where lean creates the foundation for effective marketing ... · where lean creates the foundation...

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Lean Sales & Marketing November 17 2016 Bill Waddell bill-waddell.com

Product Management and Channel Strategy

Where Lean Creates the Foundation for Effective Marketing & Sales


Let’s establish a couple of fundamentals:

Lean is all about the elimination of waste …

And waste is anything that doesn’t add value

in the eyes of the customers

Operation 1

Operation 2

Operation 4

Operation 3

Lean focuses on processes and improving them by eliminating the waste

TOTAL PRODUCT

COST

WASTE

VALUE

But the essence of the business is the creation and sale of its products The waste eliminated from processes has to translate into waste eliminated from the cost of the product

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SALES

HIGH VALUE PRODUCT

MARKETING

When the product offers high value to customers relative to the price …

Marketing is simple: merely tell the customer the facts about its superior value…

And sales come easily – merely take orders for great products from customers who know how great the product is.

And the whole business has the enjoyable task of running downhill !


SALES

HIGH VALUE PRODUCT

MARKETING

But when the product does not provide great value for the customers …

… Marketing has to get creative – smoke and mirrors – to describe anything other than the facts of the product…

… and sales are tough to come by with an inferior product and a confusing marketing message

And the business has the difficult challenge of always having to run uphill!

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HIGH VALUE PRODUCT

The Lean company is a product-centered company And the entire focus is on creating and providing products that create the

maximum value for customers

Design Processes Marketing Processes


The Lean company is a product-centered company And the entire focus is on creating and providing products that create the

maximum value for customers

HIGH VALUE PRODUCT

The Product Management function is the hub of the Lean organization

It directs and prioritizes product development

It is where the definition of customer value resides

It provides structure to and informs marketing

It is the source of product content and sales enablement

Effective Sales & Marketing are derived from strong, well structured Product Management

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The personas are the different end consumer profiles – in a Lean environment they represent

different consumer definitions of value

The channels are the different paths to the consumer

through which you sell


For instance, let’s say you make and sell snow shovels

The personas might include:

• Light users – people who will use the snow shovel very

little either because they have little area to keep clear or they live somewhere with little snowfall

• Heavy users – people who will use the snow shovel

often either because they have a large area to keep clear or they live somewhere with considerable snowfall

• Limited users – elderly or physically limited consumers

who have less strength or stamina than most consumers

• Commercial users – businesses that will buy the

product for use by their employees

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For instance, let’s say you make and sell snow shovels

The channels might include:

• General Big Box retailers – such as Walmart, Target,

etc…

• DIY retailers – such as The Home Depot, Lowes and

Menards

• Specialty retailers – including pharmacies such as

Walgreen and CVS; as well as hardware chains such as TrueValue

• Commercial distributors – such as Grainger, Matco

and Harbor Freight


Commercial

distributors

Specialty

retailers

Light users Heavy users Limited users Commercial users

General Big

Box retailers

DIY retailers

Market and Consumer Research needs to answer … What product aspects and features are most important to each persona? In which channel does each persona prefer to purchase?

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When we think of Marketing, we tend to think primarily about advertising, branding and other forms of outward communication

The Lean company views Marketing as much more focused on consumer and market research …. Inbound communication …. Listening and learning

This is how we can know better than the other guys … exactly who the personas are … and on what do they place most value


Commercial

distributors

Specialty

retailers

General Big

Box retailers

DIY retailers

When we think of Sales, we tend to think primarily about pitching products to customers

The Lean company views Sales as much more focused on knowing the channels – the keys to their business models and how to enable them to be successful

This is how we can maximize the value we create for both our channel partners and the end consumer

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When we know better than the other guys (1) how consumers define value, and (2) how to minimize waste for channels … we win every time !


Note: What we are doing here is a whole lot more customer centered than ‘Good – Better – Best’, which is actually very inward, cost focused thinking and grossly over-simplifies and under-estimates our end consumers

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A formal Product Management function is fairly common in B2C and B2B2C environments

It is less common to see Product Managers in the B2B world where the mistake is often made of thinking that Product Management is the same as Product Development


In fact the B2B environment often provides the greatest opportunities for creating value in broader ways … Financing Service packages Kitting & bundling Design support Inventory management This requires a broader business view than typically assigned to Product Development engineers

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So what does Product Management actually DO in a Lean company?

It owns this matrix !

Specifically, it owns each box within the matrix


With a keen understanding of how the customers

(personas) define value And a keen

understanding of how the channel partner’s business model works

and is optimized

And a keen understanding of how the competitors offer

value in each box

Product Management develops the plans to win in each box

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The ‘Plan to Win’ includes: Product features and specifications (both what the product should and should not have to

assure optimum value without including costs for capabilities the customer does not value)

Bundling and accessories

Packaging

Warranty, service, support

Finance and supply chain requirements

Anything else within the scope of the business that enables maximum customer value


SALES

HIGH VALUE PRODUCT

MARKETING

Product Management then provides the details to Marketing whose responsibility is to communicate the appropriate facts to channel partners and end consumers. Remember – Marketing is a non-value adding function This effort is simple and direct and at the least, yet effective expense Lean companies do not build Marketing empires

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SALES

HIGH VALUE PRODUCT

MARKETING

And Product Management then provides the details to Sales in the form of appropriate sales enablement … Fully detailed explanations of our offering relative to the competition Clear explanation of how the product and its fully developed business aspects create superior value for the channel partner


Marketing

Manufacturer

Customer

Describing the product - Advertising

Listening to the customer

– market research

The Leaner the company is, the

more they understand that listening to the customer and

continually honing their

understanding of how customers

define value is far more important than outbound communication and advertising

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Sales

Manufacturer

Manufacturer

Manufacturer

Big customers – Walmart,

GM

Small customers –

‘Mom & Pop’

ECommerce

Fact based

Relationship based

Content based

Lean companies recognize that different customer types require different Sales models – they define the value of their suppliers in different ways No ‘One Size Fits All’ Sales models

And the sales Enablement facilitated by

Product Management supports each unique Sales

model


HIGH VALUE PRODUCT

Design Processes Marketing Processes

The loop is closed when the Product Management output informs the input processes and they clearly understand what actually adds value for customers and what does not The Lean continuous improvement effort is driven by products and customers, rather than a theoretical definition of value adding

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Feel free to call or email with any questions, Or if I can assist in any way

Bill Waddell (815) 631-2280

[email protected] www.bill-waddell.com

where lean creates the foundation for effective marketing ... · where lean creates the foundation...

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