This is where we will start finding the true waste in our marketing process. Should we be happy with 2% direct mail returns or accepting the fact that we need to be in front of a customer 7 to 9 times before we get action. We need to ask whether we are making assumptions about what customers need. We need to ask our customers what they need and whether this is properly communicated throughout each stage of our marketing process. An organization exists only to provide value to a customer. Are we supplying value in each phase of our marketing process? If you cannot, see how to re-create that phase in the process or it may be one that you need to stop. Everything you do should create value. If you do, your customers are much more likely to stay engaged.

In my Marketing your Black Belt Webinar, I discuss the lack of clarity as the #1 reason that professional service firms lose jobs. I also believe that your “fuzziness” may directly relate to a customer becoming disengaged. Having clearly defined outcomes based on a customers need will prevent that and reduce your variation in the process. What does variation have to do with the marketing process? Variation creates uncertainty or a lack of clarity. The reason that you may be losing jobs. The lack of confidence in the ability of your marketing processes to deliver on your customer needs. Variation reduces the chances for the customer to trust you.

The simplicity of a single flexible marketing model will create clarity for your customers, staff and as a result better execution. Utilizing a process, you also will spend your time on your customer’s need versus continuously managing the process.

Shameless plug: The Ultimate Marketing System

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

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

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It’s a different concept that I believe is imperative to the future of marketing. Think of the touch points you have with a customer. Is each one of them creating value? As we walk through the process in the Duct Tape Marketing Hourglass, we create a value stream. When your customer moves from one stage to the next stage, do you make it value driven? Is he receiving more bang for his buck? If he doesn’t, he may decide to jettison you right there. The stakes are being raised continuously and you have to deliver.

My E-book on applying the Theory of Constraints to the Marketing Hourglass is a good example on how one part of the marketing process may be limiting your overall revenue. If you find that constraint what would you do with it? How would you improve it? I would first start examining what got the person there to begin with and then increase the value of your offering based on the previous offer. If you are not getting enough referrals or repeat customers, think about an offer you could create that would add additional value to them. Give them something that they can simply not refuse. What would shake them up a bit?

Related Information:

Ebook: Using the Theory of Constraints to improve your Marketing Hourglass

Value stream Mapping

Designers, Marketers THINK BIG

The Eagles always understood!

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John says, “The top half indeed resembles the funnel concept, but the expanding bottom half, to my way of thinking, adds the necessary focus on the total customer experience that ultimately leads to referrals and marketing momentum.”

As I was reading The Duct Tape Marketing Blog, I remembered another blog post John had recently written, Is selling Becoming More Like Marketing? Maybe, it should be turned around in that is Marketing becoming more like Selling? Marketing has always been judged on how many leads we dump into the top of the funnel. The salespeople take over and develop the relationships, build the credibility and make the presentations. After the sale, they maintained the relationships. The Eagles understood the bottom of the hourglass better than any other rperson in the organization. I am saying practically the same thing John did in his blog, but that really is the secret sauce that can make your organization successful today.

The important part of sale sand marketing is the work that takes place in both halves of the Hourglass. That is where the ball usually gets dropped and a prime example is the refusal of many industries to participate in the new wave of marketing. It is just too expensive to nurture, develop repeat and referral business all in person. Don’t get me wrong, you still need that human touch, but you have limited resources and limited Eagles(good salespeople) to go around. Developing effective and efficient communication in these parts of the hourglass is one of the most important things you can do to increase sales.

What does hold you back? Looking for that one thing or constraint that is holding you back is seldom found in the middle of your hourglass, the close. It occurs elsewhere and not having a structure in place to walk people through the 7 stages is imperative. That is why I encourage people to use the Lean tool of Value Stream Mapping and map these seven stages and put some measurements to them. Why? The obvious is that “people perform based on how they are measured” -Eliyahu Goldratt, Theory of Constraints. However, a word of caution as Marketing becomes more like selling, it still is people thing.

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

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Can you retain this customer?

Do you really look at this as a consideration when developing your marketing segments and the value you place on acquiring a certain type of customer? Most of us look at repeat and referral strategies across the board for every segment. Though, I would not disagree that we should have a strategy for each but consider the segment or that type of customer that you acquire that always seems to give you the benefit of the doubt or refer business to you. Should you not be biased in how you allocate your resources to that segment? Would it not be beneficial to offer certain incentives to that segment? Is this not the measure that most determines the profitability of the customer? My first question to most new clients: Do you have customers that refer you, and why? That is the strongest indicator on the health of the brand.

A great book on the subject is The Ultimate Question by Fred Reichheld. The Net Promoter website is a great place to start. To calculate your company’s Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors.

When John Jantsch author of Duct Tape Marketing, talks about the Marketing Hourglass, he says, “The top half indeed resembles the funnel concept, but the expanding bottom half, to my way of thinking, adds the necessary focus on the total customer experience that ultimately leads to referrals and marketing momentum.”

Just considering these statements above you can see why I feel so strongly that you need to consider throughout the entire marketing process your ability to maintain and build that customer into a repeat/referral customer. The initial sale should be nothing more than allow your best advocates to experience the entire brand! If you have segmented your marketing channels into: Who you want as a customer (part 1) and Who wants you? (Part 2), the next logical step is, Who will repeat and refer?

Losing customers is the clearest possible sign that customers see a reduced stream of value from the company. It is simply the strongest indicator that a brand is in trouble, even if you are replacing the lost customers with new customers. New customers typically cost more to acquire having to go through, the entire hourglass and older customers are working in the bottom half of the hourglass. Since that is true, repeat customers tend to produce greater cash flow and profits than newer ones. Referral customers are also more profitable because they typically enter the hourglass not at the top but at a much lower stage.

Ask yourself, does retention and referrals matter? Put numbers to it. How much does it cost to obtain new customers, to retain old customers? Consider, do the repeat/referral customers have different purchasing patterns? What makes a repeat customer attract other customers?

How would you go about in gaining a repeat customer? I believe customers evaluate you based on three areas: Value for the price, Quality, Service. If you provide metrics that are very responsive to these areas and continuously educate to receive input from your customer base, you will go a long way in retaining clients. However, these measurement metrics must not be at the expense of your customers time and resources.

You should consider ways of making them a part of your operations, service, sales and marketing processes. As an example, you may notice less frequent contact or payments extending. Look at these as signs to engage your customer. Building quality measurement systems into your process may be the most important ingredient in your marketing hourglass.

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The Eagles always understood!

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Technorati : Buyer persona, Duct-Tape-Marketing, Net-promoter-Score, Referral, Repeat, Target Market

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.

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.

The next post will be steps 3 and 4.

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Technorati : Duct-Tape-Marketing, Lean, Marketing, TOC, Theory-of-Constraint

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.

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Using the Theory of Constraints in Marketing

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