It's Not Luck – by Eli Goldratt on Goldratt Marketing


It's Not Luck – by Eli Goldratt on Goldratt Marketing

by Gavriel Shaw

Notes from It's Not Luck on the use of Theory of Constraints…

(for strategic marketing)

…when the MARKET is the constraint.

"How to magically convert buying objections and customer complaints and problems into wild sales success and business growth."

Identifying the UDEs and evaporating conflicts

Conflict Resolution with the Evaporating Cloud:

If there's one thing that irritates people more than criticism, it's constructive criticism.

Whenever you identify that you are in a negotiation situation that doesn't have an acceptable compromise, take the first step: immediately stop the dialogue. It's not personalities to be blamed, but the situation. Whenever we face a conflict we should not attempt to avoid it by compromising.

First step is to precisely verbalize the conflict: What do I want. What does the other person want? What are the related needs?

Second step: What is our common objective?

Third step: What are the assumptions: In order to ____ we must _____ because _____?

There is usually more than one assumption for each arrow. Concentrate on the arrow that irritates you most.

Examine the assumptions under the arrows i order to break the conflict.

Fourth step: Find injections that bring about a solution by evaporating the conflict.

'we need to run as fast as we can just to stay in the same place'

Just clearly presenting the negative branch without trying to suggest a solution.

Current Reality Tree

The first step is to build a CRT. Diagramming the cause and effect relationships that connect all the problems in the situation.

At the core there are always only one or two causes.

Rather than problems in themselves, they are undesirable effects, unavoidable derivatives, of the core problem. Prioritizing the UDEs is not part of the process.

Try to clarify the cause-effect relationships by inserting intermediate steps. What is the connection between ___ and ___?

In any involved subject I have always found at least one devastating loop.

Optima

Striving for local optima leads to the lack of innovative marketing ideas.

Two sections of the market are called segmented from each other if and only if changes in prices in one section do not cause any changes in the other section.

Aggressively segment what seems to be a uniform market.

I must assume that it is possible. I must take it for granted. That's the only way I can gather the stamina to go and look for it.

In order to consider the need to get enough sales, managers must make decisions and act upon the clients perception of value.

Let the competitors pave the way, we'll follow.

We know that there are two types of benefits. Adding something positive or eliminating something negative.

Easiest and quickest improvements by concentrating on eliminating the negatives. … by addressing the clients core problem.

You don't need to survey the market to get the UDEs. You don't need to have every single UDE to write a good CRT. A representative sample is usually enough to identify the core problem.

What is the market of a company? We can define it as the person who the company interacts with. We can define it as the companies to which it sells its products. We can define it as the companies that buy from the companies whom we sell to. Or we can go as far as describing the market as the end consumer.

I suspect that we can do the analysis for each stage, and as we are coming closer and closer to the consumer we will get more powerful solutions. Of course the implementation will become more involved, we will have to convince the intermediate links to collaborate.

Future Reality Tree

Through constructing the FRT you hope to gain more understanding about your injection.

Now we know what's needed. It's not enough to increase the market perception of value to be above our requested prices, we also need to increase it to be much above the market perception of value for the competitors products. We need to do it in a big enough market, big enough to exhaust all our capacity. And we need to do all of it in a way that will be difficult for our competitors to copy.

A product that relieves prospects problems brings benefits – the more and bigger the problems that it relieves, the greater the benefits.

The solution to marketing is in the market.

So many UDE's stem from the current service provider itself, meaning that no one is successfully addressing the core problem responsible for the UDEs.

The FRT seeks to turn the injection for the cloud into a derivative, a result, of the actions taken by the FRT.

Making The Sale

Create your Mafia Offer by finding how to [This content is protected under Free membership.]

Buy-In

Always start with a step that people are expert at performing. And everyone of us is an expert at bitching and moaning. Coimng up with all the reasons why it can't be achieved, raising obstacles.

For each obstacle we have to figure out the corresponding intermediate objective; the thing that if we achieve it the obstacle will be overcome.

Which intermediate objectives can we achieve in parallel, which only sequentially.

Transition Tree

The only way we can smoothly deliver such a complicated message.

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Now it's your turn

What is preventing you from getting more sales?

What are the major complaints of your customers?

What demands do your prospects make?

What do they demand in order to place an order with you?

Here's a page that goes deeper

Theory of Constraints Strategy SPIN Mafia Offers.

And here:

Theory of Constraints' Unrefusable Offer, aka the Mafia Offer – Capacity constraints can usually be elevated and broken with focused management, and if necessary, increased Operating Expense or capital investment. But Market constraints a lack of sales, or a margin-squeeze that erodes profits even if sales grow are the constraints that companies often have the most difficulty in breaking. Throwing money at the problem through advertising rarely improves the situation.

Originally posted 2009-02-08 21:06:37.

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