Six Sigma Marketing Institute releases Customer Id Program

Customer Identification Program has been released by Six Sigma Marketing Institute and can be found at http://DrivingMarketShare.com. Customer Identification is the first step in the 5 Cs of Driving Market Share and identifies specific product/markets that offer an organization its best options for growth. The program enables an organization to evaluate product/markets using metrics such as current market share, market growth rate and competitive intensity to assess the best targets for the organization.

Listen to the audio description of the 5 Cs of Driving Market Share.

Customer Identification is just one module of the soon to be released 5 Cs of Driving Market Share Program. The Five Cs will give you excellent background knowledge on how to build an effective and efficient marketing data set based on customer value. Customer Value is the only true measure for Driving Market Share. This program is based on five components:

1. Customer Identification
2. Customer Value
3. Customer Acquisition
4. Customer Retention
5. Customer Monitoring

Though the best value is achieved in utilizing all five components, the programs are designed so that each module is completely self-supporting.

Six Sigma Marketing is a fact-based, disciplined approach for growing market share in targeted product/markets by providing superior value. The Six Sigma Marketing Institute is dedicated to the advancement and deployment of Six Sigma Marketing. At the heart of SSM is a modified DMAIC process that provides the architecture for growing top line revenues and market share.

Dr. Eric Reidenbach is the Director of the Six Sigma Marketing Institute, the leading organizations and authority of Six Sigma Marketing. Dr. Reidenbach has developed a number of unique approaches for measuring and managing value, the best leading indicator of market share growth. His consulting services are absolutely unique. They are filled with proprietary measurement and management techniques designed to help you grow market share and top line revenues. Dr. Reidenbach is the author of over 20 books on marketing and market research.

Disclaimer: This is a shameless plug, as I was part of the development of this program..

Related Information:
Best in Market eBook
Six Sigma Marketing Institute
5 Cs of Driving Market Share

Theory of Constraints Supply Chain Thinking

This a transcription of the Business901 podcast that featured  Amir Schragenheim, President of Inherent Simplicity, a software firm specializing in TOC software for Production & Distribution environments. Inherent Simplicity is the exclusive software supplier for Production & Distribution software to Goldratt Consulting, Eli Goldratt’s consulting firm, in their Viable Vision strategic projects.

Implementing the TOC Supply Chain Solution

Related Podcast:: Implementing the TOC Supply Chain Solution

Amir’s Website: Inherent Simplicity

Related TOC Books:
Isn’t It Obvious?
Theory of Constraints Handbook

Business901 Related Information:
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Transforming your Supply Chain to a Lean Fulfillment Stream eBook
Lean Six Sigma applied to Supply Chain
Application of Lean Six Sigma to the Supply Chain
Applying Value Stream Concepts
Learning to talk their talk helps you walk your walk!

Reduce your Work in Process

Many people believe that to apply Value Stream Marketing using Lean Techniques 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.

Reduce your Work in Process (WIP)

After you have determined the steps of your marketing cycle this becomes your Value Stream. Typically, you will have more than one. At this time is when a Marketing Kanban comes into use to visualize the flow and the WIP. Create a Kanban for each Value Stream that you can reasonably map.  Visualizing the process step by step will improve the overall system performance. I like the visualization trick of thinking about lowering the water in the river. When you do, the rocks will appear and it will be easier to navigate around them. The larger rocks may be prospects that you have not adequately defined a solution or your product is not a perfect fit. Other rocks or channels may have to many hidden cost or layers of distribution. There can be numerous areas of concern but mapping them brings the rocks to the surface so that they are noticed. By the way, you may have a couple of channels that have no rocks appearing at all.

Don’t be worried about producing too many Value Streams, we can combine a few later or decide not to manage certain ones. The different channels create a lower level of flow (wider river) and more rocks to appear. It also identifies and reduces variation which just about always is the reason people believe it will not work. This is similar to the concern many manufacturing companies have about reducing batch sizes to gain continuous flow. Defining the exact Value Stream will be the single most important factor in increasing flow and reducing your WIP.

Reducing your Work in Process requires that it becomes a physical process. You must put real numbers and real events on your Kanban Board. The measurements that you determined in Protect Sales become real. Your direct mail pieces may be only bringing a 3% response. Your Auto-responders converting only 10% of your prospects into attending a webinar or downloading an eBook. As you visualize the process try to get a feel for the pace and look for missing areas. A Value Stream Mapping trick is to chunk certain areas of the Value Stream grouping them. This will help you assign responsibilities and find missing or extra steps in the process. This is also a great time to remove a little of the low-hanging fruit. However, this is not the time for wholesale changes this is a time for you start gaining knowledge that you did not have before.

This is actually your first step in developing a pull system. You will start seeing overproduction or bottlenecks and on the flip side you will see where you may be starving a resource. This is the time that you will get a feeling of what leveling and pace is all about. Many times you can identify these areas of concern and limit or re-channel incoming prospects into underutilized resources. Further defining your steps and more specifically creating a Kanban board will help you see that next step. That physical point of a handoff or a transaction to that next step is very important. With hardly any effort at all you begin creating a pull system and leveling the demand.

This Part 2 of the 4-part Series: Part one - Good Marketing should minimize your Pipeline

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Using Six Sigma Marketing

I have been discussing Six Sigma Marketing with Eric Reidenbach of the Six Sigma Marketing Institute and find his approach to the combination of Six Sigma and Marketing quite impressive. He differs from the traditional approach of most organizations when applying Six Sigma to Marketing activities. That approach typically deals with highly structured people and processes entering a world of  highly creative and intuitive people. Eric instead blends a world of data driven and fact-based approach to growing market share by providing targeted product/markets with superior value. It combines the discipline approach of Six Sigma for more efficient use of the abundance of marketing data. This allows marketing to be more effective and provide the data to demonstrate it. The elements of  of Six Sigma Marketing(SSM):

• Customer value is the driving metric
• SSM has a unique set of value tools
• SSM uses a modified DMAIC approach
• Focuses on more efficient and effective marketing results – achieving sales goals at lowest cost
• Important goal is defect reduction – reducing lost customers
• Expands traditional view of marketing to 5Ps, adding processes to the marketing mix

The Six Sigma Marketing Institute uses a modified DMAIC Approach that I outline below:

Define: Identify and prioritize specific product/markets

• Principal tools are the Market Opportunity Analysis which identifies key markets based upon attractiveness of market and ability to compete within that market and the Product/Market Matrix which identifies and prioritizes product/markets based upon greatest economic and strategic returns
  Measure: For each Product Market define value

• Principal tool is the Competitive Value Model which identifies the CTQs and the price/quality tradeoff. It is a market based model that captures the VOM (Voice of the Market). It is the information platform for Six Sigma Marketing.

Analyze: Understand the organization’s value proposition

• Principal tools are the Competitive Value Matrix which identifies the organization’s competitive value proposition relative to their competition (The focus is on value gaps) and the Customer Loyalty Matrix which identifies the loyalty of the organization’s customer base and the bases of that loyalty.
  Improve: Focus on People, Product and Process Issues

• Principal tools are the Cause & Effect Matrix which links specific CTQs to processes and identifies improvement opportunities driven by the voice of the market. (The purpose is to close or open value gaps) and Value Stream Mapping which maps value streams and processes as they exist. The C&E Matrix links to the map to identify where and how to change the existing situation.
  Control: Monitor changes in Value proposition and customer events:

• Principal tools are the Value performance monitoring which monitors the competitive value proposition of the organization on a periodic basis and the Customer event monitor which  monitors quality of specific customer interactions with the organization on an ongoing basis. Identifies defects and the means to improve and change them.

  Eric has taken this a step further in a soon to be released program called the 5 C’s of Driving Market Share that is well suited to both Six Sigma Black Belts and Chief Marketing Officers. His recent eBook Best in Market can also be found on my website which will further outlined this approach to marketing. You can find Eric at www.6sigmarketing.com.

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  Value Stream Marketing eBook Released

The Guiding Principles of Value Stream Marketing

On my podcast the other week, I had Robert Martichenko of LeanCor co-author of the Lean Enterprise Institute’s newest lean workbook, Building a Lean Fulfillment Stream. The book builds on the concepts of waste, flow, and pull. This workbook illustrates how to analyze the traditional supply chain as a flowing stream of products and information. Building a Lean Fulfillment Stream provides the steps to a comprehensive, real-life implementation process for optimizing your entire fulfillment stream from raw materials to customers.

In the podcast Robert states that a set of guiding principles must be adhered to or simple chaos may result. Following his lead and using the Lean Fulfillment Guiding Principles for an outline, I developed a set of guiding principles for the Value Stream Marketing. An explanation follows:  

Most companies have a process that moves prospects and customers through a progression such as a marketing funnel or a sales pipeline. This enables an organization to visual the process and give them an idea of how many sales are close to closing or how many people are entering the funnel or even how many are maybe A, B or C players.

The movement is rather complex and could cross many different marketing channels. At the end of the progression, a certain number of prospects become customers and the others are kept in our pipeline till they remove themselves. We even will attempt to enlist referrals, especially from our customers to put more people into the pipeline. This accumulation of prospects makes it difficult for business to understand the progression of their prospects and maybe even their marketing efforts.

Organizations must come to understand that they are building a value stream. Effective management of the pipeline is one of the most critical components in marketing today. Finding the obstacles that hinder flow creates one of the most cost-effective ways of increasing sales. A Marketing Value Stream can be very long and continuously changing. It is almost impossible for managers to evaluate every action taken with detailed analysis. Instead you must create a set of guiding principles that you take for fact and adhere to them. A set of guiding principles for Value Stream Marketing are:

1. Eliminate all the waste in the value stream: Creating flow in the value stream requires all departments and functions in an organization to work in harmony. Focus on the fundamental lean principle of eliminating waste.

2. Make marketing efforts visible to all members of the value stream through a Marketing Kanban: If marketing efforts are visible across the stream, then it is much easier for every participant to plan work.

3. Increase throughput: When a company can increase throughput to the point where it can exceed expectations of the customer, your marketing cycle times are reduced when work in process (number of prospects) in the cycle is reduced.

4. Establish a Marketing Cadence and create level flow: The ultimate goal is to have information move in a predictable, consistent, and uninterrupted manner based on the actual demand of the prospect or customer. This is known as level flow. Level flow reduces variation in processes and tries to spread activities equally over working time. This minimizes the peaks and valleys in movement that create unevenness and overburden, which result in waste.

5. Use pull systems: Pull Marketing systems are a way of introducing the value(achieve) that a prospect /customer would recognize by your involvement(access) within their communities(attract). These 3 levels of engagement evolved to a simple term of Pull Marketing. These three levels of Pull have been wonderfully described in the recent book, The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion. The authors defined these terms as Access, Attract and Achieve.

6. Increase velocity and reduce variation: Velocity is the speed with which information and material move through the value stream. Meeting customer/prospect demand by delivering marketing efforts more frequently increases velocity. This helps to reduce work in process and lead times, which allows you to more easily adjust delivery to meet actual customer requirements.

7. Collaborate and use process discipline: The collaboration of all participants in a value stream is necessary to identify problems in the stream, determine root causes, and develop appropriate countermeasures. To be truly effective, this collaboration must be combined with standard improvement processes and regular PDCA.

What principles do you have in creating a Value Stream in your marketing?

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Pull: The Pull in Lean Marketing
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Theory of Constraint from The Goal to Now eBook

Theory of Constraints Handbook authors John G. Schleier, Jr. and James F. Cox III were part of my recent podcasts  Holistic approach to the Theory of Constraints. and the TOC Thinking Process Discussion. We covered so much material during the interview that I split the discussion to 2 parts. This an eBook that covers both podcasts.

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