Don’t Market without your Kanban

Most people think about the marketing process as a function of lead generation and follow-up. They envision the marketing funnel which creates an excellent visual image of collecting prospects and narrowing the field till you produce a customer at the bottom. This image is often times a fair reflection of your marketing budget. You spend most of your money reaching out to the masses. It is an expensive proposition and seldom produces measurable results. However, you can’t just cap the funnel because you never know where your next lead or sale will come from.

The job of marketing is to increase prospects, create better odds in obtaining a customer, and increase the number and dollars per customer. I believe marketing is also responsible for decreasing the dollars in obtaining a customer. I think these five parts can be best served through Lean and more specifically using a Marketing Kanban.

If you introduce Lean into marketing it will not take too long before you are creating a Value Stream Map of the process. Most marketing people do not look at marketing as a process so it may take a seasoned mapper to facilitate. Without drilling down too far in the process you can gather numbers of prospects in each segment and the conversion rates as they proceed through your value stream. Typically to accomplish this you must use only one marketing channel at a time or segment your list by a category. When first mapping the process, use the best defined channel so that you do not fight the process.  The Value Stream Map created will be the outline for your Kanban.

It continues on and ends with this paragraph:

Don’t think of Kanban as a planning tool; think about it as an execution tool. Improving your marketing process does not have to constitute wholesale changes nor increased spending. Getting more customers into your Marketing “Kanban” may not solve anything at all. Improving what you do and increasing the speed that you do it may result in an increase in sales and decrease in expenses. That’s marketing!

Then entire post can be read on the Lean Blog.

Mark was a guest on my podcast last year and it resulted in two posts on entirely different subjects.
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The Value Stream Marketing diagram symbolizes exactly how important a cadence is. I use a typical Scrum drawing and the 2 iteration circles to highlight the change in cadence for a target prospect when he nears the buying stage and the present customers that need a different type of cadence.

What is Cadence? Cadence is determined by the quantity and the frequency that a prospect or customer moves through a marketing cycle. In a true Lean Operation, the prospect/customer should set the pace. A mismatched cadence or when you try to force feed your customer usually will disrupt and sometimes even end the marketing cycle. Creating a smooth or level flow is one of the prime reasons that a Marketing Kanban should be used.

When we create our Value Stream for a prospect/customer we like to calculate our normal marketing cycle time. It differs from takt time which is normally associated with Value stream Mapping. First of all it is not exact, it is an average time. Every customer will be somewhat different. However, I think the surprise is you will see a definite average cycle time (there is an element of variation) that the majority of your prospects take. The more a prospect is qualified the more precise you can become with your cycle time or cadence. On the other hand, the likelihood of getting orders will decrease significantly as you move away from this time.

In Lean, a pacemaker point is used so that we can schedule around one point and create a level flow. In a Marketing Kanban, I like to use the constraint or the bottleneck as my control point. You can argue that you have an external constraint, outside of your marketing. If that is true, then the dollars and resources must be allocated appropriately. However, I would argue that there is a constraint within your organizations marketing cycle that is limiting your throughput. I believe that dealing with this constraint is easier, less costly and more efficient than dealing with trying to fill the funnel.

Having a handle on your control point is not the only part of cadence you need to be concerned about. Your marketing cycle should have a rhythm about it! For example, maybe it takes 2 weeks to fill up a webinar or 3 months for a workshop or auto-responders may be more effective over a 8 week cycle versus a 6 week. Cadences can be changed; they may even be different depending on the company size you are dealing with. The first thing you must do is to determine what it is before trying to make it something else. That’s half the battle.

We have discussed cadence in the sense of a prospect/customer moving through the marketing cycle but there is another important function of cadence. In most outbound advertising media we always discuss frequency. You need to be seen or heard on a consistent basis for your advertising message to work. Ad reps used to tell you that you need 3 or 4 times. Now, I hear that you need 7 or 8 times. That really does not surprise me with the amount of noise that is out there. However, we know the shift is taking place to inbound marketing. Inconsistent inbound strategy is not only ineffective but can be damaging to your organization. A consistent strategy that is easily understood throughout the entire organization needs to be deployed for best results. You must develop a certain cadence to it. If you blog 3 times a week, blog 3 times a week. You could even set-up times to Twitter two times a day. I call them Twitter breaks. If you develop a rhythm or cadence to your efforts it will be easier to build a repore with your community.

As I was looking around for a picture or video to include in this post, I ran across this video.

This video is part of the DZone Agile Methodologies Resource Center, sponsored by VersionOne. Click here for additional resources on this topic. In this presentation, Katia Sullivan talks about agile topics like ‘good’ and ‘bad’ cadence as well as the communication gap between business managers and developers/IT. Katia Sullivan is the product specialist at VersionOne.  Her expertise is in best practices for agile tooling.

P.S. The take away from this post should be that Cadence is about Consistency and Flow!

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Jim is the Past President and CEO of iPower Technologies, a company serving the distributed generation market of electrical power. Luckman has worked in the auto industry for 34 years working at Delphi Automotive (formerly part of General Motors). Jim current efforts include leadership coaching, application of lean in R&D and application of lean to software development. He currently coaches companies interested in company-wide lean transformation. Jim is a partner in Lean Transformations Group, LLC

Jim will be the instructor for this LEI Workshop in Indianapolis on June 22nd – Value-Stream Mapping for the Office and Service: This interactive workshop demonstrates how to apply value-stream mapping, a fundamental and critical tool, to address what many companies find difficult to do: making a fundamental change in business processes such as administrative, professional, and transactional activities. You will see how the key elements of lean thinking and value-stream mapping apply to such activities by identifying key processes to tackle, drawing an accurate current-state map of each process, applying lean principles to envision a leaner future-state for each process, and implementing the future-state in a way that can be sustained.

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From Wikpedia: In product development, the Minimum Viable Product or MVP is a strategy used for fast and quantitative market testing of a product or product feature, popularized by Eric Ries for web applications.

A Minimum Viable Product has just those features (and no more) that allows the product to be deployed. The product is typically deployed to a subset of possible customers, such as early adopters that are thought to be more forgiving, more likely to give feedback, and able to grasp a product vision from an early prototype or marketing information. It is a strategy targeted at avoiding building products that customers do not want, that seeks to maximize the information learned about the customer per dollar spent. "The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort."

A MVP is not a minimal product, it is a strategy and process directed toward making and selling a product to customers. It is an iterative process of idea generation, prototyping, presentation, data collection, analysis and learning. One seeks to minimize the total time spent on an iteration. The process is iterated until a desirable product-market fit is obtained, or until the product is deemed to be non-viable.

A Minimum Viable Product may be an entire product or a sub-set of product (such as a feature).

• Product: (smoke test) The canonical MVP strategy for a web application is to create a mock website for the product and purchase online advertising to direct traffic to the site. The mock website may consist of a marketing landing page with a link for more information or purchase. The link is not connected to a purchasing system, instead clicks are recorded and measure customer interest.
• Feature: (deploy first, code later) A link to a new feature in a web application may be provided in a prominent location on an existing website. The feature is not implemented, rather an apology, mock-up, or marketing page is provided. Clicks of the link are recorded and provide an indication as to the demand for the feature in the customer base.

Aardvark shares its methods behind creating a minimum viable product and proving it.

What prompted me to re-visit the MVP was the book, Rework authored by the 37signals team. 37 Signals creates simple small business software and their products include Ruby on the Rails and Backpack. Their motto is goodbye to bloat and provide simple, focused software that does just what you need and nothing you don’t. Rework is…

“Inspirational. REWORK is a minimalist manifesto that’s profoundly practical. In a world where we all keep getting asked to do more with less, the authors show us how to do less and create more.”

-Scott Rosenberg, co-Founder of Salon.com and author of DREAMING IN CODE

If you need to buy a book for an "entrepreneur," in the book they call them “starters") this is a good book to ground them in the real world. If you are a follower of the Lean Start-up craze this is also a book that coincides with many of the same thoughts. 

The MVP is a key term that I think should be considered more in the marketing world than what it is. When I think about some of the best advertisements, they are all geared around one simple thought and message. Look at any Steve Jobs presentations, “The Worlds thinnest Notebook” for example. Who can forget the notebook being slid into a manila folder? Getting rid of the hype and keeping it simple should be part of our marketing mantra.

The other part of the book that really hit home to me was their ability to create products out of what they do. I am always amazed in the consulting world on how few of people practice what they preach, (Myself included at times). How many consultants that preach planning, really plan themselves? How many Six Sigma Consultants, use their own tools? I think it is important to walk your own walk and not just for your customers’ sake. Who better than you to create new products and applications out of what you do, such as 37 Signals has done. Enjoy Rework! I listened to the audio and missed out on many of the cool graphics till I viewed the book’s website.

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The pricing pressures we have faced in the last year or two has even added to the number of non-profitable customers. The rapid commodity of your product and increased Internet purchases are two more examples that has accelerated the decline of profit margins. I can use the analogy of a stream full of rocks (customers) and as the water is lowered more rocks start appearing. These unprofitable customers are appearing daily. However, in these economic times even a bad customer is valued because they seemed to help support your fixed cost. This puts additional pressure on your profitable customers and at a risk that you could hardly afford to continue. If you do, you may start losing the profitable ones.

Most advisors will tell you replace or remove these unprofitable customers. It is sound and prudent strategy, but who is going to give up a customer in these economic times? I certainly would not.

My strategy is to first; rate your customers by profitability. That can be a rather eye-opening experience. It may not only tell you who to value but also what they value about your organization. This of course is the marketing segment that you want to spend your efforts and more than likely your money on developing and maintaining.

Secondly, I encourage you to build your marketing value stream segmenting customers by profitability levels. You may end up with several swim lanes but try to put the marketing flow, your value stream in for each segment.

Thirdly, segmenting these customers will allow you to better see what they don’t value. You may see something they are not utilizing such as training, engineering support, etc. Not all people or organizations value the same thing. To build the unprofitable customer segment into a profitable stream may only take the removal of certain items, streamlining your offering. Other features may have developed into your product that became normal and just easier to include all the time. Strip these out and offer a lower cost model. I am not necessarily thinking about just the end product or service but also the overhead associated in operations, sales, and marketing.

Compressing this value stream may even create additional opportunities. Customers left to their own imagination on how to utilize a simple product that they understand create some of the best product innovation. You will even get better at distinguishing your customer’s preferences and anticipating their needs. Customers are moving to what I would call marketing singularity. Having marketing segments as small as one person may not be that far in the future. The key will be taking these simpler segments and still maintain profitability rather than just passing them on to your competitor.

 
Kanban –

Related Podcast:  Kanban, could we call this podcast anything else?

His first book, Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results, published in 2003 by Prentice Hall, introduced many ideas from Lean and Theory of Constraints in to software engineering. David can be found at AgileManagement.net

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