Archive for Marketing
A Little Law applied in Lean Marketing
Posted by: | CommentsMost marketing systems are out of control. They just have not been managed with understanding the process speed and the effect of the flow on the process. Understanding some of the drivers of this process is much simpler than you might think. A simple equation called Little’s Law can tell us how long it will take any prospect to be turned into a sale simply by counting how many customers are in your funnel and how many sales we complete each day, week, etc.
Marketing Cycle Time = Customer in Process / Closed Sales
Little’s Law is a pretty cool tool and more important than it might seem. Many of us may not know what our average marketing cycle time is, let alone the variation of it. But knowing when someone enters your Marketing Funnel and when they exit it might seem immeasurable. The thought of having to track a prospect through all the stages in the process may seem rather daunting. However, with Little’s Law and segmentation of your individual channels, you can get a reasonable estimate of these factors. We only need two of these factors to get the third. It is just math! We need reliable estimates but if you look at segmentation closely and how Little’s Law applies you can go a long way in getting some very useful numbers. If you know your customers and the process and how many sales you are closing you can estimate your cycle time. If you know your cycle time and the number as sales you close, you can estimate the amount of customers in your process. 
These customers will be waiting between different stages or activities. It may be either internal or external reason but for this conversation it is not important. In lean, we consider this as someone’s queue time. This time in waiting (queue time) counts is a delay, no matter what the reason. As you begin to track your customer’s flow it soon becomes obvious that some of your activities from the eyes of your customers are of little value. A critical metric of waste for any process is what percentage of the total cycle time is spent in non-value added activities and how much of this is waste. The metric used is process cycle efficiency, which relates the amount of value added time to the total cycle time of the marketing process. Typically, marketing cycle efficiency of less than 10% indicates that the process has a lot of non-value added time or added wasted opportunity.
Marketing Cycle Efficiency = Value-added Time / Marketing Cycle Time
Waste is any time, cost, etc. that has no value in the eyes of your customer. All organizations have some waste. Lean shows us how to recognize waste and by utilizing these two simple and doable formulas. Don’t accept that Marketing is not measurable, it is!
Picture courtesy of Wild Hare Decor
Related Post:
Most Marketing Systems are Out of Control.
Use DMAIC for your A3 Report
Posted by: | CommentsThe definition of an A3 Report is a simple storyboard that tells the whole story of an improvement event on one 11×17 sheet of paper. The left side defines the problem, the right side proposes solutions. That is the basic structure. However, A3 is much more than that. It is the tool used by Toyota to implement the PDCA process. Understanding A3 thinking and you can apply this to problem solving, proposals and status reports. But you have to pick a template and you have to follow some outline in creating an A3 to get it off the ground.
Typically, when I create an A3, I go about it a little differently by utilizing the Six Sigma principles of DMAIC. This acronym stands for Define-Measure-Analyze-Improve-Control. The Six Sigma process improvement process(DMAIC) is closely related to the PDCA lean process. The difference is the set of tools being utilized. I believe DMAIC has a stronger set for variation and process control. The PDCA process has a more simplified version. Depending on your needs either tool applied appropriately can be utilized. Lean has a tendency to be favored initially because of the lack of measurements within most organizations and that process is a little more forgiving. The important part is that you start the process. The chart simplifies the DMAIC process:
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Define -What is important?
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Measure – How are we doing?
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Anaylyze – What is wrong?
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Improve – What needs to be done?
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Control – How do we guarantee performance?
Whether you decide to use DMAIC or PDCA for your A3 makes little difference. The tools are just that, tools. The important part is that you have flexibility to format your A3 report in any way that most effectively can tell and demonstrate your story to your team and others. Your goal is not to complete the A3 report, it is to harness all of the benefits through implementation from the problem solving that took place.
I use A3 Reporting in the marketing process. It demonstrates and recaps the thoughts, efforts and actions that took place for a particular campaign, such as advertising or public relations or even a launch. This report can really highlight the value that marketing supplies. I will be discussing DMAIC and A3 and how it applies to the foundation of the Lean Marketing House™ in the upcoming weeks.
Related Information:
Lean Six Sigma Templates for DMAIC and A3
Why do The Pillars of the Lean Marketing House™ crumble?
Lean Marketing House™ – Foundation
Why does The Pillars of the Lean Marketing House™ crumble?
Posted by: | CommentsIs it just poor planning? Maybe, you really did not believe in the system. Typically there are four barriers to implementation of most plans.
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Clarity, few people understand the strategies.
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People may not be directly linked or measured by the outcomes.
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Money, the entire process is not totally funded.
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Management looks for quick wins versus building a platform.
Most organizations build their pillars at the strategic business unit level, in the marketing departments within the business. However, they must include and receive buy in from customers, sales and other parts of the value chain to make it work. If it is pushed down it will seem like just another program. 
Once we have designed The Pillars of the Lean Marketing House™, we need to implement it throughout the entire organization. This requires careful planning and coordination with all parts of the organization. It is beyond the scope of this post to go into an entire Product Launch but we basically should know, how to organize, coordinate efforts and establish deliverables within the organization. Also, we should have knowledge of the time, availability of data and the resources needed. Another important aspect is the degree of support and funding both in time and money that management is willing to commit too.
When completed, The Pillars provide clarity, the budgetary requirements and a platform for management to buy into and support. However, it lacks the foundation needed for implementation and measurement that is required for successful deployment. We will need to integrate the Hourglass into lower level blocks or the Foundation of the Lean Marketing House™. The blocks provide the stability to the The Pillars of the Lean Marketing House™. They are made up of the tactics we will employ to move prospects from one stage to another. As we move the forward, a more formal collection and reporting system will emerge. Once we get more and more blocks working, we will begin to link the different segmented pillars together.
Building The Pillars of the Lean Marketing House™. often require continuous testing and modification to see if the process is working. This can be frustrating for many who routinely expect perfect solutions. Many times you are testing something that you never had applied or had measurements before. You will revisit your pillars, adjusting and re-aligning it to fit with the organization. It is not unusual to postpone the rollout of pillars until the first pillar is well established and working. The foundation of the Lean Marketing House™ will be explained in upcoming posts.
Related Information:
Lean Marketing House – Foundation
