The Pillars of the
Lean Marketing House:
The Marketing Hourglass
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Joe Dager, Business901
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The Pillars of the Lean Marketing House:
The Marketing Hourglass
Table of Contents:
1. Duct Tape Marketing
2. Lean Marketing House
3. The Pillars
4. Segmentation
5. Extending the use
6. Customer Centric Budget
7. Lean Marketing
8. The Forgotten Pillar
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The Pillars of the Lean Marketing House: The Marketing Hourglass
1. Duct Tape Marketing
As many readers know, I am a Duct Tape Marketing Coach and even before that adhered
to the Duct Tape Marketing principles. John Jantsch is the author of "Duct Tape
Marketing - The World's Most Practical Small Business Marketing Guide“ and
the creator of the Duct Tape Marketing small business marketing system which includes
the foundation of the Marketing Hourglass that I reference and expand on in this chapter.
John has always described Marketing as getting someone with a need to know, like and
trust you. He has expanded that in his widely acclaimed blog to The 7 Stages and logical
touch points along this customer referral life cycle to look something like this.
Know – Your ads, article, and referred leads
Like – Your web site, reception, and email newsletter
Trust – Your marketing kit, white papers, and sales presentations
Trial – Webinars, evaluations, and nurturing activities
Core – Fulfillment, new customer kit, delivery, and financial arrangements
Repeat – Post customer survey, cross sell presentations, and quarterly events
Refer – Results reviews, partner introductions, peer 2 peer webinars, and
community building
He also suggest creating a diagram consisting of the stages above and mapping out
every touch point you have. As I did this, I found it to be not only a great exercise with
my clients but such an integral part of the process that it became a cornerstone in
implementing a marketing system.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
2.The Lean Marketing House:
When building a house you follow the same steps and principles as building a Lean
Organization. The first step is knowing what you need to support. The starting point is
defining the Marketing vision first, which will define all the rest of the structure. Very much
like the roof of a house. You have to know what you are going to support before building the
rest of the structure.
Secondly, I use the Lean diagram to determine the customer’s need and the philosophy we
need to develop the plan, through the use of Marketing Plan Pro that is depicted directly
below the Lean Flow diagram. This helps us build the plan for each market segment which is
depicted by the 7 pillars. It does not matter how many pillars you have, just that each
marketing channel(ideal client and target market) is well defined.
The Lean House’s foundation that the pillars stand on is the work we do each day and it is
what insures the marketing vision is implemented. In accordance to Lean house philosophy, it
doesn’t necessarily matter which tools the organizations uses but which tools are effective
with the customer or the particular customer segment, represented by the pillars. The
number of blocks and the depth will differ with each organization but what is important is
that they are all considered and that the foundation is strong enough to support the pillars.
Below the foundation is a substructure of Six Sigma that will be the measurement practice
that is implemented through out the foundation. This allows us constant feedback and will
heighten our awareness that a weakness of measurement is what will allow the foundation to
start crumbling.
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Marketing Vision
Map Current State Lean Metrics Value Stream Map Future State Kaizen
Remarkable Product Service
Ideal Customer Target Market Critical Numbers Gap Dashboard Lead Generation Lead Conversion Service Experience
Story Innovation
Company Internal Company
Presentations Proposals Graphics Trademarking Sales plan Mailers Sales training
logos promotions brochure
Product Content
White papers Datasheets Pricing Web presence Getting Found Website Ezine Social Media
brochures Strategy
Media Advertising Referral
Blogging Press release Crisis manage Event plan Trade shows Launch events Speaking
Relations plan Strategies
Define Measure Explore Develop Implement
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The Pillars of the Lean Marketing House: The Marketing Hourglass
3. The Pillars
Above the foundation of the Lean House are the pillars. In a typical Lean House
these pillars represent JIT, Jidoka(Quality) and Motivated People. This is from the
Toyota Production System, and they are actually in a certain order. Typically, the
middle pillar is described as the most important pillar, and it is the one of
motivated people.
In the Lean Marketing House, I use the Duct Tape Marketing Hourglass description
as the pillars. The purpose of the Hourglass is that it is the actual conduit or
vehicle we use to apply our foundation blocks. We decide on how we are going to
use each of them to achieve the best results with our customers. For example, we
may use social media to enable people to get to know us and our website to gain
more acceptance. We can have free trial offers to build trust, low-cost seminars
for trial and so on. All of our foundation blocks are applied through these pillars
only when a customer wants and needs them. The true concept of Lean Marketing.
The number of pillars represents the different sales/marketing channels that we
create. Segmenting our customer database into as small as a group will always
make marketing more effective. Consider a toothpick laying on its side and the
strength that it has. Of course, it is very weak, but so will your marketing, when
you are trying to be everything to everybody. Literally, your sales will be flat and
the cost of marketing will be astronomically. However, if you stand the pillars' up
in the air, segment your customers using multiple channels your marketing
becomes more effective. If you can magically make your actions flow upward, the
Leaner your marketing gets. I envision your customer sucking on a straw pulling
your marketing efforts up through the glass rather than you pushing it through.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
3. The Pillars
This is a simplified version of how a hourglass would look. As you can see the natural
progression of the flow (know, like, trust… flow to the right), the enablers or information to
move the process forward is provided above each step. Taking a group of current
customers, you can identify this in your current process. If this seems difficult, make a
certain group that you can segment and document the process. Many companies will find
huge gaps in their processes, which are supported by other departments such as sales or
service or maybe by repetitive marketing.
Know Like Trust Try Buy Repeat Refer
Articles Web Site White Paper Webinar Financing Add-on Peer2Peer
Ads Newsletter Presentation Sample Service Survey Ref. Pack.
Search Speaking Seminar Free Trial Terms Updates Incentives
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The Pillars of the Lean Marketing House: The Marketing Hourglass
3. The Pillars
One purpose of the hourglass is to provide clarity to an individual or organizations
marketing process. This gives you the ability to walk a prospect through the process,
understanding where they are at in the process. Typically, I have a customer add the
activities that he uses in each stage of the hourglass. Don’t look at this as just a simple
exercise for a small organization. I use this in larger organizations by just repeating this
process for each sales channel they may have. The secret to this is that you really forces
you to layout your marketing process and is really the beginning of development of your
marketing process.
The purpose in creating your
hourglass is to achieve better
cooperation of the multiple
phases. Each interlinking phase
depends upon the other links. In
each of them, you will have
different capabilities, normal
variation and a changing workload
making it practically impossible to
balance. Using the TOC(Theory of
Constraints) we will find one
phase of the hourglass more
limited than another.
Since we have determined that the whole hourglass is dependent upon the cooperation
of all phases, the weakest link determines the strength of the chain.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
4. Segmentation
How do you look at your marketing? Do you know
where your leads come from? How are you
processing leads to make them successful? Many
organizations do not look at their sales
and marketing process in a linear fashion, let alone
segmenting it. When organizations first map out the
process, they look at connections where people
come from being all over the map such as the
diagram to the right. They look at a simple chain as
an oversimplification of reality.
Not everybody goes through each step of the cycle. Some will skip from step one to step
three. Someone may enter the cycle in step three. These interconnections are not trivial, it
is what makes your process work and it also may be stopping it from working. So what is
the purpose? The purpose of creating the marketing hourglass is very simple: Which is
harder to manage, the above diagram or the next one?
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The Pillars of the Lean Marketing House: The Marketing Hourglass
4. Segmentation
Your flow system, The Marketing Hourglass, structure will allow an organization to operate
at maximum efficiency. The secret in creating such a linear flow is segmentation. Without
it, you will continue to operate in less than an optimum manner. You will never be able to
find your constraint, because it will be moving around, practically with every single
opportunity.
Different opportunities, normal variation and changing workforce make it just about
impossible to balance everything. There is a weakest link; there is one element in your
system more limiting than another. Why is it so important to find that? Without working on
your greatest constraint much of your work will be wasted and non-productive. Take a look
at the diagram above and see how proper segmentation may alter your perception of the
marketing hourglass. As you can see, not all steps may be needed for each and every
channel. An excellent example is someone that has been referred to you. With the proper
referral program in place, you will know exactly what step in the process that person
should enter.
Keep segmenting your list, till you gain a linear flow. Yes, there may be a few exceptions.
However, I think it might be interesting to scrutinize those exceptions. Are these
exceptions really your target market or ideal client? I think you might find out that they
are something less than ideal clients. Whatever you do, don’t ignore the exceptions; they
may prove valuable insights to your marketing process. That thought may lead to another
discussion.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
5. Extending the Use
Setting up your Marketing Hourglass: Another way of using the hourglass is to
determine the number of prospects(inventory) that you need in each part of your
hourglass. This is a tremendous opportunity to really understand what is taking place in
your process and will enable you to determine what is and what is not working. Where is
your bottleneck or if you have ever read The Goal, where is your Herbie?
In your process do you understand your conversion rates? Are you converting 50% of
your prospects from the Try phase to the Buy phase? You may not know each of these,
but if you know several of them, you will have the ability to interpolate some of the
others.
The ability to create this chart will allow
you to significantly increase your sales
result. Have you ever considered where
your constraints were in your
marketing? Many people spend the
majority of the time, money and even
skill in developing new leads. They may
be just piling prospects(inventory) in
front of a constraint. Going through this
exercise may significantly increase your
awareness on what is your limiting
factor.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
5. Extending the Use
An obvious example, is we know that a referral is our best form of creating
business. Duct Tape Marketing emphasizes referrals and in fact, John Jantsch, author
of DTM, next book is based on building a Referral Marketing System. I mention this,
because, I believe your marketing is incomplete without a formal Referral Marketing
system in place and by the way, I offer such a package. Seldom do I see the true cost of
what it means to gain a referral. I think the chart below, demonstrates quite vividly
what it means in the overall marketing flow. If you get a repeat buyer or a referral, you
would drop them into one of the phases above. Notice, how it significantly it could
change your marketing efforts. Consider the dollars and time you spend in the top of the
hourglass. How productive would your efforts be in using the same amount of time and
effort in the bottom of the hourglass?
We realize that referral efforts are
probably short changed in most
marketing practices. But that may or
may not be your limiting factor. Every
System typically has relatively few
constraints. However, to operate at
maximum efficiency, the limiting
constraint must be identified. The Five
Steps of Continuous Improvement
from the Theory of Constraints
methodology help identify and
improve the constraint. That is the
next stage and next blog.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
6. Customer Centric Budget
How do you decide on your marketing budget?
1. Set preliminary budget based on tasks decided upon.
2. Estimate competitors’ budget and adjust accordingly.
3. Prepare budget document with rationale of expenses.
4. Use percentage of Sales
The most common method is using percentage of sales. However, what happens if sales
go down? The problem you are trying to correct already has less money to begin with.
However, it is used time and time again. When using that method, I think many look
simply at the industry norm, which is a certain percentage. Take that percentage times
your annual revenue. For example:
Annual sales = $1,000,000
Marketing % = 7%
Annual Exp = $70,000
Monthly Exp = $5,800
After that simply take that number and split it up between, what we call the Lead
Generation trio: Advertising, PR and Referrals. Even that is probably not that true,
because we seldom count referral and PR into our budget. I typically see a calendar with
the major promotions scheduled out for about 90 to 180 days and the next 30 to 60 days
completed with the smaller promotions. There will be a mix of radio, print, TV, direct mail,
displays, etc., most directed at gaining new customers. In recent years, there have been
better efforts at extending into our existing customers and tailoring efforts in maintaining
them. Further steps have been made towards specific referrals programs developed. They
have proven to be highly successful. I would like to take you a step further.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
6. Customer Centric Budget
But what if you took your budget and
developed around this pillar. Take your
marketing dollars and define what you are
willing to spend to get a customer to know
you, like you, trust you, etc. The easiest
way to start is to use your past six months.
I think it might be quite alarming to see
where the money has been spent.
Do you think the same marketing dollars
should be spent on getting to know a
customer instead of trying to get someone
to repeat or refer? Once, you capture a
person, learn how many dollars are being
spent trying to get them to like and trust
you. Or do you leave it to chance?
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The Pillars of the Lean Marketing House: The Marketing Hourglass
7. Lean Marketing
Can you measure the value you add? How can you be more effective? How do you
determine the value? A relatively easy exercise is to start with a value stream map.
Provide a graphical representation of the process flow, and then above it map the
information flow that enables the process to occur. This will allow you to understand not
only the activity of the service or product but also the flow of information or material as
it makes its way through the value stream. The value stream map is a lean tool.
In the book Lean Thinking, James P. Womack and Daniel T. Jones defined value stream
mapping as: “Identification of all the specific activities occurring in a value stream for a
product or product family.” It is typically used in Lean as it differs from the process
mapping procedure of Six Sigma in several ways:
•Higher level than many process maps
•Has a wider range of information.
•Identifies future projects, subprojects, and/or kaizen events
How do I use this in marketing? I simply take the Duct Tape Marketing Hourglass, or as I
call it one of the Pillars in the Lean Marketing House and assign the processes to enable
the flow. As you can see the natural progression of the flow (know, like, trust… flow to
the right), the enablers or information to move the process forward is provided above
each step. Taking a group of current customers, you can identify this in your current
process. If this seems too difficult, make a certain group that you can segment somehow
and document the process. Many companies will find huge gaps in their processes which
are supported by other departments such as sales or service or maybe by repetitive
marketing. Hmm! Sounds like an opportunity to find some waste or Muda!
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The Pillars of the Lean Marketing House: The Marketing Hourglass
7. Lean Marketing
Lean Marketing is a strategic methodology to streamline and automate the marketing
processes in order to improve efficiencies through waste elimination. True lean
companies strive to eliminate, not minimize all waste in the process. Most think of this as
only a manufacturing or administrative function. This rule can apply when implementing
lean marketing as well. In lean marketing a company should only have two components:
An introduction to a new lead and the acceptance of an order. All other components
would be considered wasteful and are candidates for elimination. That may be a little to
pie in the sky but I do not believe that marketing should not be off the hook from
eliminating waste.
Here is a simple process to get started: The Six Step Process to Lean Marketing: I
adhere to the Duct Tape Marketing System as a baseline for my Lean Marketing
efforts and the implementation of the Marketing Hourglass as the most important aspect
of it. How do you handle the critical elements of the Know, Like, Trust, Trial, Buy, Repeat,
Refer stream and reduce waste in a lean flow?
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The Pillars of the Lean Marketing House: The Marketing Hourglass
7. Lean Marketing
1. Create a Value Stream Map based on the Marketing Hour-Glass.
2. Analyze each process and start asking these questions until you have
eliminated all waste from the process:
1. Why are we doing this process?
2. What value/purpose does it serve the customer?
3. How can we eliminate all waste from this process?
4. Map new simplified process
3. Implement and Test new process using the Plan, Do, Check, Act cycle.
4. Simplify the Marketing Hour-Glass
1. Eliminate all wasted activities that the customer sees little value in.
2. Create dashboard with input/output measurements showing daily,
weekly, monthly and yearly progress
5. Implement Value Stream ROI and Resource Allocation
6. Feedback develop visual metrics showing progress of the company’s lean
continuous improvement program.
There has been very good books written on Lean Six Sigma Marketing but they
deal primarily with channel management. I feel that a true lean approach is
what is needed in Small Business Marketing. This basic structure will add clarity
finding not only waste but deficiencies in creating new leads and orders in your
marketing hour-glass.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
8. The Ultimate Marketing System: The Forgotten Pillar
You have read my explanations of the Lean Marketing House and
how your Marketing Channels determine your number of pillars
and the size of each. You can suffice with just one pillar if it is big
enough and strong enough to hold up the roof but don’t forget
what I will now call the Forgotten Pillar. Continuous Learning in
the Lean Marketing House means the Ultimate Marketing
System. This is a term coined by Duct Tape Marketing and
actually includes their workbook and CD’s explaining their
system. Most marketing plans and systems fail if adequate
training is not provided.
Lean Six Sigma Practitioners always realize that the training is
what makes the processes work. Without, old habits stay the
same and new habits are never developed. Nor are these new
habits expanded to the greatest extent. It happens in marketing
too. Marketing that works today is all about authenticity,
customer touch points and the connection of those touch points.
You have to be everywhere, but you also have to be you. Perfect
marketing is less important because people really are seeking
you. Even from an organization viewpoint, they are expecting a
human and personal experience.
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The Pillars of the Lean Marketing House: The Marketing Hourglass
8. The Ultimate Marketing System : The Forgotten Pillar
How do you go about creating this new wave of
marketing in your organization? My advice is
that you have to create a continuous learning
cycle within your company. This is best done by
starting out with a learning system, a
structured program and a Marketing coach. This
is self-serving to say the least, but it is what I
truly believe.
I use the Duct Tape Marketing System as the
learning system and the structured program to
get someone started. I am not going to go
through the entire program, you can do that
here, but it will set you on the road to success
and provide a foundation for you to build from.
Without going through these necessary steps,
you will never fully defined your marketing
needs and just continue to respond to the
marketing idea of the week. I cannot tell you
how many phone calls I get weekly a call from
an Ad Rep telling me about the next greatest
deal. Please take note: It’s not about the
money, it’s about the target!
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The Pillars of the Lean Marketing House: The Marketing Hourglass
8. The Ultimate Marketing System : The Forgotten Pillar
Now, the coach is pretty important. I am not going to talk
about that even Tiger Woods has a coach, you to keep you
on track, hold you accountable and all that garbage. I am
going to discuss about someone that has been there done
that in the real world. I am also going to mention another
cliché: Talk the talk and walk the walk.
I can only talk for myself, but I walk my system. I believe in
the Duct Tape Marketing philosophies. I practice them. If
you think that is not true, just look at my Tag cloud on the
left. Look at my Alexa score, Hubspot rating and Twitter
feeds. They are better than the vast majority of corporations
and certainly better than 99.5% of other coaches and
consultants. Why is that? I simply follow the practices that
John Jantsch of Duct Tape Marketing has taught me.
Have I added a few tricks of my own? Certainly –
Authenticity, Personalization, Differentiation and building
your Core Message is what I have learned in my Continuous
Learning cycle. What can you gain from that experience? You
will simply short-circuit your learning curve by having a
coach on board!
Do you have Continuous Learning going on in your Marketing?
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Joseph T. Dager
Lean Six Sigma Black Belt
Duct Tape Marketing Coach
Ph: 260-438-0411 Fax: 260-818-2022
Email: jtdager@business901.com
Web/Blog: http://www.business901.com
Twitter: @business901
Increase Throughput – (Decrease) Expenses = Increase Revenue
If you would like to take that leap, sign up on
my Members only page and after completing
a brief survey, you will have access to my
calendar to schedule a free 30-minute
assessment on your Marketing Hourglass.
Act Now!
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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.
Joe Dager is President of Business901, a progressive company providing direction in areas
such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean
Six Sigma Black Belt and a certified coach of the Duct Tape Marketing organization,
Business901 provides and implements marketing, project and performance planning
methodologies in small businesses. The simplicity of a single flexible model will create
clarity for your staff and as a result better execution. My goal is to allow you spend your
time on the need versus the plan.
An example of how we may work: Business901 could start with a consulting style
utilizing an individual from your organization or a virtual assistance that is well versed in
our principles. We have capabilities to plug virtually any marketing function into your
process immediately. As proficiencies develop, Business901 moves into a coach’s role
supporting the process as needed. The goal of implementing a system is that the processes
will become a habit and not an event. Part of your marketing strategy is to learn and
implement these tools.
Still need to learn more:
Follow me on Twitter: @business901
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