Archive for Marketing-Funnel
Value Stream Mapping process for Marketing – Using FIFO
Posted by: | CommentsI was doing a Value Stream Mapping project for a customer and as we were creating their marketing segments to create the map, we were having difficulty creating the typical Marketing Hourglass, (Marketing Funnel, Sales Pipeline) for this particular segment. We also wanterd to remove some prospects in the middle of a segment. Some of the reasons were: Large Volume Customer, Customization may be required, Needed quick answers, Willing to pay on value.
I remembered a section of in the Systems2win Value Stream Mapping training section about a FIFO lane. In seemed like the designation that I needed: First In, First Out was not far from how the prospects’ needs were described. In the Value Stream Mapping process a FIFO lane is used for the unusual stuff that often involves unique processing instructions. The problem with using it in marketing is that everyone could be a FIFO.
This is how we went about determining how to set up our FIFO prospects. We created certain signals in our other Value Streams to determine that this may be a FIFO customer. As information was gathered on demographics, psychographics and other criteria it would create signals for us. The signals were acted upon manually, much like a Kanban system would be. The information was transmitted for further investigation and qualification to be put into the FIFO Lane. One of the typical problems with a FIFO lane is that it acts like a chute and can only hold, a specific amount of prospects. You have only a certian amount of resources. We determined if the FIFO chute is full, you must prioritize and remove a prospect and put them back into another marketing segment.
Depending on how your FIFO lane is constructed, here are some examples of how to use your FIFO Lane:
1. This could be your “A” list or the one that marketing and/or sales people create personal contact with and nurture.
2. Special offers could be created that would result in longer or shorter trial efforts, payment terms and delivery. Since these people have been separated and are being handled by more seasoned professionals it does not create such a burden on the rest of the organization.
3. Sequencing into another marketing segment for certain steps so that the others that are managing the process can return the prospect to FIFO when completed.
4. Use it for resource leveling so that customers are never waiting on you. If other steps in the marketing process are backed up (a constraint) use the FIFO Team to manually relieve the bottleneck. (You may even discover new marketing opportunities this way.)
I think the FIFO lane can create novel solutions for your prosepct/customers and maximize the use of your personnel. A seldom used Lean tool that could be a critical component in your marketing management process.
A Little more on applying Little’s Law to Lean your Marketing!
Posted by: | CommentsIn a previous post, I transformed Little’s Law to marketing utilizing this formula: Marketing Cycle Time = Customers in Process / Closed Sales. I would like to simplify this formula and change the nomenclature a little. I think more accurately it should be called Sales and Marketing Process Time(SMPT) = Prospects in Process(PIP) / Customers(C). You could also use the same formula substituting Prospects for possible Revenue opportunity and Customers for Revenue.
However, if you put your Theory of Constraints hat on for a second, you would consider Revenue as the Throughput. Though this is not a major change in thinking, Throughput is the measure that drives Theory of Constraints. In your marketing process, this makes perfect sense, you should be measured in Sales Revenue, correct?
Reviewing some basic teachings of the Theory of Constraints, you may start looking at your marketing process a little differently. If you believe reducing your SMPT is important you simply have to reduce the number of Prospects in Process (PIP) if your Throughput(TH) or Customers(C) stays relatively constant. If you have large amounts of PIP it is a pretty simple task. However, the question maybe, what if you don’t have enough prospects in your pipeline?
You know your SMPT is a function of all of your process time. It represents all the stages of your Marketing Cycle both value added and non-value added time. So to reduce cycle time you must reduce value added, non-value added or a little of both. Since common sense dictates that non-value added time makes up for the majority of the time and if anything you would like to increase value added time, you must attack the non-value added part of the process.
We must accept the fact that there is waste in all processes, and we must work on a continuous basis to remove it. As we remove waste, another large culprit of efficiency is variability will be reduced. However, the other item that Little’s law demonstrates is the PIP in the process. As we evaluate this number think about the cost of having access PIP. Not having a targeted market, you may waste mailings, telephone calls and a few other inexpensive items, but I think about this on a much grander scale. Think how much you may be diluting your message. Can you afford to do that? You have heard me discuss how clarity may be the single most important reason that you lose prospects or sales. You cannot increase value-added time or decrease non-value added time without clarity.
How do you increase clarity to your prospects? Again, hopefully this does not sound like too much like a broken record but there are only two choices: reduce the number of prospects or segment your list or both.. Effective segmentation may be your single biggest constraint in improving sales. What do you think?
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Great Resource on the Theory of Constraints: Ebook on Integrating Theory of Constraints with Lean Six Sigma
5 Step Process to Lean Marketing
Posted by: | CommentsLean Marketing is a strategic methodology to streamline and automate the marketing processes in order to improve efficiencies through waste elimination. True lean companies strive to eliminate, not minimize all waste in the process. Most think of this as only a manufacturing or administrative function. This rule can apply when implementing lean marketing as well. In lean marketing a company should only have two components: An introduction to a new lead and the acceptance of an order. All other components would be considered wasteful and are candidates for elimination. That may be a little to pie in the sky but I do not believe that marketing should be off the hook from eliminating waste.
Here is a simple process to get started: The Five Step Process to Lean Marketing:
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Create a Value Stream Map based on your Marketing funnel.
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Analyze each process and start asking these questions until you have eliminated all waste from the process:
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Why are we doing this process?
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What value/purpose does it serve the customer?
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How can we eliminate all waste from this process?
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Map new simplified process
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Implement and Test new process using the Plan, Do, Check, Act cycle.
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Simplify the Marketing Funnel
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Eliminate all wasted activities that the customer sees little value in.
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Create dashboard with input/output measurements showing daily, weekly, monthly and yearly progress
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Implement Value Stream ROI and Resource Allocation
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Feedback develop visual metrics showing progress of the company’s lean continuous improvement program.
There has been very good books written on Lean Six Sigma Marketing but they deal primarily with channel management. I feel that a true lean approach is what is needed in Small Business Marketing. This basic structure will add clarity finding not only waste but deficiencies in creating new leads and orders in your marketing funnel.
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