The Starting Point for Lean Sales and Marketing

My best approach has been to simply start with developing a culture of PDCA and teamwork through a mini - Hoshin Kanri type plan or the use of the The 4 Disciplines of Execution. I have included a step by step guide called, My First PDCA Cycle. This guide can  be used by one leader with multiple teams, multiple leaders with their own teams, etc. Following 4DExectution strategies, you want this effort to encompass only around 10% of anyone’s time. The remaining 90% should be spent on doing what they normally do. However, people must be held accountable for this 10% and it cannot be only done when there is time. A recent blog post describes the methodology,  4 Disciplines of Execution – Lean Simplified 

I caution you not to jump into the fray with immediate thoughts of waste reduction, data collections efforts and rigid procedures such as scripts and standard work. You first must bridge the gap between operations (supply side thinking) to the sales and marketing side (demand side thinking). It is not the same.

Start with an isolated segment as a prototype. That segment can be a particular value stream, a geographic area or one specific goal (this may include to many people) that has been decided on from your annual Hoshin. The successful ingredient in this equation is that we address specifically one or two goals that can be addressed in the next 90 to 120 days. I recommend not addressing problems but rather aspirations; using the Appreciative Inquiry method of Discovery, Dream, Design and Destiny. When you are dealing with Sales and Marketing, it is important not to be problem solving initially and trying to achieve buy-in but rather taking a positive spin and looking at how to stretch goals and/or increase market share or revenue. This is the language of Sales and Marketing.

Are you ready  to get your Sales and Marketing team off and running?  

Related Information:
The Uniqueness of Hoshin Kanri
Mastering Positive Change eBook
Lean Marketers concentrate on SOAR vs. SWOT
When Standard Work and Customer Focus come together

Lean Sales and Marketing Summit is Quickly Approaching

In preparation for this Duane Butcher of the hosting organization, Lean Frontiers wrote this in a recent newsletter:

Marketing activities such as developing promotion programs, branding, developing ads and writing copy are seen as creative processes that don’t lend themselves to systematization without losing the ability to think outside the box.

Most efforts to improve Sales and Marketing so far have come from Six Sigma or Lean Office programs that largely derive their practices from the production environment. The personality style of a star salesperson or an innovative marketer clashes with the type of person who is going to embrace standardized processes and continuous, incremental improvement.

If these arguments sound familiar, they are the same ones used ten years ago to keep lean out of Research & Development: breakthrough innovation cannot be standardized, lean manufacturing practices don’t work and star technologists don’t appreciate process excellence. The solution is to recognize that like R & D, sales and marketing functions are knowledge creation processes.

Product developers add value when they deepen their knowledge about the product design and then convert that knowledge into a product that a customer can buy. Similarly, marketing and sales functions add value when they deepen the company’s knowledge about customers and market needs, and then support R & D as they make decisions that lead to products to meet those needs. They also add customer value when they deepen the customer’s knowledge about the product. In fact, the best sales people are those who take the time to deeply understand an individual customer’s needs so that they can recommend the products and services that will best meet those needs.

We will be able to conquer the final frontier for the lean enterprise when we recognize that when the value a process creates is knowledge, it must be managed as a Knowledge Creation Value Stream to maximize the value we get from the knowledge created, and minimize the wastes of knowledge loss, ineffective decision-making.

P.S. You want a fresh approach to marketing that is something other than just a new set of tools. Consider attending the Lean Sales and Marketing Summit. I have a limited amount of tickets left; please contact me to check availability.

The Lean Sales and Marketing Summit is quickly approaching. It is a two day workshop.

Bill Waddell. On April 17th, Bill will be presenting Aligning the Entire Organization to Achieve the Sales Strategy. He will show you how to devise a sales and marketing strategy built around creating the most value for your customers; how to set prices strategically, rather than on the basis of standard costs, assuring that prices will not cause you to lose a sale.

The next day, I will be presenting Using Lean to Create Repeatable and Scalable Sales and Marketing Systems: A Customer Centric Approach Through Lean. The workshop will be two-thirds presentation and one-third interactive exercises.

Please consider joining us.
Related Information:
Lean Sales & Marketing Summit Announced
The Other Half of the Lean and Sales Marketing Summit
Traditional vs. Emerging Thoughts on Pricing

Lean Sales and Marketing, the Value Stream Manager

Overview: The Value Stream Manager is responsible for maximizing return on investment (ROI) through his particular value stream of customer identification, customer value, customer acquisition, customer retention and customer monitoring (Value Stream Mapping Customer Value). He translates this value stream and assigns it in conjunction with the team coordinator to particular teams similar to how a typical sales manager would to his salespeople. The VSM and the team coordinator will routinely evaluate the outcomes to determine best fit. The VSM may work with multiple teams for his value stream. The VSM has profit and loss responsibility for the product/service. The VSM represents the Voice of the Market, which may be thousands of individual clients, distributors, brokers and agents. As with Scrum’s product owner, the VSM has the final authority.

Again building on familiar ground you may want to equate this position to the Product Owner in Scrum, the Champion in a Six Sigma Project, Product Manager in Marketing or the Value Stream Manager in Lean. The short summary of their responsibilities: They assume the business interest of the product, service or value stream. They are the product/service owners and are held accountable for the commercial success of the product/service.

In Lean Sales and Marketing, the Value Stream Manager is held accountable for their Value Stream that is described in the 5Cs of Driving Market Share; Customer Identification, Customer Value, Customer Acquisition, Customer Retention and Customer Monitoring. In addition, the VSM has profit and loss responsibility for the product. Different than a Product Owner in Scrum, the VSM does represent the needs of the client in a project but is typically in contact with the client through the project team. The lean sales team actually performs the activities with the customer.

The VSM interacts with the team offering the priorities and reviewing the results with the Team Coordinator at each control point. It is important to note that as in Scrum there are two important principles. During iterations, the sales team has complete autonomy and should only be interacted with through the team coordinator. The other similarity is that the VSM is the one and only one person who has the final authority.

The VSM will prioritize the backlog or the iterations in the marketing value stream. These needs are best expressed or written in the form of User Stories. Depending on the size and complexity of the organization, the Sales Team, the Team Coordinator and the Value Stream Manager may meet to discuss an iteration or an entire marketing cycle. During the meeting the user stories are prioritized and discussed by all involved in the process. The sales team then takes these stories and breaks them down into activities and create single, multiple iterations that may be completed in a linear or parallel fashion. When these stories are completed, a control gate review occurs where the results are accepted or rejected by the Value Stream Manager. The VSM, the Team and the Team Coordinator discuss improvements, the next stage or coordinate a handoff to another Team. This process should have a very strong focus on where the customer is in their decision making process and what the best way is to support them at this time.

Whereas the team concerns itself around the Voice of the Customer (VOC), the VSM must look at both VOC and Voice of Market (VOM). Following the 5Cs of Driving Market Share outline, the VSM must:

1. Identify specific products/markets that offer organization best options for growth.
2. Create a value model for each of targeted product or market.
3. Clearly state the organization’s competitive value proposition.
4. Identify the direction needed to enhance that value proposition.
5. Monitor competitive value proposition.

The Value Stream Manager can be one person or an entire department. However, for the VSM to be effective, they have to have control over setting the priorities not only for the sales and marketing teams but many times for product development. Their decisions should be visible to the entire organization. As I like to put it, they hold the gold within the company: knowledge of both VOC and VOM. This visibility makes the role of VSM both demanding and a very rewarding one.

Related Information:
Identifying your Lean sales and marketing teams
What will your workplace be like in 2020?
What’s behind Collaboration and Value Networks?
SALES PDCA Framework for Lean Sales and Marketing

Lean Marketing House in Paperback

A few reasons to consider the Lean Marketing House book:

Is there a reason to use Lean in Sales and Marketing?
Do you have to be practicing Lean in the rest of the company?
Is Lean Marketing the same as Agile Marketing?
How does A3 problem solving relate to Marketing?
Why is Social Media so Lean?
Can your company ever complete a Lean Transformation without Sales on board?
What does Knowledge Creation have to do with Lean?
What are the Lean Marketing Tools?
How would you create a Lean Transformation?
Develop stronger partnerships with your customers?
Provide a methodology to become more precise in your sales and marketing?
Begin a continuous improvement program in your sales and marketing?

I have just received the shipment of Lean Marketing House book in perfect paperback form. That means I no longer have to create the ring-bound version. in celebration of this, the first 100 purchases will include the following:

1. Lean Marketing House Paperback Book
2. Lean Marketing House book on CD (Direct access to the Links Provided)
3. Marketing with A3 Book on CD ((Direct access to the Links Provided)
4. Best in Market by Dr. Eric Reidenbach on CD
5. Membership on the Marketing with A3 website
6. Related audio recordings and eBooks on subject.
7. 10% Discount Code to the Lean Sales and Marketing Summit. (30 day limit)
8. 50% Discount code to Driving Market Share Program (30 day limit).
9. 30 minute free coaching session on Lean Implementation (must be scheduled).
10. All items will be shipped to you (No Downloads).

Book Description: When you first hear the terms Lean and Value Stream most of our minds think about manufacturing processes and waste. Putting the words marketing behind both of them is hardly creative. Whether Marketing meets Lean under this name or another it will be very close to the Lean methodologies develop in software primarily under the Agile connotation. This book is about bridging that gap. It may not bring all the pieces in place, but it is a starting point for creating true iterative marketing cycles based on not only Lean principles but more importantly Customer Value.

It is not about being in a cozy facility or going to Gemba on the factory floor. It is about starting with collaboration with your customer and not ending there. It is about creating Sales Teams that are made up of different departments not other sales people. It is about using PDCA (Plan-Do-Check-Act) through-out the marketing cycle with constant feedback from customers that can only occur if they are part of the process. It is about creating value in your marketing that a customer needs to enable him to make a better decision.

It is about managing a Value Stream Process. This is going to require re-thinking about the way you do business and the way you think about your markets. More importantly the way you think about Value. Value in terms of how your market defines it. Stop thinking about product or even product benefits. Your marketing systems must support the delivery of value to your customer at a much higher rate than your competitor. Targeting that Value proposition through the methods described in this book will increase your ability to deliver quicker and more accurately than your competitor. It is a moving target and the principles of Lean and PDCA facilitates the journey to Customer Value.

This is the only Link that will be provided for this offer.

  Lean Marketing House Perfect Paperback

Related Information;
5 Cs of Driving Market Share
Best in Market
Marketing with A3
Lean Sales and Marketing Summit

Why does sales and marketing operate to a different quality standard?

After reviewing the new edition of Juran's Quality Handbook: The Complete Guide to Performance Excellence 6/e,  I wondered why companies hold the entire company to such a high quality standard but leave Sales and Marketing off the hook. Technological measures of quality has existed on shop floors for many years, but measures of quality have not existed in sales and marketing. It has been difficult for organizations to recognize this need as they lacked the necessary alarm signals.  As an increasing number of companies become commoditized and market share dwindles, these alarms are going off all over country. It is simply a lack of demand.  

The good news is that the methods, tools and know-how now exist to use quality in your process to drive market share and increase revenue. Sales and Marketing needs to become part of the quality process within your company. not only to improve their own methods but to lead their companies out of this dilemma of surviving in an economy of an overabundance of supply. However, what’s not in place is the culture of continuous improvement and the ability to understand the changing perception of customer value.

In the new Juran Quality Handbook they listed the lessons learned by organizations that were successful in their quality initiatives. Their analysis showed that despite differences among the organizations, there was much commonality. These common strategies included the following:

1. Customers and quality have top priority. Thus customer satisfaction was the chief operating goal embedded in the vision and strategic plans. This was written into
   corporate policies and scorecards.
2. Create a performance excellence system. All organizations that attained superior results did so with a change program or a systematic model for change. This model enables
   organizational breakthroughs to occur.
3. Do strategic planning for quality. The business plan was opened up to include quality goals and balanced scorecards, year after year.
4. Benchmark best practices. This approach was adopted to set goals based on superior results already achieved by others.
5. Engage in continuous innovation and process improvement. The business plan was opened up to include goals for improvement. It was recognized that quality is a moving target; therefore there is no end to improving processes.
6. Offer training in managing for quality, the methods and tools. Training was extended beyond the quality department to all functions and levels, including upper managers.
7. Create an organization-wide assurance focus. This focus is on improving and ,ensuring that all goods, services, processes, and functions in an organization are of high quality.
8. Project by project, create multifunctional teams. Multifunctional teams, adopted to give priority to organization results rather than to functional goals, and later extended to include suppliers and customers, are key to creating breakthroughs in current performance. They focus on the “vital few” opportunities for improvement.
9. Empower employees. This includes training and empowering the workforce to participate in planning and improvement of the “useful many” opportunities. Motivation was supplied through extending the use of recognition and rewards for responding to the changes demanded by the quality revolution. Measurements were developed to enable upper managers to follow progress toward providing customer satisfaction, meeting competition, improving quality, and so on. Upper managers took charge of managing for quality by recognizing that certain responsibilities were not delegable—they were to be carried out by the upper managers, personally.
10. Build an adaptable and sustainable organization. Quality is defined by the customers. Customers are driven by societal problems. Quality now includes safety, no harm to the environment, low cost, ease of use, etc. To succeed, all organizations must focus on attaining sustainable organizations.

You may consider your organization is doing many of these things very well. I challenge even the most successful companies to rate their sales and marketing by the same standards. What would you find? Just citing one area, do you measure improvements of processes, or do you compensate people? These ten strategies are possible in sales and marketing. However, quality improvements are seldom obtained without a methodology.

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

Related Posts
The Future of Marketing is Lean
PDCA for Lean Marketing, Knowledge Creation
Lean Marketing Creates Knowledge for the Customer
Why Lean Marketing? Because it is the Future of Marketing …
The Pull in Lean Marketing
The 7 step Lean Process of Marketing to Toyota
The Marketing Knowledge Spiral

Does Lean Marketing deliver what the customer wants?

Customers do not want more choices. They just want what they want, period. And in an economy that there is less demand than supply, they can get it. Companies in response to this create more features, more options in their products or services. They will take the deep dive into segmenting their markets and through the use of technology may be reaching the ultimate goal of marketing to a single person. Marketing technology exists that allows us to customize mass mailings, e-zines, recordings and other media in an attempt to personalize each and every marketing effort.

Companies have embraced this marketing technology and without anything more than data can provide a very unique message. Their products and services are also provided under the disguise of tailored to your needs while just being a version of a core product line. You do not need to look any further than the universities. Their customized mailings to your children and the breadth of degrees they offer are just phenomenal. It is the manipulation of data that provides this ability and I venture to say does little in swaying a high school student to attend. I believe that decision is reached by the influencers in that person’s network.

This technology is important though. It allows us to capture information about clients in a non-offensive way and in a format that allows us to automate much of the information for distribution. From a product/service standpoint creating the different version of our core product allows us to extend our reach to a greater audience. Case closed?

If it is, we forgot about that influencer thing I mentioned. Trust is difficult to obtain from data. Trust comes from people. Knowing all the influencers and marketing certainly can help but quite unfeasible in most circumstances. The data you obtain must be used to facilitate a learning atmosphere between you and your customer/prospect. You must also be willing to share seats with the customer and leave him teach you versus you being the teacher. The more they teach you the more difficult it becomes for a competitor to take them away.

In the Marketing with PDCA cycles that are utilized in Lean Marketing, we create that collaborative environment where learning and knowledge creation takes place. In the landmark book, The Experience Economy , the authors built a pyramid of “The Progressions of Economic Value and Valuable Intelligence. You can think of your own product stages and how a customer/prospect looks at your product. Each level of economic value corresponds to a level of valuable intelligence (commodities to goods, goods to data, etc.). From the book:

While the economic offering becomes more and more intangible with each step up the next echelon, the value of the offering becomes more and more tangible. Economist often talk about the “line of intangibility” between goods and services – to which we add the line of memorability” before experiences and the “line of sustainability” before transformations. Goods and services remain outside of the individual, while experiences actually reach inside of the individual to the value of the offering.

They go on to say:

Nothing is more important, more abiding, or more wealth-creating than the wisdom required to transform customers. And nothing will command as high a price.

PDCA is looked at most as problem solving methodology. I think it is the core of a Lean Culture. In the beginning stages of developing a Lean Marketing program I distinguish the difference by using Marketing with A3 as the problem solving tool of choice. This enables me to distinguish the difference between the tool A3 and PDCA which is the knowledge creation culture that is the essence of Lean Marketing. The sharing, experience and interaction of knowledge with the customer created through PDCA is what the customer wants. He proves it by the value he assigns to it.  

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

Related information:
Lean Thinking A3 Sales Call Sheet
Kill the Sales and Marketing Funnel
Lean Problem Solving approach
The Future of Marketing is Lean
Why Lean Marketing? Because it is the Future of Marketing

Is your marketing concentrated in area that makes a difference?

Identifying your customer segments is imperative in your future marketing efforts. If you have not identified those segments well, you will be discounting, providing unpaid services and minimizing profits to be competitive in the market place. Customer (Market) Identification is not easy. However, it may be the most important task that marketing has within your company.

First look at how you determine pricing, paraphrased from the The Going Lean Fieldbook:

Do you look at pricing from the standpoint of a cost plus or from the standpoint of what the customer is willing to pay for the value you receive?

Taiichi Ohno felt that most companies set their pricing models incorrectly and said, “When we apply the cost principle selling price = profit + actual cost, we make the customer responsible for every cost. This principle has no place In today’s competitive automobile industry…The Question is whether or not the product is of value to the buyer.”

Toyota shifts the equation around in a way that is mathematically equivalent but creates an entirely different meaning: selling price - actual cost = profit. The company recognizes that customers not the company assess the value of its products. And, like it or not, it is customer perception of value that forms the basis for pricing. Setting a sticker price higher than this will only drive customers to competitors' more reasonably priced products.

As a result profits are not set by the company but they are simply the difference that the customer is willing to pay (their perceived value) and what it takes the company to produce it.

This is a subtle difference but important. As Dr. Reidenbach said in a guest blog post, “Is your price worth it?” Are you adding a perceived value to the product? Many resellers and small shop owners struggle with this and the internet has played a large part of changing the landscape as we see it. All products are commoditized, practically instantly. The difference in price can only be justified by the value your customer places on the service you provide.

If this is the case, would we not be better off trying to concentrate our sales and marketing efforts on growing the areas that our customer values. The Critical to Quality points (CTQs) that are important to our customer. In the diagrams, I try to depict the old model of pricing where we create demand and support material and labor through expenses. At the end of it we determine what profit we want to make and add it. The new model is that the customer determines the value that you add to the product through the price they are willing to pay. If they determine that your services does not warrant the price, they typically have multiple sources to choose from. If you are reseller, they can probably get the exact same product.

When you look at your sales and marketing resources and budget you might be surprised to find it seldom addressing the CTQs. The real reasons a customer buys from you. Many times, I see resellers and retailers marketing products that are carried by numerous others and many of them at perceived lower prices. They actually are advertising for lower profits.

Shameless plug: Dr. Reidenbach and I have put together a program called the 5Cs of Driving Market Share. The first step in the process is Customer Identification. Though the process is based upon the problem solving principles of DMAIC, it was created for anyone to understand and use. It does not require a proficiency in Six Sigma.

You can also listen to a podcast that discusses many of the principles:
Applying Six Sigma Marketing to become Best In Market

Related Posts:
Lean your Marketing by Dominating with Customer Value
The Bridge Between Six Sigma and Marketing
Can Voice of Customer deliver?
Unclear Customer Value leads to Failure

Value Stream Mapping for Marketing

I advocate the use of the value stream map to outline your customer's buying process and to vividly demonstrate how your marketing efforts mimic that process. Consider the map as a tool designed to highlight activities.

The current state serves as a guideline to communicate the opportunities so they may be prioritized and then acted upon. It helps build a shared and consistent understanding of the customer's experience of your process and of your business as a whole. Value stream mapping can enable your entire organization to understand what the customer experiences in order to purchase from you.

It is difficult many times to stop organizations from playing what if games when we are just trying to determine the current state. I usually just take a sticky note and stick it out to the side for future reference. When we do start playing the “What if” games: What if we eliminate this step? What if we had different information at this point in the process? You are in essence identifying ways in which the quality of your marketing process can be improved.

During this process you should also be able to identify critical control points or interfaces with the customer. These critical points deserve special consideration as they typically will be the deciding factor for your customers. You may ask what they will look like. I typically find two obvious areas are the cause of most concern. First is the area of flow. If your marketing process does not flow well in its delivery to the customer, it seldom flows well for the customer. Your marketing must be in sync with the customer's buying process. A Crystal Ball would be great but if your typical customer takes three months to make a decision about your product trying to accelerate or stretch that process out will seldom prove successful.

Secondly, a clear-cut understanding of how that product meets your customers’ needs is imperative. A strong value proposition is the first step in building a successful value stream. Many organizations struggle with this concept and do not utilize the tools available to understand their position in the marketplace. Understanding how your customer perceives your position in the marketplace relative to your competition may be the single most important issue you face.

Many organizations try to build their first marketing value streams from an organizational perspective. I encourage breaking down your value stream into product/market. Seldom will your organizations products or the markets they compete in the so clear-cut that you can have one simple value stream. Do you have a clear-cut value stream for a product/market that you can map from inquiry to purchase?

Related Posts:
Value Stream your process thru Lean Accountancy
Using Value Stream Mapping in Lean:
Value Stream Mapping differs in Lean Marketing:
Using FIFO in the Value Stream Mapping process for Marketing
5Cs of Driving Market Share Program

Unclear Customer Value leads to Failure

All of us know we must distinguish ourselves in the marketplace to be successful. However, do we go to the marketplace to find that unique dimension of matched value is? In fact, there’s been study after study showing that we don’t even get out of our own organization with an understanding of our own unique value proposition.

When organizations were dominated by one single individual your value proposition was very clear. Different views and questions were discouraged. Now in the age of collaboration, it is becoming more and more difficult to arrive at a clear understanding of the value that you provide your customer.

One of the classic marketing books, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market says that the only way to reach common ground is to find fact-based answers to 5 very fundamental questions:

1. What are the dimensions of value that customers care about?
2. For each dimension of value, what proportion of customers focus on it as their primary or dominate decision criterion?
3. Which competitors provide the best value in each of these value dimensions?
4. How do we measure up against her competition on each dimension that I?
5. Why do we fall short of the value leaders in each dimension of value?

The authors go on to say; Value stems from the product - from unique features that deliver superior results - and from the kinds of service benefits provided . They are measured against customers expectations, so products and services really offer benefits only if they substantially exceed competitors offerings. Competitive parity, after all, creates a base level for customer expectations.”

These 5 questions are just a starting point. Your value proposition must continue to increase at a more rapid rate that your competitors. However, you cannot sustain your customer value proposition without being part of your customers business. Everyone in your company must walk in the shoes of your customer. Experience what they experience. If you do that, your head might just rise above the clouds that your organization has been in and start living the value experience. Remember, Customer Value is the best leading indicator of Future Market share!

Related Program: 5Cs of Driving Market Share

Related Posts:
Linking the 4Ps to Lean Marketing
Best in Market eBook
Value Stream Marketing and the Indirect Marketing Concept
Marketing Kanban: Marketing Kanban
Value Stream Mapping
Lean Six Sigma:

Do you know the Value of your Product?

I have been working with Dr. Eric Reidenbach of the Six Sigma Marketing Institute in the development of the 5Cs of Driving Market Share program. In the process, he has developed a Customer Value Assessment Program. You will receive five surveys based 5Cs of Driving Market Share: Customer Identification, Customer Value, Customer Acquisition, Customer Retention and Customer Monitoring.These 5 surveys will expose your weaknesses and strengths in each of the 5 Cs of Driving Market Share. Before receiving, the next survey, you will receive evaluation/assessments sheets that will allow you to evaluate your scores and some actionable steps to improve in this area.

This Assessment program serves as an introduction to the 5Cs of Driving Market Share Program, a comprehensive program that has been deployed in a number of Fortune 100 and Fortune 500 companies and has produced positive market share growth.It is not a project-by-project approach for reducing the costs of marketing activities, but rather an approach that seeks to enhance marketing’s effectiveness and efficiency.

What I like about this program is that it provides a real science to the marketing process. However, there is one premise that you have to accept as a truth(Six Sigma Marketing Institute has data to substantiate it): Value has been shown to be the best leading indicator of market share and top line revenue growth.

Most of us are product focused nor the ability and know-how to access the market for this knowledge. Value is typically limited to the value in the product or product features. Practically every company claims to offer value. But do you really know what value means to your customers? The assessment makes an effort to figure out what value looks like to your customer—the insight may surprise you. The biggest surprise that I had was most companies do not even define value the same within the organization. If that is true, how focused could you be in defining your market?

A good read on this subject is the Best in Market eBook. The eBook was written in response to what the author has experienced working with manufacturers, and is aimed at Quality personnel including Lean and Six Sigma practitioners as well as Marketing professionals.

Related Information:
Value Stream Mapping
Six Sigma Modified DMAIC
Value stream Marketing

Your Customer never experiences averages

W.  Edwards Deming estimated that a lack of an understanding of variation resulted in situations where 95% of management actions result in no improvement. People struggle with variation but as Dr. Deming said if you fail to understand this concept you fail to improve. Understanding variation could be the strongest asset that Six Sigma brings to the marketing process. Variation is the enemy of Six Sigma, removing variation is practically what the methodology was built on.

One of the first things that I learned in Six Sigma is that when applying metrics you must measure variation from a standard. It is not about averages. If you want to improve you must establish a standard and then stabilize the process. Even if it is just placing upper and lower control limes for example. If you operate within this range, you have a standard and you can begin to improve. 

Here is a short 4 minute video explaining variation

Your Customer never experiences averages, they experience all your variations.

Related Posts:
Variation
If you are going to Improve, you have to know your math
Creating your VSM

Competing in a Value Driven World

This is a Guest blog Post by Dr. Eric Reidenbach, the Director of the Six Sigma Marketing Institute. I think Dr. Reidenbach’s thoughts are right on target. We keep basing Continuous Improvement efforts in areas that are making little difference to the bottom line. Most manufacturers constraints are in the marketplace and till we address and solve the issue of demand, improvement in operations mean very little.   

Dr. Reidenbach’s Message:

Production is driven by consumption. Manufacturers will not add new shifts or open new plants unless there is consumption - demand. It really is that simple. No amount of targeted tax breaks, free trade zones, industrial policy, lean initiatives will create the demand necessary to drive production and employment. These are factors that operate on the production side of the equation, not the consumption side.

What will drive production is giving buyers a compelling reason to buy. That compelling reason to buy is value – superior value. Value is the interaction of quality and price. High quality products and services offered at a competitive and fair price are the drivers of value. Every undergraduate econ student that is paying attention in class knows that value is the lubricant that facilitates exchanges. The buyer seeks high quality at a fair price (value) while the producer seeks payment (value).

Recessions are often referred to as conditions of excess inventory that requiring an adjustment. The buyer is telling manufacturers that the value offered in the proposed exchange is not sufficient to complete the exchange. Until the producer understands value and its catalyzing effect, exchanges will be stultified.

There is a growing emphasis on retraining our manufacturing sector. Until this retraining includes education regarding the identification, creation and delivery of value, we will be doing the same thing over and over but expecting different results. NAM (National Association of Manufacturing), state manufacturing associations, AME (Association of manufacturing Excellence) all have a role to play here.

Most manufacturers tend to be product focused. They believe that quality and value are a function of the product and product features. They ignore all of the other elements of the value delivery system such as product support, parts availability, technical support, and distribution – all of the elements that make it “easy to do business with”. This is what I call “value myopia” and it severely limits and restricts a manufacturer’s capacity to penetrate markets, domestic and global. They need to refocus on value – become value focused.

Manufacturers are also consumers. They purchase goods and services in their daily lives as well as their business lives. Do they buy automobiles solely on the basis of product features (blue tooth, gps, xm radio) or do they factor into their decision elements such as dealer service, repairs (timeliness of repairs, quality of repairs), availability to get the right parts, the ability to talk with someone at the dealership who knows, someone who tells them the truth, someone who does not talk down to a woman, warranty, cleanliness of the dealership, etc.

My bet is that they do. If they don’t they have to deal with their wives who are often saddled with the job of taking the car to the dealership for service and repairs. Why is it that while they recognize these elements as part of the value package, they don’t take this lesson back to their own operations? Is it because they are so focused on their definitions of quality and value? These are too often words that are abstractions that, in reality, have no meaning when they are divorced from the markets they serve. Quality and value, absent their linkage to the market become nothing more that “conformance” to specs that if the manufacturer is lucky correspond to actual buyer demands.

Many manufacturers are products of engineering programs. I did a search of a number of prominent engineering programs and found no mention of customers, value or markets. I did find a lot about typical engineering subjects such as calculus, trig, aerodynamics, etc. – things you would expect to see in engineering programs. However, the world has changed significantly since many engineering curricula were developed. Buyers are smarter and competition is greater and stronger. The question is – Will U.S. manufacturers have what it takes to compete in this new world? Will they become the superior value providers that dominate global markets? They won’t unless something changes.

Related Information:
Best in Market eBook
Six Sigma Marketing Institute has just released (for a limited time at no cost) a Customer Value Assessment Program which can obtained at http://DrivingMarketShare.com. The program enables an organization to evaluate their organization based on Customer Identification, Customer Value, Customer Acquisition, Customer Retention and Customer Monitoring. This assessment will expose your weaknesses and strengths in each of the 5 Cs of Driving Market Share.

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Be part of the first Webinar Series on the 5Cs of Driving Market Share

Since the publication of Listening to the Voice of the Market, Dr. Reidenbach has published Six Sigma Marketing: From Cutting Costs to Growing Market Share and created the Six Sigma Marketing Institute.  This month we have launched the initial product The 5Cs of Driving Market Share. I know that you want to stay on top of the latest developments and innovations that affect your business.   Such an innovative breakthrough has been made with Six Sigma Marketing – a fact based disciplined approach for growing market share in targeted product/markets by providing superior value.  The power of Six Sigma Marketing is illustrated and embodied at www.drivingmarketshare.com where you can be introduced on using Value to Drive Market Share. 

Six Sigma Marketing has been called the “next generation of Six Sigma” – one focused on value creation, innovation and market performance.  I could not agree more.  With the economy beginning to pick up, many organizations are starting to shift their focus from one of cutting costs to one of growing the business.  I am excited about the power of Six Sigma Marketing and the unique tools that it employs to grow market share.  I invite you to take a few minutes and review the website  - It is an efficient and effective way to transform your company into a value driven business.

The 5 Cs of Driving Market Share Program is being offered at an introductory price of $299 for the rest of the month. In addition to this, we are conducting a 5-part webinar series as added content to the 5Cs which will be included in the $1,299 addition. However, we would like to offer you the opportunity to be part of this webinar series at no additional cost.

Anyone signing up in the next 7-days will be offered a ‘seat” at these webinars. This is an exciting offer as it will never be offered at this price again. This is the same methodology that has achieved these types of results:

1. Equipment Management Company

   1. Increased revenue from $150M to $1.6B over 12 years
   2. Increased market share by 4 – 6X in targeted markets
   3. Achieved record profitability in last 4 years
2. Telecommunications firm

   1. Reduced customer churn by 50%
   2. Reduced service response time by 20X
3. Heavy Equipment Manufacturer

   1. Increased ROE from 6% to 15% in 6 years
4. Plastics equipment supplier

   1. Doubled market share within 1 year
   2. Increased profitability by 5X
5. Packaged goods

   1. Identified key value adding opportunities in multiple product lines

   Value is the best leading indicator for future market growth. Organizations need to change from a customer satisfaction focus to a customer value focus. The Five Cs of Driving Market Share serves as the template for this transaction. I hope you will consider joining on the pathway to Value.

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

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.

  Related Posts:
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  Value Stream Marketing eBook Released

From a Small Restaurant to Apple, Learn how they Capture and Analyze Data

Dr. Kai Yang was the guest on the Business901 Podcast. Our conversation addressed the message of his latest book, Voice of the Customer: Capture and Analysis (Six Sigma Operational Methods). I found it interesting that Dr. Yang has worked with Apple and questioned him about it. Black T's and blue jeans didn't seem like a cultural fit with Six Sigma. Listen to find our the how's and why's of Capturing and Analyzing Data, the Blue Ocean Strategy of Apple and Dr. Yang's description of survey's and the practical example of a restaurant may surprise you. I actually listened to that part twice before I really understood what he meant.

Dr. Yang is a Professor in the department of Industrial and Manufacturing, Wayne State University. His areas of expertise include Six Sigma, statistical methods in quality and reliability engineering, lean product development, lean healthcare, and engineering design methodologies. He is a world well known expert in the area of Six Sigma, Design for Six Sigma and quality for service and an author of five books in the areas of Design for Six Sigma, Six Sigma and, multivariate statistical methods. Prof. Yang’s book, Design for Six Sigma: A Roadmap for Product Development is an influential book that provides a framework to integrate both innovation methods, and traditional statistical quality assurance methods into the product development process. Dr Yang also published over 70 research papers.

He has been awarded over 40 research contracts from such institutions as US National Science Foundation, US Department of Veteran Affairs, Siemens Corp, General Motors Corporation, Ford Motor Company, Chrysler Corporation and Siemens Corporation. Dr Yang is also a well-known trainer in the area of Six Sigma, lean, he conducted numerous training for many companies, such as Apple Inc and Siemens. Dr. Yang obtained both his MS and PhD degrees from the University of Michigan.

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Related Search on Business901 

Books by Dr. Yang - Amazon Book Links: Voice of the Customer: Capture and Analysis (Six Sigma Operational Methods) Design for Six Sigma Design for Six Sigma: A Roadmap for Product Development Multivariate Statistical Methods in Quality Management

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Technorati Tags: Six Sigma,Six Sigma Marketing,Lean Sigma Marketing,Voice of Customer

Value Stream Marketing eBook Released

Joe Dager of Business901 just released a 27-page eBook which provides an overview of the Value Stream Marketing Process. The book is an overview of applying Lean principles to the marketing process. It also serves as an introduction to the Business901 Marketing Kanban and the Value Stream Marketing 28 day program.

Short Excerpt:

Value Stream Marketing is not about developing a repeatable process. Repeatability means doing the same thing in the same way to produce the same results. Though repetition will allow you to convert your inputs to outputs with little variation, it also implies that no new information can be generated and used. Repeatable processes are not effective because precise results are rarely predictable in the marketing process. Reliable processes focus on outputs, not inputs. Using a reliable process, you can consistently achieve a given goal even though the inputs vary dramatically. Reliability is results driven.

Marketing cycles are not completely stable. They are subject to variations caused by new knowledge. They are constantly being improved. The emphasis of activities changes during projects from more emphasis on understanding the customer at the beginning to more constructing and testing marketing functions at the end. We are trying to eliminate variation caused by new knowledge. A marketing process that does exactly the same thing every time is useless, but we are trying to eliminate variation that we cause for no good reason. 

The eBook is available through my Ezine registration or part of the participation in the VSM 28 day program.  These can be found on the Business901 website.   

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Picture was Adapted from a Lean Product Development Diagram by Eric Ries of http://www.startuplessonslearned.com

Technorati Tags: Marketing Kanban,Value Stream Marketing,Value Stream,28-day Program,Agile Marketing

Quit Listening to your Customer’s Heartbeat with a Stethoscope?

 

John Mariotti of Small Business Trends wrote an interesting article titled “A Hazard of Innovation: “Falling in Love With Your Own Ideas” on the American Express Open Forum. John states:

There seems to be widespread agreement that innovation is the path to profitable growth and competitive advantage.  If that is true (I think it is true), then why aren’t more people doing it?  And why do so many new products fail.  I know of no “hard statistic” other than the generalized one “that over 90% of new products fail.”  But again, I ask, why?

Here are a few proven methods to make your idea more successful and prevent its premature failure: First and Foremost - Focus Outside, Not Inside

If such common and deep-seated beliefs that lead to new product failures, (and they aren’t limited to products—it could be new processes, new acquisitions, new…whatever), what can you do to guard against this?   How about getting some independent outside opinions?. Here are a half-dozen more “safeguard tests” that can be used to enhance the likelihood of success and reduce the chance of innovation failures.

1. Market Research
2. Focus Groups
3. Surveys
4. Consumer Panels
5. Test Markets
6. Truth Tellers

Trust, but Verify is a term used in delegation and management.  When a group of New Product, Marketing or Sales people is exuberantly proclaiming the greatness of a product, investigate more deeply.  If these proclamations are coming in the face of lackluster performance in any of the above six “safeguard tests” dig deeper, and fast.  Verify that this is not a group who has “fallen in love with their own ideas.”

Don’t give up too easily or quickly—but don’t be afraid to “cut your losses” and move on.  Innovation is wonderful, powerful, intoxicating and exciting.  Failure is devastating.  Use every means you can to prevent failure and improve the chance of success.  Often, a small change, a minor difference in pricing, promotion, features, packaging, or placement is all it takes to transform a potential loser into a winner.

This is crux of the article and I encourage you to read it in its entirety. He explains each of the 6 points and the picture is worth the click. However, this article outlines many of the reasons that has driven me to start utilizing the Agile, Lean Product Development methods in marketing. Involving, Verifying, Creating and Scaling as early in the process as possible is imperative in today’s marketing. The motto: Fail often and Fail early approach is much better than hoping that you will be in that 10% of successes. I mean, really are you batting 900? If you wait for the perfect product there may be to much invested to change. The tools are there to facilitate early customer involvement but are we utilizing them? Are we even participating in our customer’s communities that will allow us to do this?

It is very difficult to get many organizations to listen for that heartbeat. They want to monitor the process but keep it inside to the last possible moment. If you think about your organization and the marketing of a new product is it your internal structure of marketing, engineering and finance that drives the process? Should innovation and development not be more centric to sales and customers? Developing better methods to hear the Voice of the Customer is essential. Is your organization still listening to your customer’s heartbeat with a stethoscope or have you moved on to an ultrasound?

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Using work cells in Sales and Marketing!

Cellular manufacturing is one of the most powerful lean tools. It will allow for smaller lot production, quality improvements, and shorter lead times and simplifies the implementation of pull. Typical manufacturing systems had the same machines all grouped together and as a result batch type manufacturing was developed. As manufacturers developed cellular systems, they found quality improved and smaller lot quantities could be efficiently handled. Many of the work cells were rearranged into U-shaped or L-shaped patterns. This allowed one worker to operate several machines which improve productivity. The benefits have been very well documented and applied to many industries.

Related Post with other pertinent links: (Why you should use Kanban in Marketing?)

Followers of my blog have seen how I use DMAIC principles in discussing the marketing funnel. And in reviewing, discussed how adding toll gates for identifying when prospects should move from one stage to the next. Inside the stages, we have different marketing programs that are taking place. But I really never talked about the personnel that were handling these programs. In most sales and marketing applications, you will have marketing assigned by the duties they do and salespeople assigned to certain accounts. I think it might be interesting to consider what we have learned in U-shaped or L-shaped work cells.

 

Instead of the typical arrangement, what would prevent an organization of assigning the personnel and cross-training them within one of the marketing stages. This way they would become experts within the stage and be able to respond to the needs of a prospect better and more efficiently. Since they are handling the tools of the stage that particular area would have a better chance of improving the methods utilized within it.

In recent times quality has suffered in sales and marketing. Many times the customer seems to be more of an expert than the salesperson calling on them. Other times experts have to be brought in and duplication of manpower takes place. Many companies have a sale’s closer; maybe sometimes a sales manager that would come in and have the power to close a prospect when ready. If you were doing that during each stage the likelihood of passing on better qualified and more prospects would occur. Another consideration that someone may find fault with this type of thinking is geographic boundaries. However I believe that excuse is seldom the case.

The key to your thinking should be in flow rather than function. Taking each individual stage and think about creating a work cell by defining the operations that take place within that stage. The number of resources within that stage will have to correlate to the number of prospects within the stage. It must be recognized that numbers don't always work out perfectly or that certain talents may have to be utilized in several different stages. But I believe that the quality of the interaction would increase with the customer.

The goal lean is continuous flow was close to that as possible while eliminating waste of waiting and a waste of overproduction. I believe that this type of arrangement would be in organizations first step in leveling sales volume.

Do you think work cells can work in Sales and Marketing? Are they already?

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Technorati Tags: Value stream Mapping,A3 Reporting,DMAIC,Six sigma,Work Cells,Lean,Marketing

Theory of Constraints Podcast with Dr. Lisa Lang

My guest this week (yes, we talked to long) and next week was “Dr. Lisa” Lang. She is considered the foremost expert in the world in applying Theory of Constraints to Marketing and currently the President of the Science of Business. She recently served as the Global Marketing Director for Dr Goldratt who is the father of Theory of Constraints and author of The Goal. Dr Lisa has a PhD in Engineering and is a TOCICO certified expert in Theory of Constraints. She is currently serving on the TOCICO Board of Directors.

This week podcast centered on applying the Theory of Constraints internally within an organization and creating a Control Poit within you system.  If you focus on what’s important and leverage your resources where they can have the largest impact, the results are quick and substantial.  Theory of Constraints is the focusing mechanism and then Lean and Six Sigma tools are used to leverage.

Dr. Lisa is the author of 3 books: Maximizing Profitability, Achieving a Viable Vision, Increasing Cash Velocity, and Mafia Offers is due out in May 2010. Science of Business specializes in increasing profits of highly custom businesses and applying Theory of Constraints, Lean and Six Sigma to sales and marketing, having developed the Mafia Offer Boot Camp, Velocity Scheduling System, and Project Velocity System.

Before becoming a consultant, Dr Lisa was in operations, strategic planning, purchasing, R&D, and quality while working for Clorox, Anheuser-Busch and Coors Brewing. She is known for having developed the Anheuser-Busch plastic beer bottle. In addition to consulting, Dr Lisa is a highly sought after Vistage/TEC speaker on “Maximizing Profitability”. Dr Lisa also provides professional keynote speeches and workshops for organizations like: TLMI, ASC, NTMA, MCAA, NAPM and private events for corporations like: TESSCO, Bostik, GE, Pfizer and Sandvik Coromant.

 

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Technorati Tags: Theory of Constraints,Marketing,Mafia Boot Camp,Manufacturing,Machining,Velocity Scheduling

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