Archive for Value Stream
Unclear Customer Value equals Failure
Posted by: | CommentsAll of us know we must distinguish ourselves in the marketplace to be successful. However, do we go to the marketplace to find that unique dimension of matched value is? In fact, there’s been study after study showing that we don’t even get out of our own organization with an understanding of our own unique value proposition.
When organizations were dominated by one single individual your value proposition was very clear. Different views and questions were discouraged. Now in the age of collaboration, it is becoming more and more difficult to arrive at a clear understanding of the value that you provide your customer. 
One of the classic marketing books, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market
- What are the dimensions of value that customers care about?
- For each dimension of value, what proportion of customers focus on it as their primary or dominate decision criterion?
- Which competitors provide the best value in each of these value dimensions?
- How do we measure up against her competition on each dimension that I?
- Why do we fall short of the value leaders in each dimension of value?
The authors go on to say; Value stems from the product – from unique features that deliver superior results – and from the kinds of service benefits provided . They are measured against customers expectations, so products and services really offer benefits only if they substantially exceed competitors offerings. Competitive parity, after all, creates a base level for customer expectations.”
These 5 questions are just a starting point. Your value proposition must continue to increase at a more rapid rate that your competitors. However, you cannot sustain your customer value proposition without being part of your customers business. Everyone in your company must walk in the shoes of your customer. Experience what they experience. If you do that, your head might just rise above the clouds that your organization has been in and start living the value experience. Remember, Customer Value is the best leading indicator of Future Market share!
Related Program: 5Cs of Driving Market Share
Related Posts:
Linking the 4Ps to Lean Marketing
Best in Market eBook
Value Stream Marketing and the Indirect Marketing Concept
Marketing Kanban: Marketing Kanban
Value Stream Mapping
Lean Six Sigma:
Internal Marketing Constraint is Important
Posted by: | CommentsFinding your internal marketing constraint is still important. Most people consider that their constraint in marketing is the number of prospects and in today’s economy it is very true. I believe that places an even great emphasis on managing your Work in Process or prospects. It does little good to increase prospects if you are not effectively handling them internally. Think about, if you are doing a poor job of following up, do you need to do a poor job of following up with more prospects. In fact, it will just get worse and your conversion factors may decrease from 10% to 5%. What would that mean? It would mean doubling your prospects would only maintain the same revenue. I could also argue that it may even do worse than that because expenses and discounts may increase.
As a result, why start with increasing prospects? This short video is an overview on how to use a Marketing Kanban to find your internal marketing constraint.
Getting a handle on your FLOW is important.
Related Posts:
Updated the Lean Marketing House
Don’t Market Without Your Kanban
Value Stream Marketing – Reduce your Work in Process
Good Marketing should minimize your Pipeline
The Guiding Principles of Value Stream Marketing
Compress your Value Stream for Unprofitable Customers
Posted by: | CommentsA while ago it seemed like all customers were profitable. Sure we had a bad apple or two but most of the time we sold a product, customers bought it and as a result we made money. In today’s environment it is very different. I would venture to say many of your customers are not profitable. When you start looking at true costs you probably will find that you are actually losing money to double or triple the percentage that you would first think.
The pricing pressures we have faced in the last year or two has even added to the number of non-profitable customers. The rapid commodity of your product and increased Internet purchases are two more examples that has accelerated the decline of profit margins. I can use the analogy of a stream full of rocks (customers) and as the water is lowered more rocks start appearing. These unprofitable customers are appearing daily. However, in these economic times even a bad customer is valued because they seemed to help support your fixed cost. This puts additional pressure on your profitable customers and at a risk that you could hardly afford to continue. If you do, you may start losing the profitable ones.
Most advisors will tell you replace or remove these unprofitable customers. It is sound and prudent strategy, but who is going to give up a customer in these economic times? I certainly would not.
My strategy is to first; rate your customers by profitability. That can be a rather eye-opening experience. It may not only tell you who to value but also what they value about your organization. This of course is the marketing segment that you want to spend your efforts and more than likely your money on developing and maintaining.
Secondly, I encourage you to build your marketing value stream segmenting customers by profitability levels. You may end up with several swim lanes but try to put the marketing flow, your value stream in for each segment.
Thirdly, segmenting these customers will allow you to better see what they don’t value. You may see something they are not utilizing such as training, engineering support, etc. Not all people or organizations value the same thing. To build the unprofitable customer segment into a profitable stream may only take the removal of certain items, streamlining your offering. Other features may have developed into your product that became normal and just easier to include all the time. Strip these out and offer a lower cost model. I am not necessarily thinking about just the end product or service but also the overhead associated in operations, sales, and marketing.
Compressing this value stream may even create additional opportunities. Customers left to their own imagination on how to utilize a simple product that they understand create some of the best product innovation. You will even get better at distinguishing your customer’s preferences and anticipating their needs. Customers are moving to what I would call marketing singularity. Having marketing segments as small as one person may not be that far in the future. The key will be taking these simpler segments and still maintain profitability rather than just passing them on to your competitor.
