Archive for Marketing HourGlass
Turning your Marketing Cycle into a Kanban
Posted by: | CommentsOne of the first steps that I recommend in developing your Marketing Kanban is to create a Value Stream Map of your Sales or Marketing Cycle. Many people struggle with this concept and in a workshop I asked them to create their best known channel without really discussing their marketing tactics at all. I ask them just to define how many clients they need in this Value Stream to be successful. For illustration purposes I use a common internet model that is recognizable to most of us. A typical Value Stream may look something like this:
- Google Ad
- Website
- Auto-responder
- 30-day trial
- Purchase
- Upsell
- Buzz it up
Of course there are numerous ways someone may reach your website such as Referrals, Search, Social Media, PR, etc. You could include them all, but if you do not measure them individually it will be difficult to improve them as time goes on.
I am going to take just a section of the above Value stream and define an Entry and Exit point to the Kanban(see Bootstrapping the Kanban). The Entry point will be Google Ad and the exit point will be the Purchase point. This will simplify my explanation.
When we discussed the Marketing Kanban before, we discussed creating Work in Process (WIP) limits. The above diagram will demonstrate a very important beginning point for the use of a Marketing Kanban and how we go about determining the basic structure. Start developing your WIP limits by asking these questions:
- How many prospects do you engage with?
- How many become prospects?
- How many are qualified prospects?
- How many use the Free Trial?
- How many become clients?
- How many repeat?
- How many are referred?
I have already confused myself, have I confused you? This is where the Kanban becomes so effective.
This simple structure is easily adjusted and can be used for just about any channel you wish to develop. How do you determine these numbers? Well first, if you don’t already know any of these numbers or just starting out, look at what will be your constraint or control point. Where are you limited?
Maybe, you can only handle 30 clients? Start with something that you know or fill in the blanks with your best guestimate. If you can only complete three of the five examples, complete the others by considering the conversion rates that you have between each. Don’t overly worry about accuracy, especially if you have not measured these before. You can even create a best and worst scenario to the Value Stream.
Are you limited by the dollars you spend on Google ads? Take a known number and plug into your Kanban and just multiply it across. Can you see what happens? Is a client worth $500? Are you Google ads effective enough? Do you need to increase conversion rates thru your free trial?
This particular Marketing Kanban is just a starting point. You may not even use your clients as the basis, you may prefer total sales for the month. However, when you visually display it in a Kanban it does create a very easy observation point, especially for small business.
The next step is to consider the other entry points to your website, for example and/or completely different distribution paths. More than likely these other channels (paths) will have different cycle times and budgets. Do not try to fit one Kanban or Value Stream to everyone.
Related Posts:
Bootstrapping the Kanban
Value Stream Marketing eBook Released
Marketing Kanban 102, Work in Process
Value Stream 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.
Improve your Marketing Cycle, Increase your Revenue
Posted by: | CommentsThe very best thing about organizing and systemizing your marketing is that you now have more tools at your disposal to understand and facilitate not manipulate your customer’s efforts. I use the Duct Tape Marketing Hourglass as an example, but there are other similar methods and maybe a system of your own that would work as well. One of the tools, I found quite useful after working with the hourglass is the use of Cycle time. A Value Stream Map is quite useful in visualizing and providing calculations for cycle time.
Before I go into the explanation, the question should probably be: Who Cares? Throughput or decreasing your Marketing Cycle time can have very beneficial results. If you put customers through the cycle quicker it will more than likely increase revenue. If it takes 1 person 60 days in a normal cycle time, and you reduce it to 30, you should be able to double sales for any given period. It may also reduce expenses as there would be less people in the cycle at any given period. So increasing throughput is good.
If you look at the chart below, you will see the cycle time depicted in a value stream map. The blocks represent our value added marketing efforts. The empty spaces the non-value added time or waste. I am not going to be so naive and say that you can remove all that non-value added time and close a sale in 3 days. The point that I am delivering is that: you must learn how to mange the non-value time more effectively. Most companies deliver good presentations, advertise and get good PR. Where they fall short is handing the baton from one stage to the next. Non-activity turns marketing rotten. Even with good (refrigeration) techniques our leads may go stone cold.
Taking a look at the chart, the first thing you may notice is the time span differs for certain parts of the process. If you can make an effort to understand the customer’s process during this time, significant gains may be made. Your actual processing time is insignificant in marketing. It is the lead time between the processes that are important. Consider, for example, if we would increase the offer to transfer from the Trust stage to the Trial Stage. Or maybe, you have noticed that quicker conversions happen when they attend a webinar. What would happen if we paid them to come to the Webinar? You may find out segmenting your process halfway through the cycle would allow customers to better understand the results that they may gain from your product. Many of your features and benefits may be confusing certain prospects that don’t care for them anyway.
Total cycle time can be improved. It seldom can be done without more feedback loops in your system. Speed is important in the buying process. Develop process blitzes to reduce these non-value times. Go to Gemba or the customer’s place of work and find out what happens during this time. See what is stopping him from moving forward. It may be an internal constraint within their company. However, the constraint may be yours. Your responsiveness to the customers latest needs and the ability to focus your resources with enough but not too much material providing better clarity. He needs this to make a more rapid decision.
Create a vision of shorter cycle time, greater segmentation of your customers, it will enable you to do fewer actions in the cycle and much quicker. “It not the big that ate the small. It’s the fast that eat the slow” – Jason Jennings. Cycle times need to be addresses and improved. What methods are you using to accomplish this?
Related Blog Post:
Improve throughput, cut your customers in half!
Using the Theory of Constraints to improve your Marketing Hourglass
