in a value stream map. The blocks represent our value added marketing efforts. The empty spaces the non-value added time or waste. I am not going to be so naive and say that you can remove all the non-value added time and close a sale in 3 days. The point that I am delivering is that: you must learn how to mange the non-value time more effectively. Most companies deliver good presentations, advertise and get good PR. Where they fall short is handing the baton from one stage to the next. Non-activity turns marketing rotten. Even with good (refrigeration) techniques our leads may go stone cold.

Taking a look at the chart, the first thing you may notice is the time span differs for certain parts of the process. If you can make an effort to understand the customer’s process during this time, significant gains may be made. Your actual processing time is insignificant in most marketing. It is the lead time between the processes that are important. Consider, for example, if we would increase the offer to move someone from the Trust stage to the Trial Stage. Reducing the time from5 days to 2 days or not at all. Or maybe, you have noticed that quicker conversions happen when they attend a webinar. What would happen if we paid them to come to the Webinar? You may find out segmenting your process halfway through the cycle would allow customers to better understand the results that they may gain from your product. Many of your features and benefits may be confusing to certain prospects that are not utilizing those particular features anyway.

Speed is important in the buying process. Your total cycle time can be improved. However, it seldom can be done without more feedback loops in your system.  Develop process blitzes to reduce these non-value times. Go to Gemba or the customer’s place of work and find out what happens during this time. See what is stopping them from moving forward. It may be an internal constraint within their company. However, the constraint may be yours. You may find your responses lack clarity. You may not be responding to the customers latest needs. Your ability to focus your resources on the customer needs may provide the overall clarity he needs this to make a more rapid decision.

One method is to create a vision of shorter cycle time, greater segmentation of your customers. It will enable you to do fewer actions in the cycle and much quicker. “It not the big that ate the small. It’s the fast that eat the slow” – Jason Jennings. Cycle times need to be addresses and improved. What methods are you using to accomplish this?

Related Blog Post:

Improve throughput, cut your customers in half!

Using the Theory of Constraints to improve your Marketing Hourglass

The Eagles always understood!

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Of course when I start discussing flow, I am going to start discussing Theory of Constraints. In your marketing process, you will have numerous constraints but Goldratt claims that at any given time, there is only one constraint. That constraint is much like the neck of an hourglass and will limit the entire system. Actually, if it is well managed you could throttle your process accordingly (We only wish we could that). Simply doubling the efforts in a constraint could be the easy solution and may just move the constraint to another area. However, we operate in a more complicated world than that. Something else usually cases something else to happen.

What is that something else? It is the marketplace. What we see in our constraints may not be problems but indicators. If we treat the perceived problem without really determining the root cause we just may go in a merry-go-round. It would be like just adding sales people. You could double your sales capacity and that may or may not increase sales. In fact, what typically happens is additional responsibilities are given to salespeople and you off-load other stages of your Marketing Hourglass to them without increasing sales. You did not find your root cause. The good or bad part is that your indicator will return because the constraint really never went away.

David Armano just wrote a blog post on Dynamic Signals for Business and how rapidly dynamic signals are transmitted and received. He discusses how Google has organized the Web by figuring out who has authority, but now the real-time Web behaves differently. It is about trending topics, and SEARCH JUST CAN’T REACT QUICK ENOUGH. He goes on and discusses how he receives trending information, and what they mean to him.

So marketing today has to address value and the content they are distributing. However, as importantly, they have to address the time or the stream of their marketing system. The acceleration or throughput is extremely important. Creating systems within our process that are efficient and propels customers through the Marketing Hourglass or Sales Cycle is imperative. Our days of leaving non-responsive customers on our mailing list, online or offline are ending. Creating advertising to the masses and expecting a reasonable return have already ended for small and maybe even medium size businesses. These statements are not meant to say that we only market to someone for 90 or 120 days and that’s it. It is more inline that we have to create interactive platforms that allow our customers to interact at their leisure, their timing and at their discretion. A good description of pull marketing, but how do you manage a stream?

You must understand your Marketing Stream well enough to have a throttle. You must know where your constraint is, maybe even on a seasonal basis. You must address indicators that are built into your process and not built into month-end reports. I look at my Google analytics daily. If I see web traffic dropping from referral sites, I realize that I am spending too much time pushing my message versus participating with others.

What are the real-time indicators within your business? Do you have a monitoring system that lets you know? Do you adjust your marketing message accordingly? Are you improving your stream with better information to qualify yourself to the customer? If you are proving a higher value of information to the customer, does that propel them through your marketing hourglass?

If you believe that your referral process is a sub-standard or your constraint, it may be a way to create an immediate impact in your process. Applying a couple of these principles to the bottom of the Duct Tape Marketing Hourglass in the refer stage. If you worked in this area alone and increased testimonials and referrals, what would it do for you? Could you reduce the time spent in your hourglass? Do you give every customer the opportunity to refer and to provide testimonials? Try a few of ideas and see if you can get a handle on your throttle.

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A typical e-mail campaign will be released and I will get the standard statistics of deliverability that include bounces, opens, opt-outs, complaints, etc. I will see what links are clicked but to my knowledge only Constant Contact lets me see who clicked what link. I am allowed to segment the list with a few of the vendors but it is a tedious process.

If you review the material they publish, you will see creative ways of obtaining opt-ins, improve deliverability and how to effectively keep a list alive. But why can’t I see the data? Why can’t I see who clicks on what? Why can’t I see aging accounts? Why can’t I just drag and drop contacts into groups?

Would it not make sense for me to manage my e-zine based on what part of the funnel the customer is in? Would it not be important to see if open rates were decreasing by the amount of time the customer is in the hourglass? Or the amount of time they are stuck in one stage? If they attend a webinar or go to a seminar, you would move them down the hourglass. If they are repeat customers or referral customers, they receive different frequency and maybe different e-mails.

If I wanted to improve my e-mail marketing should these statistics be available? The ability to move individual and groups into different parts of the hourglass should be a no brainer? Is there any system that will allow me to do this?

I believe that if we want to reduce spam in our life, we need to create better e-mail management systems. I know all this may not be able to be automated but would this not be better use of the Email vendors time rather more templates, videos, surveys and just more products! I might be sticking my foot in my mouth, but can anyone do this?

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As I mentioned previously, all customers behave and act differently. The personal contact that they receive from your organization should certainly attempt and make them feel that way. However, at some point and time you do have to segment and organize them. I use the Duct Tape Marketing Hourglass as my guideline in determining that structure. You can read more about that in my Ebook on the Pillars of the Lean Marketing House. In developing your marketing or sales channels, you must also determine if you can satisfy the segments that your organization wants to compete in.

Think about what is important for customer satisfaction. Is it, on time delivery, production cycle time, conformance, warranty clams, etc. Many segments require more hand holding before, during and after the sale. Others may require a little more customization. These metrics are extremely important when you are considering marketing to them. You want to align their expectations accordingly to what you can deliver. Be careful, many times to get the order in these segments you may promise more than you can deliver, never a good scenario for either party.

How much does it cost to market to this particular segment? Will you have to advertise through certain media, attend certain trade shows, additional fewer sales or technical support expenditures? And of course, how price sensitive is this segment? You may find certain segments prefer to buy online, through distribution or even direct. These sales cannot and should not contradict each other but be part of an overall marketing strategy. Without, price confusion, dealer erosion and mixed messages will send alarms to a customer that will certainly if not make it impossible, much more difficult in the sales process. You may be better off excluding a certain market segment.

Channel Management is one of the areas that I find as one of the most mismanaged areas in the marketing process. The particular way you go to market can vary the volume and timing of purchases. It even can effect after sales service and maybe an ingredient that is sometimes forgotten, customer loyalty. Many times you will find that the loyalty is stronger with your distribution source than your product. On another hand, an online purchase will seldom develop deep customer loyalties. There is nothing right or wrong about any situation just be sure you recognize the situation for what it is.

Can each of these segments have a different price for the same product or service? Unless you package the product differently it is very difficult to do that. Also, you have to make sure your distribution structure is compensated adequately. Failure to do so will cause that source to be always on the outlook for another alternative. They may build a need for your product within their clientele and then supply a competitor’s product through no fault of their own. Pricing issues must be dealt with before you enter each different segment of the marketplace. Many times by adding services or financing in these segments, you can provide revenue to offset the additional expenses. Don’t forget to ask you distribution source for ideas. They may have current financial packages that they would gladly utilize already in place.

Not every segment can be profitable to you. Not every segment is worth the risk. You must remember what allows you to make margin and not try to be someone that you are not. You may want to look at it this way, Who want’s you?

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Technorati : Channel Management, Marketing Hourglass, Marketing Segments, Pillars, Sales Channels

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Using the Theory of Constraints to improve your Marketing Hourglass –

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The best marketing in the worlds has failed, now what?

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Technorati : Duct-Tape-Marketing, Lean, Marketing-Hourglass, Six-Sigma, Theory of Constraints

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John says, “The top half indeed resembles the funnel concept, but the expanding bottom half, to my way of thinking, adds the necessary focus on the total customer experience that ultimately leads to referrals and marketing momentum.”

As I was reading The Duct Tape Marketing Blog, I remembered another blog post John had recently written, Is selling Becoming More Like Marketing? Maybe, it should be turned around in that is Marketing becoming more like Selling? Marketing has always been judged on how many leads we dump into the top of the funnel. The salespeople take over and develop the relationships, build the credibility and make the presentations. After the sale, they maintained the relationships. The Eagles(good salespeople) understood the bottom of the hourglass better than any other person in the organization. I am saying practically the same thing John did in his blog, but that really is the secret sauce that can make your organization successful today.

The important part of sales and marketing is the work that takes place in both halves of the Hourglass. That is where the ball usually gets dropped and a prime example is the refusal of many industries to participate in the new wave of marketing. It is just too expensive to nurture, develop repeat and referral business all in person. Don’t get me wrong, you still need that human touch, but you have limited resources and limited Eagles to go around. Developing effective and efficient communication in these parts of the hourglass is one of the most important things you can do to increase sales.

What does hold you back? Looking for that one thing or constraint that is holding you back is seldom found in the middle of your hourglass, the close. It occurs elsewhere and not having a structure in place to walk people through the 7 stages is imperative. That is why I encourage people to use the Lean tool of Value Stream Mapping and map these seven stages and put some measurements to them. Why? The obvious is that “people perform based on how they are measured” -Eliyahu Goldratt, Theory of Constraints. However, a word of caution as Marketing becomes more like selling, it still is people thing.

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Mirror Marketing

Technorati : , Duct-Tape-Marketing, Marketing-Hourglass, TOC, Theory of Constraints

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