IF YOU WANT TO BE ONLINE, YOU NEED TO LEARN ONLINE

IF YOU WANT TO BE ONLINE,

YOU NEED TO LEARN ONLINE

Social media is all the rage and it’s here to stay. Maybe you’ve heard about it; maybe you’ve embraced it. Ultimately, it’s important that you understand how to use and integrate social media. Need help sorting it all out? This innovative coaching program uses coaching, strategy, feedback and accountability functions aligned with a full set of online tutorials and training to deliver the practical, tactical know how so important to the success of the small business.

 

If you want Social Media to WORK

YOU have to participate

You have to learn HOW

Find out how you can become proficient

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Technorati Tags: FaceBook,LinkedIn,Social Media,Twitter,Web 2.0

Greater Marketing segmentation = Increase Revenue

Today’s products and services reflect greater marketing segmentation. As you know, I use the Duct Tape Marketing Hourglass as The Pillar of the Lean Marketing House but there is no universal terminology, it is just convenient to stay with one message because even as you segment your list you still have to recognize the marketing process into stages such as Know, Like, Trust, Trial and Buy.

As you segment, each segment will include fewer customers. However, it should enable you to identify the individual stages more effectively or determine your material and information flow needed in each step. It will also allow you to define waste and create better value for your customer. In fact, this is basically the definition of Value Stream Mapping.

As a result of this exercise, you will change the shape of your Pillar. You should be able to shorten your cycle in some and as a result decrease your expenditure in the marketing process. Others, on the other hand, may be lengthened and a total different approach may have to be utilized. A good example of this may be in the pursuit of a governmental contract. The point to be taken is that there is nothing wrong with either situation, what is wrong is treating each segment the same.

The key ingredient to get started is developing the NEED statement for each marketing segment or Pillar. The statement should clearly define your CUSTOMER’S CORE PROBLEM and your ability to solve that problem. Defining this alone will provide clarity throughout the various stages in your marketing process. The NEED statement is a living document that will evolve as your product/service and the customer’s use of it changes. Further development of this statement should include limits on cost and time to keep your Pillar within boundaries that you are able to manage.

The point of defining the Need Statement is to succeed at developing a manageable process. We want the resulting marketing phases (Know, Like, Trust..etc.) to meet our customer’s needs, at the right time and at the right cost. It must do this in a way that maximizes our investment in the process. Marketing can be a complex and often risky process and in today’s world it mandates speedy development. The Lean Marketing process is geared to provide a framework and specific tools for efficiently and predictably reaching goals.

Related Posts:

Following the Customer’s Need in your Value Stream Map

 The Pillars of the Lean Marketing House

Value Stream Mapping for Marketing

Get Rid of Your Marketing Vision Statement and Address the NEED!

Why do The Pillars of the Lean Marketing House™ crumble?

Applying the Marketing Hourglass: The Pillars of the Lean Marketing House

Technorati Tags: Lean Marketing,Duct Tape Marketing,Lean Marketing House,Pillars

Even Strong Pillars can crumble?

Most organizations build their pillars at the strategic business unit level, in the marketing departments within the business. However, they must include and receive buy in from customers, sales and other parts of the value chain to make it work. If it is pushed down it will seem like just another program.

Once we have designed The Pillars of the Lean Marketing House™, we need to implement it throughout the entire organization. This requires careful planning and coordination with all parts of the organization. It is beyond the scope of this post to go into an entire Product Launch but we basically should know, how to organize, coordinate efforts and establish deliverables within the organization. Also, we should have knowledge of the time, availability of data and the resources needed. Another important aspect is the degree of support and funding both in time and money that management is willing to commit too.

When completed, The Pillars provide clarity, the budgetary requirements and a platform for management to buy into and support. However, it lacks the foundation needed for implementation and measurement that is required for successful deployment. We will need to integrate the Hourglass into lower level blocks or the Foundation of the Lean Marketing House™. The blocks provide the stability to the The Pillars of the Lean Marketing House™. They are made up of the tactics we will employ to move prospects from one stage to another. As we move the forward, a more formal collection and reporting system will emerge. Once we get more and more blocks working, we will begin to link the different segmented pillars together.

Building The Pillars of the Lean Marketing House™. often require continuous testing and modification to see if the process is working. This can be frustrating for many who routinely expect perfect solutions. Many times you are testing something that you never had applied or had measurements before. You will revisit your pillars, adjusting and re-aligning it to fit with the organization. It is not unusual to postpone the rollout of pillars until the first pillar is well established and working. The foundation of the Lean Marketing House™ will be explained in upcoming posts.

Related Information:

Lean Marketing House - Foundation

The Pillars of the Lean Marketing House Webinar

Duct Tape Marketing

Technorati Tags: Duct Tape Marketing,The Pillars,Lean Markeitng House,Lean,Marketing

Marketing Idea of the Week!

I was reading Success Coaching U Blog and Joe wrote an article about Ready, Aim, Fire. Good headline, you already can guess what the headline is about, Target Marketing. I remembered a piece of advice I received from another Duct Tape Marketing Coach on targeting your direct mail, which I call the Machine Gun approach. For obvious reasons, I won’t disclose the source, but the following statistics were shared:

I don't have a success story, I have a sobering story. Here it is:
   Number of pieces mailed: 10,000
   Response rate: 1%
   Number of inquiries: 96
   Number that you manage to reach by phone to qualify: 70
   Cost of qualifying by phone, per inquiry: $30
   Number who turn out to be qualified leads (20%): 14
   Total cost of qualifying ($30 X 70): $2,100
   Campaign cost of $10,000 + phone qualifying cost = $12,200

Total cost of $12,200 divided by 14 qualified leads = $871.42. In other words, you must spend $871.42 to get to each lead who needs your product or service, can afford it, has authority to buy, and is ready to buy now. Not so good for a small business....

I will call this method the Machine Gun Marketing. Another method of Machine Gun Marketing is the Marketing Idea of the Week.  You have an Ad Rep call on you and they have this special 3 for 2 deal. Plus they have this even that they will be attending and handing out another 1,000 pieces of whatever they are selling. Oh yeah, you will also be exclusive to your area of expertise and we will even create the ad. What a deal! But….you will have to do something by Thursday, this being Tuesday. Sounds like a great idea?

If it is not part of your overall marketing strategy, if it not targeted, and I mean really targeted, and you have extra cash in your marketing budget that you were just clueless on how to spend it and you have no collateral material supporting it and you cannot create the ad yourself(a two-step ad, by the way), and you already know how you are going to measure it and….. I have asked Ad reps, that I do not respond to this type of marketing, many have stopped calling. I wonder why…has their machine gun jammed or just ran out of bullets? 

 

Technorati Tags: Target Marketing,Ideal Client,Direct Mail,Advertising

Value Stream It’s just not about the Value

Applying Value in your Marketing process is not the only thing that is important. In today’s marketing managing the stream is becoming equally more important. I alluded to this concept when I discussed E-mail providers in a previous post. I concentrated on the value and the touch points within your Marketing Hourglass. Just as important though is the Stream or Flow of the process. Without managing this, you will end up creating a great deal of wasted effort in your marketing process.

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 here 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.  

P.S. I have a Lean your Marketing thru Referral Power Group starting soon!

Technorati Tags: Value Stream,Referral Flood,Duct Tape Marketing,Marketing Hourglass

Get Rid of Your Marketing Vision Statement and Address the NEED!

Most organizations try to develop a meaningful marketing vision statement designed to guide their action for today, tomorrow and in the future. The vision statement serves as a platform for all their marketing goals.  Armed with a vision, you establish your marketing goals, which are time-sensitive and detailed orientated. We send the goals through the SMART procedure to make sure that they are specific, measurable, achievable, realistic and time-specific. 

Duct Tape Marketing addresses the marketing vision in the book and further defines it in the Marketing Plan Pro software by using these three components:

· Goals: list the significant personal, business, strategic, and tactical goals of your marketing plan

· Marketing purpose: describe the greater purpose that the execution of your marketing plan and the growth of your business will fulfill.

· Marketing visual: write a paragraph describing a picture of this business as you would like a customer to experience it in a perfect world.

Back in April, I wrote a blog discussing the Marketing Vision, and as I implemented the Lean Marketing House, my thoughts about a vision statement started to evolve differently. I studied the Duct Tape Marketing Hourglass and used it as the Pillars in the Lean Marketing House. I segmented each Pillar based on the different customer channels that were required. However, I kept pondering because it still seemed to be missing a very important ingredient and even formulated the vision that each channel needed. The funny thing was that the answer was there all the time. It was obvious, very obvious.

The problem was that our vision statements are internally focused. Marketing is about the customer, it’s not about us. Your vision statement needs to be a definition of the NEED that you serve for the client. John Jantsch author of Duct Tape Marketing has always defined marketing as “Getting someone with a Need to know, like and trust you. That was further developed and expanded in the Marketing Hourglass to include the other steps of Try, Buy, Repeat and Refer. However, somewhere along the line the NEED disappeared.

The NEED is the vision and for each customer segment or Pillar if you are using the Lean Marketing House. Defying that need clearly takes quite a bit of effort, but I would certainly start by using  the Fishbone Diagram or the 5 Y’s to determine the actual need. It may even get a little more difficult in that and the use of Goldratt’s Logical Thinking Process could be used. However, the NEED must be defined and your ability to solve that NEED must become crystal clear in your Marketing NEED statement.

What NEED do you solve for the client? Put that at the head of the Fishbone and address the different causes. If your customer understands this message, and he should if you do it right(it is his NEED), your marketing may become extremely simplified. Even for the future, you will be thinking about how your customer’s NEED will be changing, and what they will NEED.

So would you rather go to market with a clear VISION or a clear NEED statement?  

Gathering Information For Your Plan

Affiliate Post By Palo Alto Software, Inc.

A common problem people encounter when writing their business plan is finding information about their business industry and competitive companies. Fortunately, in recent years the Internet has made information gathering simple and easy, but sometimes the best information is found much closer to home, with real people, in real time.

Always take a look at other businesses similar to your own, as a very good first step. If you're looking at starting a new business, you may well be starting one similar to one you already know. If you're doing a plan for an existing business, you are even more likely to know the business well. Even so, you can still learn a lot by looking at other similar businesses.

• Look at existing, similar businesses

  If you are planning a retail shoe store, for example, spend some time looking at existing retail shoe store businesses. Park across the street and count the customers that go into the store. Note how long they stay inside, and how many come out with boxes that look like purchased shoes. You can probably even count how many pairs of shoes each customer buys. Browse the store and look at prices. Look at several stores, including the discount shoe stores and department store shoe departments.

• Find a similar business in another place

  Find a similar business far enough away that you won't compete. For the shoe store example, you would identify shoe stores in similar towns in other states. Call the owner, explain your purpose truthfully, and ask about the business.

• Scan local newspapers for people selling a similar business.

  Contact the broker and ask for as much information as possible. If you are thinking of creating a shoe store and you find one for sale, you should consider yourself a prospective buyer. Maybe buying the existing store is the best thing. Even if you don't buy, the information you gain will be very valuable. Why is the owner selling? Is there something wrong with the business? You can probably get detailed financial information.

• Always shop the competition.

  If you're in the restaurant business, patronize your competition once a month, rotating through different restaurants. If you own a shoe store, shop your competition once a month, and visit different stores.

It takes a little hard work but by using the Internet and doing some research at local businesses, you should be able to gather all the information necessary for your business plan.

Technorati Tags: Marketing Plan Pro. Marketing,Finding information,Duct Tape Marketing

Have you taken the path of your customer?

One of my steps in working with a client is that I like to put together their Marketing calendar to understand what they have on the table, events, conferences, advertisement, flyers, etc. They usually have some type of marketing in place, and we are looking at improving the system not dismantling it. After the marketing calendar has been constructed, I start moving, sometimes  just the post-it-notes from a chronological order to a marketing flow stream based on the customers' viewpoint.  We could even call it an assessment, but in initially I am just on a fact finding mission, in Lean terms = Current State Map. The next step in the process is diagramming this current state map and in Duct Tape Marketing terms, their Marketing Hourglass.

However, this week the procedure took a strange turn. I completed the process but I happen to know one of the client’s customer very well. So, after constructing this hour glass with the new client, I was able to sit down with his customer and my friend and map the process from the customers' point of view. Voice of Customer seems to an over-used word in our Industry but this was one of my best experiences. We actually pulled the clients file from the customers file cabinet, reviewed the folders on his computer including e-mails and bookmarks. I then laid out all the marketing material that had accumulated, highlighted and even taking note of the bent corners in the catalog. This was all followed by an interview.

Of course, my sample size of 1 is not a good indicator. The key to this process was the awaking to the client and myself on what the customer valued and what his procedure was in making the decision. His process was simply different. We talk about going to Gemba and walking the walk from the customers' point of view, but do you? How much non-effective marketing could you save by doing this? How much effecting marketing could you implement?
 

Related Posts:

Is your Value Stream Mapping backwards?

Mirror Marketing E-Book

Another word for Marketing – How about Voice of the Customer?

Technorati Tags: Duct Tape Marketing,Marketing Calendar,Marketing Hourglass,Value stream Mapping

The Ultimate Marketing System – The Forgotten Pillar

Readers of my blog have read my explanations of the Lean Marketing House and how your Marketing Channels determines your number of pillars and the size of each. You can suffice with just one pillar if it is big enough and strong enough to hold up the roof but the other day I realized that I had forgotten to describe what I will now call the Forgotten Pillar. Continuous Learning in the Lean Marketing House means theUltimate Marketing System. This is a term coined by Duct Tape Marketing and actually includes their workbook and CD's explaining their system. Most marketing plans and systems fail if adequate training is not provided.

Lean Six Sigma Practitioners always realize that the training is what makes the processes work. Without, old habits stay the same and new habits are never developed. Nor are these new habits expanded to the greatest extent. It happens in marketing too. Marketing that works today is all about authenticity, customer touch points and the connection of those touch points. You have to be everywhere, but you also have to be you. Perfect marketing is less important because people really are seeking you. Even from an organization viewpoint, they are expecting a human and personal experience.

How do you go about creating this new wave of marketing in your organization? My advice is that you have to create a continuous learning cycle within your company. This is best done by starting out with a learning system, a structured program and a Marketing coach. This is self-serving to say the least, but it is what I truly believe.

I use the Duct Tape Marketing System as the learning system and the structured program to get someone started. I am not going to go through the entire program, you can do that here, but it will set you on the road to success and provide a foundation for you to build from. Without going through these necessary steps, you will never fully defined your marketing needs and just continue to respond to the marketing idea of the week. I cannot tell you how many phone calls I get weekly a call from an Ad Rep telling me about the next greatest deal. Please take note: It's not about the money, it's about the target!

Now, the coach is pretty important. I am not going to talk about that even Tiger Woods has a coach, you to keep you on track, hold you accountable and all that garbage. I am going to discuss about someone that has been there done that in the real world. I am also going to mention another cliché: Talk the talk and walk the walk. I can only talk for myself, but I will put myself up against any other coach in the sense that I walk my system. I believe in the Duct Tape Marketing philosophies. I practice them. If you think that is not true, just look at my Tag cloud on the left. Look at my Alexa score, Hubspot rating and Twitter feeds. They are better than the vast majority of corporations and certainly better than 99.5% of other coaches and consultants. Why is that? I simply follow the practices that John Jantsch of Duct Tape Marketing has taught me. Have I added a few tricks of my own? Certainly - Authenticity, Personalization, Differentiation and building your Core Message is what I have learned in my Continuous Learning cycle. What can you gain from that expereince? You will simply short-circuit your learning curve by having a coach on board!

Technorati Tags: Duct-Tape-Marketing,Lean,Lean-Marketing-House,Six-Sigma

Do you have Continuous Learning going on in your Marketing?

Elevating and Repairing Marketing Constraints

A continuation of my blog posts of Using the Theory of Constraints with your

Marketing HourGlass. We are concentrating optimizing the Throughput of the Marketing Hourglass utilizing the Five Steps of Continuous Improvement, Steps 4 and 5.

Step 4.  Elevate the system’s constraint.

You may have found significant improvement in the preceding steps and another constraint may have actually developed at this time. This is the step that we have to add capacity to the constraint. It may be additional events, sales people or increased advertising.

Reviewing the Marketing Hourglass you may have found significant shortcomings in one of the phases. You may have never instituted a formal referral program, for example. You may not have a presence in Social Media.

Jumping into this step early in the process is very common. The newest and/or the latest technology may seem an easy fix. Looking to vendors for your fix is an easy alternative, but you may not find the core problems associated with the constraint if you did. There is a reason this is the fourth step, and you should make every effort to improve the constraint through the fist three steps before adding equipment, software, increased advertising, etc.

This may also be the area that “Tribal Knowledge” may limit your thinking. We defend what we have always done. Look at new and different ways to accomplish the constraint.

Step 5. If a constraint is broken, go back to Step 1. However, don’t allow inertia to become a constraint.

You will always have a constraint. A fundamental concept of continuous improvement. As you correct one another will develop. As in Lean this is a fundamental concept of TOC.

Mot organizations have an unlimited number of things to improve. However, most of the time only a relative few will make a significant difference in your company’s bottom line. If you are going to improve something , IMPROVE IT.

Why waste everyone's time? Changing the process without the data is cause for failure. You have heard it time and time again, JUST DO IT! We have been trained that way, action is accomplishment. However, the wrong action may accomplish little or drive you deeper into a hole. Without the data from the previous steps, you will not be able to make as effective and dramatic improvements that you desire. Seek 200% process improvements and cost reductions of half!

One of the sayings I have read about in TOC time and time again. Don’t leave inertia become the constraint. Change should help your performance, not hinder it.

Related Posts:

Using the Theory of Constraints in Marketing

The Marketing Hourglass

Using your Marketing HourGlass to determine your Constraint

Identifying your Marketing Constraint

Exploiting and Subordinating your Marketing Constraint

Technorati Tags: Duct-Tape-Marketing,Lean,Marketing,TOC,Theory-of-Constraints

Public Relations Marketing

I have access to so many good articles as a result of my affiliate status and seldom use them as often as I should. So who better to start the series out with than with Palo Alto Software and Tim Berry.

Excerpt from On Target: The Book on Marketing Plans by Tim Berry and Doug Wilson

Public Relations involves a variety of programs designed to maintain or enhance a company's image and the products and services it offers. Successful implementation of an effective public relations strategy can be a critical component to a marketing plan.

A public relations (PR) strategy may play a key role in an organization's promotional strategy. A planned approach to leveraging public relations opportunities can be just as important as advertising and sales promotions. Public relations is one of the most effective methods to communicate and relate to the market. It is powerful and, once things are in motion, it is the most cost effective of all promotional activities. In some cases, it is free.

The success of well executed PR plans can be seen through several organizations that have made it a central focus of their promotional strategy. Paul Newman's Salad Dressing, The Body Shop, and Ben & Jerry's Ice Cream have positioned their organizations through effective PR strategies. Intel, Sprint and Microsoft have leveraged public relations to introduce and promote new products and services.

 

Similar to the foundational goals of marketing, effective public relations seeks to communicate information to:

• Launch new products and services.
• Reposition a product or service.
• Create or increase interest in a product, service, or brand.
• Influence specific target groups.
• Defend products or services that have suffered from negative press or perception.
• Enhance the firm's overall image.
• The result of an effective public relations strategy is to generate additional revenue through greater awareness and information for the products and services an organization offers.

Goals and Objectives

Good strategy begins with identifying your goals and stating your objectives. What are the goals and objectives behind your public relations strategy and can they be measured and quantified?

Each of these areas may reflect the goals your public relations campaign may seek to accomplish.

Press relations
Communicating news and information of interest about organizations in the most positive light.

Product and service promotion
Sponsoring various efforts to publicize specific products or services.

Firm communications
Promoting a better and more attractive understanding of the organization with internal and external communications.

Lobbying
Communicating with key individuals to positively influence legislation and regulation.

Internal feedback
Advising decision makers within the organization regarding the public's perception and advising actions to be taken to change negative opinions.

Source: Articles on bplans.com

Technorati Tags: Palo-Alto-Software,Tim Berry,PR,Public-Relations,Marketing

Making Segmentation work in your Marketing Hourglass

How do you look at your marketing?

Do you know where your leads come from?

How are you processing leads to make them successful?

In my recent blogs about marketing and the Theory of Constraints, I discussed the connections between each step of the marketing hourglass. Many organizations do not look at their sales and marketing process in a linear fashion, let alone segmenting it. When organizations first map out the process, they look at connections where people come from being all over the map such as the diagram to the right. They look at a simple chain as an oversimplification of reality. Not everybody goes through each step of the cycle. Some will skip from step one to step three. Someone may enter the cycle in step three. These interconnections are not trivial, it is what makes your process work and it also may be stopping it from working. So what is the purpose? The purpose of creating the marketing hourglass is very simple: Which is harder to manage the above diagram or this diagram?

Your flow system, The Marketing Hourglass, structure will allow an organization to operate at maximum efficiency. And the secret in creating such a linear flow fashion is segmentation. Without it, you will continue to operate in less than an optimum manner. You will never be able to find your constraint, because it will be moving around, practically every single opportunity.

Different opportunities, normal variation and changing workforce make it just about impossible to balance everything. There is a weakest link; there is one element in your system more limiting than another. Why is it so important to find that? Without working on your greatest constraint much of your work will be wasted and non-productive. Take a look at the diagram above and see how proper segmentation may alter your perception of the marketing hourglass. As you can see, not all steps may be needed for each and every channel. An excellent example is someone that has been referred to you. With the proper referral program in place, you will know exactly what step in the process that person should enter.

Keep segmenting your list, till you gain a linear flow. Yes, there may be a few exceptions. However, I think it might be interesting to scrutinize those exceptions. Are these exceptions really your target market or ideal client? I think you might find out that they are something less than ideal clients. Whatever you do, don't ignore the exceptions; they may prove valuable insights to your marketing process. That thought may lead to another discussion.

Related Posts:

Using the Theory of Constraints in Marketing

The Marketing Hourglass

Using your Marketing HourGlass to determine your Constraint

Identifying your Marketing Constraint

Exploiting and Subordinating your Marketing Constraint

Elavating and Repairing Marketing Constraints

Technorati Tags: Marketing HourGlass,TOC,Theory of Constraints,Goal,Sales-Channels,Duct Tape Marketing

Exploiting and Subordinating your Marketing Constraint

Step 2.  Exploit the system’s constraint

This simply means; Getting the most out of the weakest link or phase. This is a great time to use the Lean tool of Kaizen. Getting rid of all waste associated with the systems constraint is the first step I would take. One of the things that TOC and Lean both encourage is to observe the process with people very familiar with it. They may tell you that this always happens or maybe an obvious statements such as we don’t have enough people. Looking at the waste you will readily identify some crucial changes.

Put a cost to the constraint. If this is your weakest link, improvement in this area will maximize the entire process. Understanding the cost of the constraint is imperative in moving forward. Once you have a cost assigned to the constraint, you start looking at improvement slightly differently. Observe how things move through a constraint. Hiring that one extra person, holding additional events, dedicating a phone line or a live operator could make significant differences. Using an tip from Rapid Product Development, you may want to parallel this process. This allows simultaneous actions versus many of the different types of time constraints detailed in or list of definitions.

Technorati Tags: Duct-Tape-Marketing,Lean,Marketing,TOC,Theory-of-Constraints

Step 3.  Subordinate everything else to the above decision.

Increase output through the constraint(phase) increase output for the entire system. I sometime use the analogy when a salesman senses an order. He puts everything else on hold and dedicates all his resources to getting that order. It is also very similar to the Lean method of Kanban. Kanban is a method of only releasing parts as needed through the process. A card must be given to the preceding event before that phase can start.

Interesting thought may be as you manage marketing campaigns or events that you only release calls, direct mail based on responses from your prospects. A proactive drip management program may solicit certain key actions before additional material is released automatically.

In manufacturing, I have seen a quality station placed in front of the constraint before allowing parts to move through the process. In marketing, you may add a qualifying step so the constraint or process only receives a more qualified prospect.

As I mention in a previous post: Every System, typically has relatively few constraints. However, to operate at maximum efficiency, the limiting constraint must be identified. Five Steps of Continuous Improvement help identify and improve the constraint. How do I correlate the Marketing Hourglass with the Theory of Constraints? TOC uses the weakest link, a chain as a visual in working with throughput.

Below, I have outlined my basic understanding of the Theory of Constraints from my readings and experience. If you would like to dive deeper into this subject start with the AGI-Goldratt Institute website and there is whole slew of books, trained consultants(Jonas) available throughout the country. I believe the Theory of Constraints principles are a requisite for continuous improvement.

Before starting with the 5-steps, there are two prerequisites:

1.Identify the Goal of the System /Organization

2.Establish a way to measure the progress

The most common goal is to make money and that should be our overall purpose. It sometimes can be overlooked in increasing sales, client retention and many other factors. Many will argue but increase sales can hide many problems. The companies that fail the quickest in a recession are the ones that were living on growth without really generating income.

There are several ways to measure progress with the most common being Throughput, Operating Expenses and ROI. Going into too much detail about how to use the ratios is beyond the scope of this blog. The important thing to remember is that TOC methodology values Throughput and it as the best means to fuel growth. TOC then looks at Inventory(Prospects) second and operating expenses third. So our concentration will be optimizing the Throughput of the Marketing Hourglass utilizing the Five Steps of Continuous Improvement :

Step 1. Identify the system's constraint.

Step 2. Exploit the system's constraint.

Step 3. Subordinate everything else to the above decision.

Step 4. Elevate the system's constraint.

Step 5. If a constraint is broken (that is, relieved or improved), go back to Step 1. However, don't allow inertia to become a constraint.

Starting at the beginning:

Step 1. Identify the system's constraint.

The system's constraint is the phase or part of the phase that resource which limits the output of the entire system. Start following your actions and you may find out that your bottleneck is not just getting more prospects in the door. If you can monitor actual numbers, you may be amazed at what is happening to your prospects(inventory). This is where we need to identify the constraint , where is your constraint?

The easiest way in a manufacturing analysis is to walk around and see where the work is piled up. It is not that much different in a marketing process. Walk around and see if there is a pile of sale presentations waiting to go out. You may find people waiting on financing to be approved. Maybe, inconsistent delivery of Newsletters and so forth.

If you have done a good job of building your marketing hourglass, you may be surprised on how easy it is to find. You may be so lucky to be able to eliminate parts of a step, not the entire step. Start internally, as you gain internal control you will also gain the respect of your customers and vendors. This may help you significantly when you ask them to assist you in late improvement needs.

Our Next blog will continue with step 2 and 3.

Related Posts:

Related Blog Posts:

Using the Theory of Constraints in Marketing

The Marketing Hourglass

Using your Marketing HourGlass to determine your Constraint

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Another way of using the hourglass is to determine the number of prospects(inventory) that you need in each part of your hourglass. This is tremendous opportunity to really understand what is taking place in your process and will enable you to determine what is and what is not working. Where is your bottleneck or if you have ever read The Goal, where is your Herbie?

In your process do you understand your conversion rates? Are you converting 50% of your prospects from the Try phase to the Buy phase? You may not know each of these, but if you know several of them, you will have the ability to interpolate some of the others. The ability to create this chart will allow you to significantly increase your sales result. Have you ever considered where your constraints were in your marketing? Many people spend the majority of the time, money and even skill in developing new leads. They may be just piling prospects(inventory) in front of a constraint. Going through this exercise may significantly increase your awareness on what is your limiting factor.

An obvious example, is we alll know that a referral is our best form of creating business. Duct Tape Marketing emphasizes referrals and in fact, John Jantsch, author of DTM, next book is based on building a Referral Marketing System. I mention this, because, I believe your marketing is incomplete without a formal Referral Marketing system in place and by the way, I offer such a package. Seldom do I see the true cost of what it means to gain a referral. I think the chart below, demonstrates quite vividly what it means in the overall marketing flow. If you get a repeat buyer or a referral, you would drop them into one of the phases above. Notice, how it significantly it could change your marketing efforts. Consider the dollars and time you spend in the top of the hourglass. How productive would your efforts be in using the same amount of time and effort in the bottom of the hourglass?

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We realize that referral efforts are probably short changed in most marketing practices. But that may or may not be your limiting factor. Every System typically has relatively few constraints. However, to operate at maximum efficiency, the limiting constraint must be identified. The Five Steps of Continuous Improvement from the Theory of Constraints methodology help identify and improve the constraint. That is the next stage and next blog.

Related Blog Posts:

Using the Theory of Constraints in Marketing

The Marketing Hourglass

This is a simplified version of how a hourglass would look. As you can see the natural progression of the flow (know, like, trust… flow to the right), the enablers or information to move the process forward is provided above each step. Taking a group of current customers, you can identify this in your current process. If this seems difficult, make a certain group that you can segment and document the process. Many companies will find huge gaps in their processes which are supported by other departments such as sales or service or maybe by repetitive marketing.

A quick primer for anyone that has not followed my blog or listen to me talk about marketing for over five minutes is that I adhere to the Duct Tape Marketing definition of marketing: Getting someone, who has a need, to know, like and trust you. Now, when you have a marketing system in place this expands to – getting someone, who has a need, to know, like, trust, try, buy and refer you.

One purpose of the hourglass is to provide clarity to an individual or organizations marketing process. This gives you the ability to walk a prospect through the process, understanding where they are at in the process. Typically, I have a customer add the activities that he uses in each stage of the hourglass. Don’t look at this as just a simple exercise for a small organization. I use this in larger organizations by just repeating this process for each sales channel the may have. The secret to this is that you really forces you to layout your marketing process and is really the beginning of development of your marketing process.

When you create your hourglass the purpose is to achieve better cooperation of the multiple phases. Each interlinking phase depends upon the other links. In each of them you will have different capabilities, normal variation and a changing workload making it practically impossible to balance. Using the TOC(Theory of Constraints) we will find one phase of the hourglass more limited than another. Since we have determined that the whole hourglass is dependent upon the cooperation of all phase, the weakest link determines the strength of the chain.

Every System, typically has relatively few constraints. However to operate at maximum efficiency, the limiting constraint must be identified. Five Steps of Continuous Improvement help identify and improve the constraint.

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Lean Six Sigma and Duct Tape Marketing

I published this article practically a year ago in a series of blog posts. I thought with the recent increase in Lean Six Sigma Online Training and how you reduce waste in marketing that it was an opportune time to re-publish.


Lean Six Sigma and Duct Tape Marketing- Original Comparison -

Other Blog Posts on Lean Six Sigma

Brand Yourself before your Non-Customers do!

I was just reading an article written by John Jantsch that he posted on Could Your Brand Stand a Personality Upgrade? on the HP Small Business Marketing Guide. He discussed Small Business branding and encouraged you to work at it much harder by identifying it more clearly to your customer base.

Don’t be a big fat zero: It is pretty scary to brand yourself. You always feel like your limiting yourself and as a result try to be everything to everyone. And as a result, your are nothing to no-one. A ZERO! Another alternative is to to leave your customers do it. That perception, is of course probably the most correct one. I have recommended before, go call 10 of them and find out what your brand is. A word of caution is that it is very difficult to change this image and if you so choose to try, it is expensive. I have written several posts on this.

But don’t be less then zero: I think the scariest part is leaving the branding to your non-customers. Now, let me do the math. Your customers in your target market is called market share. Your market share, more than likely is something less than 50%. Maybe 5%, if you are extremely successful. So, if you have not developed a strong brand, if my math is right, 95% of your target market is defining it for you. So, go read John’s post, I think you need to take hold of it and brand yourself with everything you got before someone else does

Technorati Tags: SMBmarketing guide ,Duct Tape Marketing ,Branding ,Target Market

This is syndicated from Business901"

Strategic Partnering: Turning Suppliers Into Partners

Read the entire post at Duct Tape Marketing, she explains each step below in greater detail.

Strategic Partnering: Turning Suppliers Into Partners

This is a special guest post as part of Make A Referral Week 2009

By Anita Campbell of Small Business Trends

Like most sole proprietors and small business owners, I often felt I was going it alone. It was me against the whole world – until, that is, I learned the power of partnerships.

A properly chosen partnership can be THE defining moment in your company’s history. It can bring in customers at a rate you could barely dream of!

1)Get suppliers to carry credit/paper - Fast growth often brings a cash flow crunch to a small business.

2)Co-marketing / co-advertising – Another way to partner is to share marketing responsibilities and costs.

3)Training and systems for productivity

4)Trade off Web presence for inventory and fulfillment

5)Open up new markets – A well-structured partnership can open up new markets for a business.

Choose one of these paths and you may discover the partnership will become THE defining moment that puts your business on the map.

About the Author: Anita Campbell is Editor in Chief of Small Business Trends, an online community of small business people.

Line-up for Referral Week

A great line-up of guest blog posts and podcast education awaits you during Make a Referral Week - just look at this roster of experts!

Mon 09 Anita Campbell, founder of Small Business Trends on strategic partnering    Michael Port, author of Book Yourself Solid on face-to-face networking.

Tues 10 Scott Ginsberg, founder NametagTV on being more referable     Rich Sloan, author of Start up Nation on low-cost referral strategies.

Tuesday March 10, Noon CST - Special live web conference featuring Bob Burg, author of the Go-Giver, Ivan Misner, founder of BNI and Bill Cates, author of Get More Referrals Now.

Wed 11 Scott Allen, author of the Virtual Handshake on using social media for referrals.    Andy Sernovitz, author of Word of Mouth Marketing on small business word of mouth strategies

Thur 12 Ben McConnell, author of Church of the Customer on creating customer evangelists    Pam Slim, author of Escape from Cubicle Nation on Personal Branding

Fri 13 Guy Kawasaki, author of Reality Check on the art of the referral    Jill Konrath, author of Selling to Big Companies on customer referral strategies

Check out the Duct Tape Marketing Referral Flood System

Technorati Tags: Referral,Referral Week,Referral Flood,Referral Marketing,Duct Tape Marketing