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Archive for Marketing-Funnel

Apr

Changing the Shape of your Marketing funnel!

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These five terms form a hierarchy of value in which data have the least value and wisdom
has the most. I first ran across a similar description in the The Experience Economy an article published in 1998 by Joe Pine which I discussed in the blog post, Does your Value Proposition speak of the Customer Experience?. Though this chart has taken a fair amount of abuse over the years, I like it because it plainly depicts the hierarchy of what a customer is willing to pay for and therefore the customer’s perceived value.

In the book, Idealized Design the authors used a similar hierarchy for the key terms involved in describing organizational learning. They are as follows:

Data consist of symbols that represent the properties of objects and events. They have little value until they have been processed into information Data are to information as iron or is to iron. Little can be done with iron ore until it is processed into iron.
Information consists of data that has been processed to be useful. It is contained in descriptions, answers to question beginning with such words as what, who, when, when, and how many.
Knowledge is contained in instructions, answers to how-to questions.
Understanding is contained in explanations, answers to the why questions.
Wisdom is concerned with the value of outcomes, effectiveness, whereas the other four types of mental content are concerned with efficiency. Efficiency is concerned with doing things right; effectiveness is concerned with doing the right thing.

Sort of looks like a marketing funnel? The poor part of this is that your budget looks much the same way. You spend the vast majority of your marketing resources (time and money) on data or noise may be the more appropriate term. I tend to believe a larger investment spent in understanding and wisdom will reap great rewards.

It at first is counterintuitive. But when you think about it – an increase in knowledge, understanding about your customers and wisdom that your customers impart on you turns into:

Upsells
Referrals
Word of mouth,
PR Opportunities
Innovation

Just by the nature of the process, it should make you more effective and efficient. It goes back to the Pareto Principle or as Dr. Juran put it, “identify the vital few and the useful many,” in practice leave the top of the funnel (useful many) for automation, website sales, etc. Invest the majority of your resources (time and money) in the vital few. Work on delighting that segment of your business as Steven Deming, author of The Leader’s Guide to Radical Management writes Is Delighting your Customer Profitable?

One of the areas that we find out through better knowledge and understanding of our customers is the mistakes we are making as an organization. In the marketing sense, that blurriness of customer and marketing identification becomes much more apparent. The important critical to quality factors that are important to them and make them choose us drives our internal improvement efforts. Just as importantly, since we have a better relationship with the prospects/customers at the bottom of the funnel, we find out what mistakes and why others were chosen. This will help us tremendously to evaluate our shortcomings and improve on them.

Choosing this perspective will probably reduce the size of the opening of your funnel. However which end of the funnel is important to you?

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Mar

Marketing Knowledge Spiral

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When most think of a marketing funnel or Marketing with PDCA, they tend to think of a stage by stage progression. I contend that the successful processes operate in a more spiral like progression. You would start with an identified product/market and some type of interaction from a prospect to identify them at the entry point of a cycle. As we go around the PDCA circle, we improve our knowledge relationship with the customer to a point that they either continue down the funnel in quicker and tighter iterations. If the increase in knowledge and collaboration does not take place then momentum is lost and the customer/prospect drops out of the existing funnel. Repeated use of PDCA makes it possible to improve the quality of the communication, the methodology itself, and the results.

Once set in motion, this process should be an ongoing one, allowing constant interactions between the parties involved. In a learning arena, individuals expand their own knowledge through a "knowledge spiral" (Osterloh and Wubker. 1999). This process has the
specific intention of fostering a collective vision among the participants. This vision can assist the development of new solutions for problems in specific subject areas – in this case, the ways in which we deal with the problems are customers are facing and are ability to adjust lo new goals and objectives.

During the first stage (Plan) of the PDCA Cycle, the participants interact to appraise the customer needs and information on the subject is made available lo all participants, who add it to their own knowledge and experience, and alter this in the light of the new information. During the Do Cycle second stage, the "influence stage", participants make critical analysis of their own products/services in the light of the new knowledge they have acquired, This broadens their understanding of each others needs and abilities. The aim of this stage is to make individuals receptive to new ideas and action. This is maybe the most difficult stage because you have to be receptive to each others views and be willing to accept a fresh understanding to solve problems in a new way. The third stage (Check Stage) is the intimacy stage. An explanation or demonstration of participants’ new level of understanding is essential. The results that are produced actually can be used and adapted in for other situations. The fourth stage (Act) is the act of either continuing down the spiral to another iteration of tighter focus and a more intense cycle or deciding that moiré knowledge is required at this level. Many times it can be determined that at this time the proper fit for this particular value stream does not work for the participants.

Think of the Marketing Spiral as a continuous puzzle of interactions building through PDCA the knowledge of each other – customer/supplier.

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Mar

Kill the Sales and Marketing Funnel

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The Sales and Marketing Funnel is a theory that needs to be laid to rest. A linear approach to predict, plan, and proceed is a precarious way to advance. This approach prematurely foresees a solution for the customer without ever understanding their problem. And if you consider addressing the application of social media, it does nothing to support inbound marketing. As we work our way down the funnel, it is just as likely evidence will mount that the proposed solution is wrong. However, we have so much invested we attempt to sway the course of action in our favor. Linear planning will increase the risk for a customer to engage in an inappropriate course of action.

A more correct way of customer introduction is utilizing a problem solving cycle such as PDCA (Deming/Shewart – Plan/Do/Check/Act Cycle). PDCA should be repeatedly implemented in spirals of increasing knowledge of the customer’s situation and converge towards the correct solution. Each cycle will become closer to this goal than the previous. This approach is based on the belief that both our customer and our knowledge and skills may be limited at the beginning but continuously improving.

It is very common as a customer goes through a decision making process that their minds will change. At the start of a project, key information may not be known. The PDCA provides feedback to justify our hypotheses and increase our knowledge. This allows both the customer and us not to be perfect the first time. It allows us flexibility in our course of action and with improved knowledge, we (also meaning the customer) may choose to refine or alter the needs. The rate of change or the speed of the improvement is a key competitive factor in today’s world. PDCA allows for major jumps in performance not through massive breakthroughs but through frequent small improvements.

Another approach recently popularized is the OODA Loop introduced by Colonel John Boyd that describe how combatants observe a situation, orient themselves, decide what to do, and act, before observing the changed situation and moving through the entire loop again. Viewing combat as a series of successive loops underscores the importance of reassessment and readjustment as circumstances change, and the cumulative benefits of many small wins in successive iterations. Boyd’s OODA loop is a vivid example of an iterative loop to guide action under uncertainty and much can be learned from its study.

I am not advocating thinking of your customer in the sense of a combatant as the OODA Loop suggest. However, the strength in the OODA loop is the series of successive loops and small wins that is introduced. Few homeruns are in the market place today. It is more of a singles and doubles game. In fact, few of us can afford the strikeouts and must maintain a high enough batting average to survive.

PDCA is the fundamental concept behind Lean thinking. It is not just a problem solving method but a holistic approach to knowledge creation and improvement within an organization. Establishing a PDCA culture within your company will enable you to embrace this way of thinking with your customers and prospects. It will develop an outside-in approach to your organization that will allow you to really understand your role with customers and in the markets they participate in.

Seldom do you find a competitive advantage or a real break through in a service or product. If you do, it is only short-lived and commoditized rather quickly. The leverage it brings is an influx of innovative customers that are willing to be risk takers, the early adaptors. People that you can learn from and develop new knowledge and new products. PDCA allows for them to enter your cycle of learning easily and allows you to maximize that new knowledge.

The only competitive advantage that you have is in how quickly you develop new knowledge. Maximizing that through the use of PDCA is essential for your business survival.

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