Marketing Cycle

Value Stream MarketingDo you think it is Scrum? Do you think it is Kanban? Do you think it is a Marketing Funnel? …or is it all three? Or maybe Agile? This is an empirical view of Value Stream Marketing.

The drawing is reflective of a Scrum sprint. Scrum is an iterative, incremental framework for project management and agile software development. The sprint is typical a two to four week process with the large loop representing the overall process and the smaller (top) loop representing a twenty-four period and the daily scrum meeting. In the Value Stream Marketing Process, I use the loops to demonstrate a higher level of intimacy with a prospect. The top loop is for existing customers to nurture an even stronger relationship.

The three separate areas of the diagram will have their own Kanban board, if there are separate teams working on them, or you could visualize each as a separate swim lane. Separating these three processes apart allow you to better identify the process steps and the tools needed to facilitate the value stream flow. And, of course, using a Kanban board for this process will help you identify where the process is not working or where the bottleneck is occurring.

The Kanban board is where the actual work gets done. We want to limit unnecessary work in process to be no higher than it needs to be to match the control point or pacemaker of the process (bottleneck). We will use these boards to limit Work in Process into each stage and as a result create a smoother work flow(Heijunka) with a goal of eliminating what Lean refer to as the 3 M’s, Muda (Waste), Mura (Unevenness or Inconsistent) and Muri (unreasonable). This way we maximize your marketing efforts to the fullest extent.

Scratching your head a bit? We will develop our Kanban Boards in later posts which will clarify things a bit. Don’t get hung up on process. All you really need to do is break down your present marketing systems onto a Kanban board and start.

One of the first steps that I recommend in developing your Marketing Kanban is to create a Value Stream Map of your Sales or Marketing Cycle. Many people struggle with this concept and in a workshop I asked them to create their best known channel without really discussing their marketing tactics at all. I ask them just to define how many clients they need in this Value Stream to be successful. For illustration purposes I use a common internet model that is recognizable to most of us. A typical Value Stream may look something like this:

  • 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.

VSM Kanban

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.

I recently did a blog post, Turning your Marketing Cycle into a Kanban that created a basic Value Stream Map in a beginning Marketing Kanban discussion. I defined the Exit point of the Kanban as the purchase of the service or product. I purposely left out the Repeat and Referral Customers to simplify the explanation. Many people may not end their marketing strategies and tactics at this point but most do stop their budgeting at this point. Let me tell you why RE part of marketing deserves the money.

RE-peat customers: You spend less money finding them and marketing to them. You also know they already likely to buy your product and services and the chances are they will spend more money with you the next time.

RE-ferral Prospects: A typical referral customer is already somewhat qualified and usually enters your Value Stream further down the path than at the beginning. They also have a tendency to spend more money with you at the beginning since they have been referred.

RE-Ignite Customers/Prospects: These are former customers or maybe even qualified prospects that have been dormant for some time that you bring back to life. They may have decided it was not the time or found another solution but they still may be a viable candidate.

A bonus RE is Re-Purpose: When you create a marketing piece, a certain call to action, a new marketing tactic, etc. that works well. Re-use (not meant to be a play on words) it till you wear it out. Remember, the old saying that when a particular advertisement starts to seem old to you is when your prospects are just starting to see it. In your marketing you now have many different ways to reach a customer. So use the good material in as many different ways as possible: Blogs, Articles, PR, Videos, etc.

I have argued for a long time that people spend way too much money at the top or the beginning of their Marketing Funnel or Cycle. I created this short video to demonstrate the power of Repeat and Referral Customers.