Building mafia offers for smbs

4,227 views
4,177 views

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
4,227
On SlideShare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
83
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Building mafia offers for smbs

  1. 1. Mafia offers October 23, 2013 – Enterprise Lithuania Conference 1 © 2013 Science of Business, Inc
  2. 2. Why do we improve? 2 © 2013 Science of Business, Inc 2
  3. 3. Dr Lisa 3 © 2013 Science of Business, Inc
  4. 4. Why Improve? To create more LEVERAGE 6 week lead-time Sales 1.0 mm To Increase Sales -TVCs -.2 mm ================ T .8 mm With the SAME -OE -.5 mm ================ people and resources! P .3 mm 4 © 2013 Science of Business, Inc
  5. 5. Get More Jobs Done Faster and Sell to Capacity! 6 week lead-time Sales 1.0 mm -TVCs -.2 mm ================ T .8 mm -OE -.5 mm ================ P .3 mm 3 week lead-time Sales 2.0 mm -TVCs -.4 mm ================ T 1.6 mm -OE -.5 mm ================ P 1 .1 mm That’s a PROFIT increase of $800,000! 5 © 2013 Science of Business, Inc
  6. 6. Theory of Constraints Results 6 © 2013 Science of Business, Inc
  7. 7. Theory of Constraints Results 7 © 2013 Science of Business, Inc
  8. 8. What are the effects of your improvements if you.. 8 © 2013 Science of Business, Inc
  9. 9. Assessment – Market Constraint? • Do you have a market constraint? – If I could increase your sales tomorrow by 20% could you handle the increase while: • Being 100% on-time to your first commitment • Without going into firefighting mode and continuous chaos • And, at a competitive lead-time • If the answer is yes, you have a … 9 © 2013 Science of Business, Inc
  10. 10. Market or Sales Constraint • If you don’t have enough sales and could handle more and you have a good product/service, the problem could be any one of the following: – – – – – Your offer How you present your offer Your market Traffic / Enough Leads Conversion We MUST start with the offer! 10 © 2013 Science of Business, Inc
  11. 11. Why should I buy from you? 11 © 2013 Science of Business, Inc 11
  12. 12. Why buy from you? Pause the video and take 1 minute to have everyone discuss at their table. At the end of the minute collect some responses. 12 © 2013 Science of Business, Inc
  13. 13. The Generic List What Everyone Says • We have outstanding quality and it’s better than the competition. • We have a great reputation. • We get good results for our customers. • We have very knowledgeable, great employees with low turnover. • We’re very responsive. • We’re very innovative and can help with … • You can trust us. 13 © 2013 Science of Business, Inc
  14. 14. So why not just choose based on price? Or just delay the purchase? 14 © 2013 Science of Business, Inc 14
  15. 15. A Mafia Offer is where we start for a Market / Sales Constraint • “A mafia offer is an offer that is so good, that your customers can’t refuse it and your competition can't or won't offer the same.” Dr Lisa Lang • It is different from a competitive advantage, unique selling proposition, or a value proposition … 15 © 2013 Science of Business, Inc
  16. 16. Example In 2009 Hyundai, due to its Assurance Program (its Mafia Offer), is enjoying sales for the year that are up about 4.9 percent over the same period in 2008. That compared with about a 40 percent drop for car sales overall. • And this wasn’t even a great Mafia Offer because it was copied fairly quickly. 16 © 2013 Science of Business, Inc
  17. 17. Hyundai 2011 offer 17 © 2013 Science of Business, Inc
  18. 18. Example Rollover minutes by AT&T cellular • Was difficult to follow and still no competitor has matched since 2003 • But then they started to weasel: – …this plan has the usual gaggle of restrictions. – “Rollover Minutes is only on local calling plans, and you must sign up for at least 600 peak and 3,000 off-peak minutes for $39.99 per month with a $36 activation fee and a $150 termination fee. Long distance is included, but roaming costs 79 cents per minute.”* * These may or may not be AT&T current terms and conditions. 18 © 2013 Science of Business, Inc
  19. 19. Example The offer
  20. 20. A Mafia Offer is NOT / does NOT … • • • • • 20 based on an innovation require new products or new markets based on price a cutesy tag line a list of strengths, a cliché, subjective, or offered by the competition © 2013 Science of Business, Inc
  21. 21. Mafia Offer Development Guidelines • To develop a mafia offer you need to consider 3 things. – Your capabilities what they are and what they could be compared to the competition. – How your industries supplies your products/services. – The impact your industry’s capabilities and how you supply has on your customers. 21 © 2013 Science of Business, Inc
  22. 22. Mafia Offer Example • Custom Label Printer 1. Your capabilities what they are and what they could be compared to the competition. 2. How your industries supplies your products/services. 3. The impact your industry’s capabilities and how you supply has on your customers. 22 © 2013 Science of Business, Inc
  23. 23. Is it a Mafia Offer? • Is it un-refusable to the customer? • Can the competition match it? –What’s their lead-time? –What’s their DDP? 23 © 2011 Science of Business, Inc
  24. 24. What did it take? • Reducing lead-times from 2 weeks to 2 days while sales remained constant. • How was that possible? They implemented what you read in the book The Goal  www.VelocitySchedulingSystem.com for manufacturers  www.ProjectVelocitySystem.com for project based or service companies 24 © 2013 Science of Business, Inc
  25. 25. What else did it take? • They had to challenge how they fundamentally did business. – Why does the price/quantity curve exist? They had to rethink their costs and financials … 25 © 2013 Science of Business, Inc
  26. 26. So not only can’t the competition match the offer – they won’t. 26 © 2011 Science of Business, Inc 26 © 2013 Science of Business, Inc 26
  27. 27. The results? • The printer’s profits went from break even to 20% return on sales within 3 months. • Sales and profits have since doubled. • And profits are now 25% of sales. • In 2009, during the tough economy, they continued to grow but at a slightly slower rate. 27 © 2013 Science of Business, Inc
  28. 28. Mafia Offer Benefits • Increases sales – answers the question “Why should I buy from you?” • Guides the strategy and tactics for your entire company. • Forces operational improvement in order to deliver the offer. And gives you a reason to do it! • Or, helps you to sell the capacity you’ve uncovered through your improvements. 28 © 2013 Science of Business, Inc
  29. 29. Mafia Offers Benefits • Changes the culture. • Can recession-proof your company. • Can help you recover from a cash constraint. • The combination of operational improvements and the offer provide huge bottom-line results (LEVERAGE). 29 © 2013 Science of Business, Inc
  30. 30. Summary • If you don’t sell the capacity you’ve uncovered through your improvements – you’ve accomplished NOTHING! • Focus your improvements on creating a competitive advantage. • Make a Mafia Offer to sell your competitive advantage. 30 © 2013 Science of Business, Inc
  31. 31. More in on Mafia Offers? • Get Dr Lisa’s ebook from Chapter 22 of the Theory of Constraints Handbook, Mafia Offers: Dealing with a Market Constraint. • Available on Amazon or get the PDF version here: http://www.scienceofbusiness.com/by-drlisa-lang/mafia-offers-ebook/ 31 © 2013 Science of Business, Inc
  32. 32. Free TOC Newsletter • Signup at: http://www.scienceofbusiness.com/subscribe/ • Some of the topics covered: •How to FOCUS and Get more Projects or More Jobs DONE •Mafia Offers and the TOC approach to Marketing •TOC Pricing •TOC Measurements •Drum Buffer Rope Scheduling •The TOC Thinking Processes •TOC Leadership 32 © 2013 Science of Business, Inc •TOC Supply Chain and Replenishment •TOC Throughput Accounting •TOC Viable Vision and Strategy •Our approach to Quick Quoting using Theory of Constraints •Announcements about TOC events •And much more …
  33. 33. Results with a Mafia Offer: • “We have increased our sales by 50% within 9 months of going out with our offer.” Lane G., Owner • “We have increased our sales 80% and have been able to move the constraint from the market back into the operations.” Alessandro B., VP • “We landed a new $1 million account within 3 months of our Mafia Offer Boot Camp. Now that’s an offer!” Paul C., VP • “We are a current customer of Dr. Lisa and I must say that the mafia offer that she gave us literally saved my business and helped us grow sales almost 100% since we started (1 year).” Grady C., Owner • “In August ‘07 we had over a 7X increase in premium collet dollars in just 8 months after going out with our offer.” Richard P., Owner 33 © 2013 Science of Business, Inc
  34. 34. “Dr Lisa” Lang • • “Dr. Lisa” is a renown Theory of Constraints expert and is the foremost expert in the world for applying TOC to marketing. Dr. Lisa is regularly sought out for her expertise on developing market offers that increase sales. She has been named a “2012 Trendsetter” in the USA Today and a “Manufacturing Champion” in Newsweek for her Velocity Scheduling System program and her work helping highly custom job shops and machine shops to become more productive and more globally competitive. She has appeared in CNBC, CBS, The Wall Street Journal, and Yahoo Finance to name a few. As the President of Science of Business, she invented the Mafia Offer Boot Camp developing over 100 Mafia Offers for fortune 100 companies and other organizations around the globe. Dr. Lisa's Mafia Offers: Dealing with a Market Constraint chapter in the Theory of Constraints Handbook reached the #1 spot on the Amazon best seller list, as did Marketing Miracles a book co-written with marketing legend Dan Kennedy. Dr. Lisa worked with Dr Goldratt, serving as the Global Marketing Director for Goldratt Consulting. She has a PhD in Engineering and is a TOCICO certified expert. She is currently Chairman of the Board for the TOCICO Board of Directors. 34 © 2013 Science of Business, Inc

×