What Is Lean Marketing … Really?

Occasionally I feel the need to resurrect this question. As I have noted a few times in the past, the term Lean Marketing has become bastardized by consultants with their own agendas. Since we are consultants too, one could argue that we also have an agenda. We do. That is to keep the term “lean” from being bastardized for no value-add.

Marketing itself is a broadly defined, and therefore effectively undefined, term. Adding a new modifier and now broadly defined term “lean” just makes it even more vague.

The term “lean” has been around for decades and basically means removing “costs” that do not add value. Running lean does not mean running on a small budget. It means not doing things that don’t add value. Just because you try something that does not work does not imply waste, if you learned from it.

The first attempted change to lean when applied to marketing was to suggest small budgets. I wrote about this in 2009. The popularity of the book, Lean Start-Up, which has good concepts, but is more about agile than lean, further bastardized the term lean. As a result of that book, many have started referring to Lean Marketing as meaning the application of so-called Lean Start-Up principles to marketing. Again, lean is about removing waste, not doing it cheaply. Waste is waste. Mistakes made while learning are not waste unless they were preventable, or you don’t learn.

Lean thinking is a valuable tool in the application of business processes. Revenue side or fulfillment side. Agile and flexible organizations usually have a competitive advantage from the use of those skills and methods. They are not about lean; they are about methods.

In the end it’s about doing the right things right. Being fast and flexible has always been a competitive advantage, but as we note in our book, Value Acceleration, what was once a competitive advantage, soon becomes a competitive necessity. That is what’s happening today with agility and flexibility. They are becoming a competitive necessity.

Constraint Analysis, Lean Thinking, and Continuous Improvement are the three cornerstone process tools needed to compete effectively. Learn them, apply them, and win.

Mitch

Posted in process management | Tagged , , , | Leave a comment

Digital Marketing Failure

It’s my opinion that many marketers who focus on digital marketing stop thinking. They become enamored with the automated nature of the process, and the fact that it’s “free,” and therefore don’t think, as they should.

Here is recent example.

My wife and I were considering using one of the home delivery food prep companies where they provide you all the ingredients and recipe to make meals you might not otherwise make. This is especially true if you need small amounts of unusual ingredients. We looked at Blue Apron and Home Chef, and signed up for both and are using neither.

Why?

Blue Apron requires you to take 3 meals a week. We don’t want to. We have an account with them, but have never ordered anything, and they have never asked why. To be fair, they have rarely reached out to us since we signed up.

The other service was Home Chef.  They only require 2 meals a week, which was a better fit for us. Until we discovered that they charge for delivery if you don’t take three meals a week; and the delivery charge is almost as much as the third meal. That was annoying, so we have never ordered anything from them either.

However, unlike Blue Apron, which sends an occasional email about how wonderful they are,  Home Chef keeps sending me emails asking me if I am “Ready to Home Chef?” No I am not for the same reason I have never ordered. They don’t know why and if they were to change their policy on delivery, I would not know either. However, their digital marketing engine is grinding away. Clueless about why it is not working. But maybe on a % basis it is, so they’re “happy.”

It just seems obvious to me that if someone signs up for your service (which requires effort) and then never uses it, they might be a good candidate to ask “why not.” But then maybe I’m missing something.

Mitch

 

Posted in customer satisfaction, Web-based Marketing | Tagged , , , | Leave a comment

The Root Cause of the Lastest United Airlines Fiasco

As many have read today, United Airlines was caught, again, in an embarrassing incident. This time having the police forcibly drag a doctor off an over-booked flight. They offered $400 and then $800 to re-accommodate and only got two takers when needing four seats. They used a computer to randomly select two other “volunteers.” Unfortunately, one of the “volunteers” refused and he was removed by police. The cell phone video of his removal has gone “viral.”

United’s CEO has apologized and offered to get to the bottom of it. I can save him the time. Lost in the many words written was who they needed to place in the four seats: United employees who needed to be at the destination to fly another flight. That’s right, they bumped four passengers to accommodate employees. Customers first, I don’t think so.

However, let’s assume that not getting those four employees to the next airport would inconvenience over 100 other customers. Fine, I’ll buy that, but then why did they stop at $800? Certainly there was some price that would have gotten two more people to say yes? $1,600? $20,000? Certainly they could have bought off two more people for a lot less than it will cost them in bad PR. And they are an airline for goodness sake, they could have chartered a plane if need be, again for less than this incident is going to cost them.

How did this happen? Simple. At United and most other airlines, passengers are an inconvenience to the movement of airplanes. Nobody really cares about them or the solution would have been easy. Hey, I know a UPS employee who rerouted an entire plane to make sure Christmas packages were delivered on time. Cost a fortune and he got praised, not fired.

United is, unfortunately, not unique in the airline world with this culture. So, for those planning to “never fly them again,” good luck with that. Most other airlines, would have done the same thing.

Mitch

Posted in airlines, customer service | Tagged , , | Leave a comment

What Can Save Brick and Mortar?

A recent article in the San Francisco Chronicle got me to thinking again about why most traditional retailers are having so much trouble these days. Still. I have written before on brick and mortar suicide (just search the blog on brick and mortar), but the trend continues some of which is self-inflicted and some as shoppers and the world changes.

But what can traditional retailers do to survive?

Most advice has two components: First and most obviously, blend online and physical as Walmart has done reasonably well. The key advantage, at least today, is that if the customer wants it “now” they can order it and pay for it online and then go to the store and pick it up. Walmart, Target and others do that well. Others could too and that certainly provides two values for the retailer:

  1. They get sales the online only stores like Amazon can’t get.
  2. They can entice the customer to shop their website more often.

All they have to do to make this business model work is create a website with a great customer experience (should not be that tough today) and make sure they can execute in-store for online orders. Again, should not be that tough.

However, there is one other area that most stores are not only failing in, but going backwards: That is in-store customer experience. Shopping for many used to be fun. Most retailers have killed that. Macy’s is in a death spiral in my opinion because, among other things, they destroyed their in-store experience.

Williams Sonoma still makes shopping in their stores an experience. Surprise (not) their in-store and online sales are both strong. Meanwhile retailers such as Sears, Penny’s and soon to be Macy’s are cutting “costs” that make shopping in-store an experience worth having. Destroy that and why should anyone wonder why ‘nobody’ does it anymore?

What does the brick and mortar business model offer that online can’t? Instant delivery and shopping experience. If you don’t provide either of those then why are you surprised when sales drop?

Mitch

Posted in retail | Tagged , , , , | Leave a comment

Adaptive Business Models

We have written a paper on business models, and most who write on the subject today focus on how business models are changing, often due to technology. Famously disruptive business models include amazon.com, airbnb, Netflix, Uber, etc. And sometimes changing business models get blamed for the demise of a business, and perhaps invalidly.

We concede that Blockbuster was displaced by Netflix and offer the observation that Blockbuster could have adapted to also offer the video by mail service, which is now morphing to video streaming, and Netflix is on top of it too.

However, while all this is going on Family Video is pulling in $400MM+ per year with fixed location video rental stores and making 10% at the bottom line. According to a recent article on the company in Forbes, the CEO of Family Video says that blaming the demise of Blockbuster and Movie Gallery on flawed business models is accurate, but not for the reasons most believe.

He says it wasn’t the migration to video but rather that they weren’t well run businesses. They had too much debt, poor leases and a flawed revenue sharing model with the studios. He has built a flexible and adaptable business model that succeeds in today’s world for his customers. This includes owning the real estate so he is able to adapt his stores to their changing markets; creating a place where locals want to come for the customer experience and not sharing revenue with the studios.

Is this a niche business? Sure, but 10% profits on $400MM is nothing to sneeze at. To succeed in today’s world you need flexibility, adaptability and the processes in place to facilitate that for you.

Mitch

 

Posted in retail | Tagged , , , , | Leave a comment

We Love It When Others Agree

A recent article in Ad Age suggests that it is past time for mid-market companies to embrace data to improve decision-making. We agree. In fact we have written three papers on the subject.

Granted the primary source in the Ad Age article is SAP a large provider of data analysis tools, that does not make their assertion untrue. While we aren’t big fans of their solutions, especially for mid-market companies, there are lots of useful and cost-effective tools on the market now.

If you entered a career in marketing to avoid math, well it isn’t going to work anymore. However, the good news is the math geeks can help you and the economics make sense today. Read our papers to learn more.

Mitch

Posted in Marketing | Tagged , , , | Leave a comment

New Excuse; Same Result

54938190 - businessman get success with red arrow on target at the back of his suit on dark background, business concept

If you take a look at the CMO category on this blog you will see that I have posted about the short tenure of “CMOs” for a while. It won’t take you long to see my point about why that is true: CMOs can be sacrificed when a c-Suite exec needs to be sacrificed without really messing anything up. The reasons are noted in the various posts.

The most recent research on this subject from Korn Ferry International notes the average tenure is up to 4.1 years and still the shortest of any c-Suite executive. The gist of the reason for short tenure, according to Korn Ferry is best summarized from this quote:

“Today’s customer-centric CMO role is exceptionally complex and requires the right balance of left as well as right brain skills, and very importantly, a differentiated set of leadership competencies,” said Caren Fleit, senior client partner and leader of Korn Ferry’s marketing center of expertise. “CMOs with this unique profile are in high demand and are often recruited to lead the next transformation. Also, in some cases, short tenure can be attributed to the organization not being well aligned behind the change that the CMO is tasked with leading.”

Sure if you like, but I stand by my premise that two things are true;

  1. The CMO is an undefined term and the real authority does not remotely match a “transformation” responsibility
  2. When the CEO needs to make a c-Suite move to satisfy the Board or investors, the CMO is the best sacrificial lamb.

Mitch

Posted in CMO | Tagged , , , , | Leave a comment