Theory of Constraints – and product management – Part 2

B2B, constraints, ideal customer, Marketing, Product Management

In yesterday’s post I spoke why I like the Theory of Constraints and how it can help in identifying the possible reasons, why the product or service is not taking off in the market as desired.

The key advantage is gained when you speak the logical steps and while speaking you realise that there’s a gap in the logic. As a example if you have a product or service in the B2B space. In B2B the process generally involves giving presentations, giving proposals, then negotiations etc.

Now lets take an example. If I need to have 18 proposals in the “market” in by 31st March, because only when you have proposals, can you get orders. While mathematically it is a simple equation that for 30 proposals you need to connect to 900 contacts ( I have used a multiplier of 50, which could vary from industry to industry) and then go through the process. Most people follow this method and then try to do carpet bombing with very little success.

On the other hand if we were to follow the logical process that is defined by the Theory of Constraints then the logic could look like this

If I have a clearly defined Ideal Customer profile

AND

If I have a set of 250 unique accounts confirming to my ICP to whom I can send an email

AND

If I have correct email ids of the relevant person in these 250 companies

AND

If I can send 50 emails to these companies everyday

AND

If 10 people respond back

AND

If I can show my presentation to 2 people every day or 10 people in a week

AND

If 3 people out of the 10 in a week like my solution to their problem

AND

If out of the 12 people in a month, 3 ask me for our proposal

THEN

In 6 months I will have 18 proposals in the market

Now if you will speak through the above sequence of logical statements, you will realise the flawed & undefined assumptions, in the argument. One item which is not included is the fact that the customer should have a budget, the statements don’t include the amount of followups that will be needed, what is the assumption behind 10 people responding back, etc. So just connecting to 900 contacts will not help you hit your target

Once you get that data then you can actually analyse whether your target is doable and what is the first thing that you need to hit at to open the “lock” in your constraint. You can also look at it in a different fashion to see for a given target, what all you will need to put in place to achieve it

Try this method and let me know your feedback.

Till next time then.

Carpe Diem!!!

Theory of Constraints – and product management

Assumptions, constraints, Marketing, Product Management

Eli Goldiratt in the 1960s formulated this the Theory of Constraints and over the next 30-40 years he went about figuring out the solutions in various manufacturing companies. They had a lot of consultants world wide, some of whom directly still utilise the framework given by this theory or have modified it with changing times.

Goldiratt during his lifetime had written a few books out of which Goal and Goal II are so well written, with the story so tightly woven, that you don’t realise that you are reading a book which is about serious business.

Like with any theory there are proponents and then there are some who don’t realise the value and identify flaws – like in the real world there could be more than one constraint acting in parallel. These could be true.

However , I have found the theory very logical, in that it goes step by step in a well defined manner. If you go through the If… AND If…. AND If ….. Then. If you have done logic circuits using gates(AND, OR etc. ) then it is even more easy to understand.

Aa lot of times we are faced with the dilemma, that we have introduced a product, after identifying a niche in the market, with breakthrough technology, which has a novelty factor also, but the market is not accepting it. So you start figuring out the reasons.

One way to do the analysis and figure out the course correction is using the theory of constraints, by using the If …AND , If …. Then construct. As you start speaking the logic of the conditions you automatically start realising the flaws in your assumptions and start figuring out the possible challenges because of which there’s no pull in the market. I have found it’s a good way to surface the assumptions that you have taken during the launch of the product. Sometimes it actually makes you go down to where you started the buyer’s journey for your product. It can get you down to first principle thinking because it is so logical.

So while you do a lot of careful planning while launching, you should also be ready to work on a course correction if things are not going as per plan. Its your product, so a product management person you have to do whatever it takes to make it successful.

Till next time then.

Carpe Diem!!!

Creating Novelty – fighting boredom

B2B, Marketing, messaging, Product Management

I wrote multiple posts on how boredom gets the brain distracted. When your prospect is distracted, whatever message you’re trying to convey, will get passed over for the next item which takes the prospect’s attention.

The way to fight boredom is to make your message and sometimes your medium interesting. How do you do that?

One way to do that is to create novelty, another could be intrigue /mystery. There could be a lot more. At the end of the day marketing is applied psychology, so human behavior can be checked and incorporated into your marketing.

Novelty can come in various forms – one of the most common ways to attract attention would be to use the word NEW in front of your product and then list out your product attributes which are new and novel.

In the case of mobile phones, they talk of the camera lens or processor generation to showcase novelty. In case of televisions its about the display.

All the above products are commodity products, so people will not pay attention to the messaging / advertising if they don’t see any novelty. In case of consumer products being advertised on television, this is a very big challenge for the product manager, because people change the channel with the remote, the moment they find anything boring.

For the B2B product management or marketing person, especially in the services space, the challenge is a lot tougher in terms of creating novelty. You need to be able to come out with something related to your process or your technology and project it as something unique.

Operating in this space I have had many different experiences with trying to attract attention. Depending on the hierarchy of the B2B people you are trying to attract, the industry that you are targeting everything will make difference to the “novelty ” you are trying to bring out. But that’s what makes product management in the technology space interesting.

Till next time then.

Carpe Diem!!!

Single Target Market – Once Again – Testing

B2B, Marketing, Marketing Stamina, messaging, Product Management, single target market

In my post yesterday I wrote about how deep these three words – Single Target Market -are, for a product or marketing manager when they are launching a new product or service.

Even if you have a checklist based on which you identify a Single Target Market, you still need to test if there’s actually a need for your product / service in that market. “You have identified a niche in the market, but is there a market in the niche” I don’t remember where I first read this quote but its absolutely critical.

Before that you will need to test if the message that you are conveying resonates with the market. You will need to test if the medium you are using, actually takes the message to the market which people notice.

So testing, as I emphasised in my posts multiple times earlier also, is absolutely critical for your success. You may do as much analysis sitting on your desk, its only when the “rubber hits the road” that you realise how good your actual planning isarke.

If you have thought through the Single Target Market really well, then you would have also hypothesised about the conversations going on in the mind of the prospects at different stages in the buying cycle. However whether what you have sent out as a message is resonating or needs to fine tuned can only be figured out as you start playing in the market.

Similarly you may decide to send out pamphlets, to the audience, but the audience prefers to see a message on the social media platforms, that also needs to figured out.

Last but not the least – there’s a lead time – for any market to convert. In the case of B2B the lead time is actually very long – sometimes even upto two years. Reason being most B2B buying happens after a lot of effort where multiple departments are involved. So there’s lots of inertia as well as processes that need to be closed before another vendor is brought in. In addition until and unless the incumbent vendor has really messed up, the companies you target will not like to consider someone new. If you have a new technology which the existing vendors don’t provide, they may still consider you, but the process is still very long.

For this you need to have a lot of marketing stamina to not only test but also for conversion of prospects.

So while the Single Target Market can make your market entry strategy very structured, you still need to prepare for doing testing and tweaking your message or your medium.

Till next time then.

Carpe Diem!!!