Identify your Marketing Constraint
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Free PDF Download Evaluate your Customer Needs - By Joe Dager |
Below, I have outlined my basic understanding of the Theory of Constraints from my readings and experience. If you would like to dive deeper into this subject start with the AGI-Goldratt Institute website and there is whole slew of books, trained consultants(Jonas) available throughout the country. I believe the Theory of Constraints principles are a requisite for continuous improvement.
Before starting with the 5-steps, there are two prerequisites:
1.Identify the Goal of the System /Organization
2.Establish a way to measure the progress
The most common goal is to make money and that should be our overall purpose. It sometimes can be overlooked in increasing sales, client retention and many other factors. Many will argue but increase sales can hide many problems. The companies that fail the quickest in a recession are the ones that were living on growth without really generating income.
There are several ways to measure progress with the most common being Throughput, Operating Expenses and ROI. Going into too much detail about how to use the ratios is beyond the scope of this blog. The important thing to remember is that TOC methodology values Throughput and it as the best means to fuel growth. TOC then looks at Inventory(Prospects) second and operating expenses third. So our concentration will be optimizing the Throughput of the Marketing Hourglass utilizing the Five Steps of Continuous Improvement :
Step 1. Identify the system's constraint.
Step 2. Exploit the system's constraint.
Step 3. Subordinate everything else to the above decision.
Step 4. Elevate the system's constraint.
Step 5. If a constraint is broken (that is, relieved or improved), go back to Step 1. However, don't allow inertia to become a constraint.
Starting at the beginning:
Step 1. Identify the system's constraint.
The system's constraint is the phase or part of the phase that resource which limits the output of the entire system. Start following your actions and you may find out that your bottleneck is not just getting more prospects in the door. If you can monitor actual numbers, you may be amazed at what is happening to your prospects(inventory). This is where we need to identify the constraint , where is your constraint?
The easiest way in a manufacturing analysis is to walk around and see where the work is piled up. It is not that much different in a marketing process. Walk around and see if there is a pile of sale presentations waiting to go out. You may find people waiting on financing to be approved. Maybe, inconsistent delivery of Newsletters and so forth.
If you have done a good job of building your marketing hourglass, you may be surprised on how easy it is to find. You may be so lucky to be able to eliminate parts of a step, not the entire step. Start internally, as you gain internal control you will also gain the respect of your customers and vendors. This may help you significantly when you ask them to assist you in later improvement needs.
Our Next blog will continue with step 2 and 3.
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Free PDF Download Evaluate your Customer Needs - By Joe Dager |
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About the Author: Joe Dager RSS for Joe's articles - Visit Joe's website Joe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: LinkedIn Profile Follow me on Twitter Click here to visit Joe's website. Ways To Maximize Your Adsense Earnings Improve Your Adsense Earnings Machine Gun Marketing Working at Warp Speed in a Lean Turnaround There are other ways to expand your market than just the web |
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