Business901

The Funnel of Opportunity

Part 1

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Business901 Introduction
Marketing has transformed from the traditional methods of outbound marketing to the new methods of
inbound marketing. It has spawned a different type of engagement. However, the traditional means of
marketing still reside within most organizations. They still hire people based on the look and feel of
inbound marketing and the “deliverables.”

The successful Marketing Consultancies such as Sales Force, Hubspot, and Marketo, are companies that
deliver a process that an organization, large or small, takes ownership of delivering their own message.
This process has become the marketing. Marketing is no longer driven by the arts or the latest social
media tool. Marketing now must deliver a powerful, transparent, and authentic message communicated
in a compelling and trusting manner. This process can consume large blocks of time and energy if it is
not delivered in a consistent, effective and efficient manner. Consultant and author Kristin Zhivago has
been widely quoted for her observation: "Marketing has shifted from 80 percent creative and 20
percent logistics to 80 percent logistics and 20 percent creative."

There is always an opportunity. However, there is not a step by step method. Innovators, Start-Ups, and
even Scaling Businesses look for that formula and try to think of an effective and efficient way to go
about it. The problem that exists is that most opportunities are not created they are discovered. You
have to venture into the unknown, and most of us are just not Captain Kirk.

In Kata (Experiment), we think of the Target Condition we want to reach. We discover the obstacles
along the way and work through the PDCA (Plan-Do-Check-Act, Scientific Method) cycle to overcome
them. In the non-profit world, we may look at Impacts and the desired outcomes we need to achieve to
get there. With both of these methods, though uncomfortable at first, we get accustomed to not having
to have a defined path towards the end result. We learn that it is a journey, and though uncomfortable
at first, it is something that we can learn. I will mention that it is not easy to go at alone and for both, I
recommend a coach.

Both of these processes lend themselves to sales and marketing, and I have used both in my consulting
practice. There is another approach that is adjacent in thinking and may take a better approach or a
path to discovery. That is the role of an explorer.

I go back to explorers of the past that old Columbus, Magellan, Lewis and Clark and Leif Erickson model
you might say (And just so we are on the same page lets define the act of exploration as the searching
for the purpose of discovery of information or resources). What did they do that others do not? They
relinquished the idea of controlling the outcome. When we think of opportunity, it often equates to
uncertainty, loss of control. The space that most of us try to define and manipulate others on some
desired path to reach/accomplish.

In sales and marketing, we think we can create opportunity. We construct Marketing Funnels, Process
Maps, Service Blueprints and other tools thinking that we can create a customer/opportunity from it. I
am not saying any of this is wrong because just be the actual application of a process of some type we
are going to focus and become more effective and maybe even more efficient.

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Business901
Successful companies do not have a magic formula. If they do, it is a matter of trying more things that
put themselves in a better position to recognize or not to recognize opportunity quicker. It is about
acting and trying different opportunities along the journey. Explorers are also masters of saying no or
preventing from getting to far drawn off. They are grounded in reality. This reality of understanding their
own capabilities allows them to seize a moment when it exists. This is often called skill or luck, but it is
also about being prepared. And as a side note, good salespeople intuitively can “smell” a lost
opportunity. They are seldom wrong.

How do you go about exploration in sales and marketing? “Begin where you are.” This is my first advice
to most companies; Formulating that current state not only of your present capabilities and the
knowledge that your customers have empowered you with. Their markets and the way they make
decisions. Then start exploring opportunities based on what you have learned about present customers.
It is sort of like cold calling from our customer’s perspective. Remember action precedes knowledge
most of the time, so in essence, cold calling is not dead just refined.

What about exploration at the top of the funnel, not at the bottom? I would argue that adjacent
customer behaviors and needs will allow you to explore more than you can handle and is the quickest
and most effective way to gain new business.

The most important thing we can do to create opportunity is to set a path and move to action which
most of us do in creating a sales and marketing process (just in the wrong direction). What we don’t do
is the third thing relinquish the idea that we can control the outcome. When we can leave that idea go,
we accept and evaluate opportunity based on our capabilities. What is so wonderful is that it expands
our understanding by letting go. We see things that we have never seen. Opportunities that we have
never seen. It reminds of an old Zen saying, “to take a deep breath, you must first exhale.”

Many small organizations procrastinate on their marketing efforts. They already have other jobs or are
working on a sufficient number of bids. When they finally reach out for marketing assistance, what they
are looking for is sales. On the flip side of the coin, people oftentimes start marketing by creating
brochures, advertisements, and other marketing collateral without having a well define process or
strategy. This mix has to be balanced along with time, money, and people. If you don’t, people will grab
that next “silver bullet” for marketing, thinking that is the answer. You reduce the risk by creating a
certain percentage of standard work - things that are working now. You dedicate a percentage of time to
improving existing processes. You also dedicate time trying something new. We learn by doing with little
risk and still have upside potential. The one final step is to say no to the least effective or the things that
are not working.

Most organizations have never viewed their marketing from a process standpoint. The world of
creativity clashes with the logical thinkers in the process world. It is very difficult to make this
transformation on your own and without the experience of someone well versed in both areas. The best
way to start is just to start, pull the trigger. Go through the process of deciding what to continue doing,
what to change, what to start new and what to stop.

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Business901 A Lean Approach to Marketing
Lean processes have changed the way we think about manufacturing. It has become one of the most
embedded practices of manufacturing and is based on these five core concepts:

1. Specify a value from the standpoint of the end customer by product family.
2. Identify all the steps in the value stream for each product family, eliminating whenever
possible those steps that do not create value.
3. Make the value-creating steps occur in tight sequence, so the product will flow smoothly
toward the customer.
4. As flow is introduced, let customers pull value from the next upstream activity. As value is
specified, value streams are identified, wasted steps are removed, and flow and pull are
introduced, begin the process again and continue it until a state of perfection is reached.

Many people are familiar with the Lean Start-up, I mention later and something that I equate to the
terminology of Explore-Do-Check-Act (EDCA) versus the Plan-Do-Check-Act (PDCA) that is associated
with Deming, Shewart, and the Toyota Production System (TPS). My Lean Thinking is more about
knowledge building and learning. The steps, create the successful marketing practices of today. One of
most misunderstood applications of Lean to Sales and Marketing is the application of pull. With pull in
manufacturing, you think about building the process backward and building from the standpoint of what
the customer values.

You start with the end in mind, and then you build a production plan based on what the last operation
needs, and then what the second to the last operation needs, and then what the third to the last. You
start with the downstream milestone or the downstream end goal if you will, and then you figure out
that downstream is pulling the upstream activities. That’s something very different than traditional
sales and marketing efforts where you start at the beginning, and you push everything to the customer
in some kind of a sequence that you think you need to close a sale.

The traditional funnel goes from left to right

attracting a large number of prospects and qualifying
them through an elimination process till we can find
a likely candidate and eventually a buyer. It is a
terrible process that not only wastes a great deal of
money and time but also is getting more and more
difficult to navigate. The reason for is not that
prospects are against being engaged but once they
engage they become manipulated and worst led
down a path that may or may not be a good
alternative. Just because they were interested,
organizations try to force them through a decision
process that will ultimately lead to a sale of their product or service. It is seldom if it is a good customer
fit most ideas surrounding selling are nothing more than force fitting our product/service with the
customer.

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Business901
You will see later in the document how I create personas and marketing segments from existing
customers and prospects. This further relates to the concepts of edges that I discuss or what I may call
the Funnel of Opportunity versus a Funnel of Depletion described in the paragraph above. We start with
what is known and work outward, never making a cold call always making a warm call. Always building
upon what we know, empower existing customers, engaging prospects, exploring new. Doing it this way
we can quickly test new ideas, new methods in small groups and build upon the information we receive.

To find the edges of existing customers, market segments is again not an intuitive process. It requires a
deep understanding of our customer’s markets, not ours. A little background on this may be the
research that served as the material for the book, The Challenger Sale by Matt Dixon. Skipping the
details, in the book, they describe how the Challenger Salesperson creatively connects the suppliers
existing capabilities to each customer’s unique environment and then presenting those capabilities to
the customer through the specific lens of whatever customer obstacle is keeping that deal from closing.

What is happening in the world of sales is that we are on the edge (or maybe already there) of a
collaborative way of selling. We no longer can just sell to a customer; we have to understand our
customer’s business and our customer’s customers’ business. The only way that I believe possible is if
we are participating at the point of use of our product or service.

When I apply Lean to Sales and Marketing, I view Lean as a knowledge building exercise. It is the deeper
understanding of the customer business that we achieve through the methods of PDCA and EDCA
(Explore-Do-Check-Act, Design Thinking, Lean Startup). We are exploring opportunities and helping the
customer become more efficient or create better opportunities. It is not the role or expert that you
must take. Experts are only average sales people. You must allow your customer to become your
teacher and learn their business from their perspective. Your sales and marketing become more
responsible in getting the message in versus the message out.

This is not just about innovation and development, though it will certainly accelerate the process. This is
about creating opportunities in the 5 Rs of Growth (Retain, Refer, Re-Gain, Re-Sell, Renew), and in new
customers and partners. This is characterized by SaaS companies and their ability to integrate with
others. But the question is how do you discover these edges and know it when you see it?

The most obvious edges are product edges which are the most traditional and focuses on innovation
and development. The second edge are journey edges which are where we focus on in the sales and
marketing space. The third edge is enterprise edges which are our underdeveloped assets within in a
company. All three edges offer opportunity and depending on the company; one may be an easy
alternative than the other. For further discussion on this, I would recommend the book, Edge Strategy: A
New Mindset for Profitably Growth.

One of my favorite books last year was The Challenger Sale: Taking Control of the Customer
Conversation. The authors summed up much of what I have been trying to say for the past several years
in a much more compelling and concise way than I ever could. I encourage you to read this book and
their follow up The Challenger Customer.

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Business901
At the heart of their research is the Sales Person and Sales Manager. First, let me explain the five types
of sales people that you will recognize in an instant.

1. Hard Worker: Show up early, stay late and always willing to put the extra effort.
2. Relationship Builder: Strong personal, professional relationships, advocates for the customer.
3. Lone Wolf: Follow their own instincts instead of the rules, they just gitter done.
4. Reactive Problem Solver: Focus on heavily on post-sales follow-up ensure promises are kept.
5. The Challenger: Assertive and have a deep understanding of customer’s business.

Many would look at this mix and think how they have a few of each type. In fact, the study shows that
the average salesperson is spread across four of five areas. As the authors say, “mediocrity comes in
multiple flavors.” What is so revealing in the study is that 40% of the top (star) performers are The
Challenger model. The attributes of The Challenger were further broken down into six significant factors:

1. Offers the customer; unique perspectives

2. Have strong 2-way communication skills
3. Knows the individual customer's value drivers
4. Can identify economic drivers of the customer’s business
5. Is comfortable discussing money
6. Can pressure the customer

These factors correlate to how the challenger creates sales. They are willing to challenge a customer,
and their thinking to create new opportunities through more effectiveness or innovative ways of
thinking. In other words, they are making the customer more profitable with different ideas. Another
surprising truth is that this also relates to sales managers. The sales manager role is not resource
allocation but assisting sales people in innovative ways of getting a deal done. The authors define this
innovative thinking in this way. This is about creatively connecting the suppliers existing capabilities to
each customer’s unique environment and then presenting those capabilities to the customer through
the specific lens of whatever customer obstacle is keeping that deal from closing. What is happening in
the world of sales is that we are on the edge (or maybe already there) of a collaborative way of selling.
We no longer can just sell to a customer; we must understand our customer’s business and our
customers’ customer’s business. The only way that I believe possible is if we are participating at the
point of use of our product or service.

When you start looking at edges, you start asking different questions. The sales and marketing people,
The Challengers, are looking at organizations that participate with their customers and seeing how their
own product or subsets of their product integrate with them. We look at how to extend both our
customers business and our own creating opportunities along the customer journey.

But we first start with asking different questions:

 What do our different types of customers want or need?
 What could or should our solutions include?
 Which of our assets would others value and why?

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Business901 Jobs To Be Done
Tony Ulwick has turned jobs-to-be-done theory into the world’s most powerful innovation process:
Outcome-Driven Innovation (ODI). This patented innovation process is the cornerstone of their success.
Tony has evolved the innovation process from art to a science. first introducing his work in What
Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services, and
now taking it to another level in his new book, Jobs to be Done: Theory to Practice.

Companies must understand that customers hire your products, services, software, and ideas to get jobs
done. People that can dissect those jobs to discover the innovation opportunities that are the key to
growth.

They use a method called job mapping to break down the tasks the customer wants to be done with a
series of process steps. By deconstructing a job from beginning to end, a company gains a complete view
of all the points at which a customer might desire more help from a product or service—namely, at each
step in the job. Then, with a job map in hand, a company can analyze the biggest drawbacks of the
products and services customers currently use. Job mapping also gives companies a comprehensive
framework with which to identify the metrics customers themselves use to measure success in executing
a task.

The goal of creating a job map is not to find out how the customer is executing a job—that only
generates maps of existing activities and solutions. Instead, the aim is to discover what the customer is
trying to get done at different points in executing a job and what must happen at each juncture in order
for the job to be carried out successfully.

- How to Map a Customer Job – Anthony Ulwick , Marketing Journal, March 18, 2016

I use JTBD thinking in interviews and developing a value proposition. I find having a strong value
proposition and precise value statements when you are calling or emailing is imperative.

It is one thing having this overall statement something like:

Value Proposition: Their Pain/Gain + Our Differentiator

But if I can tie it to a customer initiative it really makes it much stronger:

Value Statement = Their Pain/Gain or Corporate Initiative + Our Differentiator

Going a little deeper if we can tie it and quantify it to a particular job they are trying to do this really
turns a few heads as they can see themselves or attached themselves much easier to the
product/service.

JTBD: (Direction + or -) (the unit of measure) (outcome desired)

Example: Minimize the likelihood of scratching the surface

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Business901
Suggested JTBD Interview Questions:

1. What jobs are people trying to get done by hiring our products/services?
2. What are the eventual outcomes they want by doing these jobs?
3. Is this the primary job or is it one step in a chain of jobs?
4. What are the jobs that lead into this?
5. What jobs does this create for themselves and others? Who else will benefit?
6. What environments are they in when performing their jobs?
7. What restrictions do they face in performing their job?
8. From their point of view, how happy/unhappy are they with the outcomes they are achieving in
getting their jobs done?
9. What advice could they give us and who else should we talk to?

We tie the value proposition to the driving force of customer change. These are typically called the four
forces affecting a customer decision process:

 The Push of the Current Situation

 The Pull of the New Solution
 The Anxiety of the New Solution
 The Allegiance to the Current Situation

I use the Value Propositions/Statements and the JTBD information to create marketing collateral. One of
the central factors is not to try to prove your value proposition but to use it only as a starting point if
needed. What we are really after is to create a value proposition that speaks to a need that someone
has and are unhappy with their present solution. If you are only offering an alternative to their current
solution, it can be very difficult no matter how much better, it is. If you must convince them to innovate
and think differently, it still can be a difficult proposition. If they do not have anything to compare, they
will create something. So, the alternative is to find a sweet spot that makes a viable offering.

Our Value Proposition is delivered based on a Customer job.

 Think SDCA: A tactical team works with a customer needing standard products/services.
 Think PDCA: A problem-solving team works with a customer needing slight alterations or
bundled products/services.
 Think EDCA: A creative team works with a customer that needs new or major changes to
product/services.

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Business901 View from a Startup (New Development) Perspective
When viewing markets, many development projects that seemingly are viable products have been developed
around too few of customers and sometimes just one. That is not saying that is not a worthwhile product. It is
just saying that a viable market has not been found. It is important to be able to find a beachhead target market
of as few as five and sometimes as many as 20 or 100 to establish market viability. This should not be something
that needs to be explored it should be obvious to the developer and to the prospective user. If that beachhead
market can be established, you cannot create effective market segments, personas and product trials and/or
scaling with other marketing channels.

Often developers sink a great deal of cost into development and often development for one client. This creates
a product that is more often a feature than a standalone product. Therefore, it is so important to have a
beachhead market in place to evaluate your marketing and scaling efforts.

Can you easily identify five companies, five departments in those companies, five teams in those companies five
people in those companies that cannot live without your product? This amount of depth I think is the most
important part of taking a product from the idea stage to product viability.

Start-up should just replace the idea of market segments with personas. Or, think of your 5 core
customers as your beachhead market. Your beachhead market should be somebody that paid for the
product, no relatives, no freebies. And by the way, creating personas is not boardroom-style; it is
developed by talking to people.

Budgets are great. I love them and encourage you to have one. You need to decide what you can afford
and the investment you want to make. Many people fail because they start their marketing with looking
at each individual event, opportunity and determine the value of it individually. Since most marketing
has a certain delay, it results in very short-term and failed thinking. A better way of doing it is to
establish a budget, a benchmark based on what is affordable to you at the moment. One that allows you
to go to sleep at night.

We start looking at channels and which ones we believe are the most attractive to test. We pick 3 within
our budget parameters and start. As we develop them, we become more efficient and effective at them
reducing cost and enabling to do more with the budget. What does not work we discard and replace
with another marketing channel. It is difficult to put a cost on exploration. You just need to set number
and stay within it. And you should always have a little exploration going on.

Deliverables are something else you address. Most entrepreneurs will set them on some number that
they pull out of their hat. I am very precise in the idea of setting objectives: From what to what by when,
then setting several strategies to use to gain there within the budget constraints and then setting the
action/tasks to make it all happen. The problem is that most do not even have the first what and the
strategies are not proven their only a hypothesis that needs to be proved. I mean do we really know 20
cold calls = 1 client? In real estate, the rule of thumb is for a Realtor always to have 5 people in the car in
a given week. This results in 1 sale a week. But the process is known and is adjusted according to

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Business901
markets. It could be 4 in one area and 8 in another. Once a repeatable process is in place, deliverables
become clear.

We will build an adaptive plan and create standard work, or best practice, as we move forward. This is what
makes our sales and marketing more effective. However, we need first to develop our adaptive process unless
you have a method of acquiring customers already in place. If you do, we use that method and repeat a few
times, standardizing along the way. I sort of follow the USA principle: Understand-Simplify-Automate. If you
reverse the order, for example, build an auto-responder first you will spend a whole bunch of time and money
figuring our target clients. You will build a company if you’re lucky without core capabilities and sort of a job-
shop type structure. Something very, very difficult to scale.

most companies wait till cash is gone to start developing several beachhead markets and exploring the sales
channels/verticals to reach them. They get started with people that concentrate on building linear step by step
plans. The thought of gathering a large group of prospects and narrowing them down through some type of
funnel and toward a prospective customer. I call that thinking a funnel of depletion.

A study of 30,000 startups that Harvard Business Review did several years ago, they found by a very wide margin
that lack of market segmentation or customer definition as the number one reason for product/company failure.
This is why it is not good enough to define a market based on just early adaptors or a broad demographic. It is
even not enough to say making you more productive and efficient. There are a million apps that do that and
seldom do they deliver. The cost of change is steeper than the cost of non-adoption. What is needed is a
customer, a beachhead market that your solution solves that cannot live without your product. If you do not
have that, all the marketing in the world may not get you there. That is what Lean Startup thinking and the
Business Model Canvas is about; finding product/market fit.

This is also where the efforts of the Jobs To Be Done Theory of Ulwick’s is so important. For start-ups and
innovation in mature companies, this practice has yielded outstanding results. The work is not easy. Neither is
building a Funnel of Opportunity. You must be willing to work with customers and ask questions that you may
feel like the learner, not the teacher. However, when you play in their playground, at the point of use where the
value is being created, you are the learner.

Your marketing must evolve. If it was so simple that someone could look at a website and just create a plan, I
think most would already be doing that. It is not about the tools you use; it is about the conversations you
create. Creating an adaptive plan is simple. Carrying out the steps are a little more difficult. However, doing it
this way creates a plan of action, doing and learning. Adapting is more about reflection than changing.

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Business901 Outcome-Based Thinking
When we look at continuous improvement efforts, we determine what we need to change to create a
better process. We emphasize the change needed. Certainly, there is a degree of “Check” in our
hypothesis and experiments but seldom is that the emphasis of our work. Often, we concentrate on
doing an experiment and making it work. We are accustomed having a product, a service, a website that
we can monitor and acquire metrics. With a new product, we may use Lean Startup thinking in
validating product (service)/market fit. In operations, we may do similar things. We prototype, we try,
we “Check” results and “Adapt,” that PDCA stuff or Build-Measure-Learn.

The difficulty taking product development or operational thinking to sales and marketing is that it
assumes you have control of the prospect. There is a difference between customer validation and
selling. There is a difference in the perception of what waste is in operations and selling. There is a
difference in developing a service than selling. Lean Startup, Service Design, Design Thinking and Lean
(whatever noun you choose) has difficulty in being applied directly to sales and marketing.

In sales and marketing, and when most organizations apply Lean to sales and marketing, the tendency is
to get into this mapping exercise very quickly, sometimes before developing a User Persona. What I
have found about most mapping exercises is that the emphasis is on ridding ourselves of waste and
thereby drawing conclusions about the future and how we are going to proceed with our plan of action.
We develop SMART goals with defined outcomes and head for our targets. One of my favorites is we
are going to increase revenue by 10% this year. That dictum is echoed every year and though a mighty
goal, seldom do we have evidence in supporting exactly how we intend to accomplish it.

In Outcome-Based Mapping, we focus on outcomes, not impact. We do not look at increasing revenue
by 10% that is the impact we want to make. In outcome-based thinking, we look at what actions or
behaviors we need to change to accomplish our vision. This seems like a fine line or a slippery slope that
I am traversing, but the secret sauce is not how we are going to do it. Nor is it any of the other secrets
that Rudolph Kipling has so simply and wonderfully expressed to us. It is not, in Lean terms, finding the
root cause of the problem. What Outcome-Based Mapping brings to the table is the emphasis on
Monitoring and Evaluation.

Why are Monitoring and Evaluation so important? As Steve Blank, Lean Startup Guru says, “A plan does
not survive the first contact with a customer.” In the same token, a Map provides directions, but it is not
a roadmap. Sales is not going from point A to Point B and following this direct path. Sales and marketing
compare more to air travel where there is constant monitoring and evaluation taking place. However,
the plane is never on a direct path towards the destination. The elements of the wind and other weather
conditions and other flights determine our path. We are in control of adjusting because of a very good
Check and Adjust process (Side Note: As good as airlines are in the air, you wonder why they are so poor
on the ground).

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Business901
In the Outcome-Based Mapping that, I have done I have found it difficult to focus organizations on the
monitoring and evaluation. Once the outcome challenges are addressed, progress markets identified,
strategies and actions developed, we are off to the races. If you review most Six Sigma, Lean and
Marketing books, you will find the shortest chapters consistently about the monitoring and evaluation
practices. You will find books about pre-event planning, getting the right people on board and the
meetings or Kaizen Events to do this, but the monitoring and evaluation is one chapter in any of these
and half the size of the others.

We have plenty of measurements and data. That is what Big Data all about? However, how much of this
data can only be used in transactional selling processes. As Dan Pink said, Selling is Human. The
Monitoring and Evaluations I am talking about is the change in behaviors that we address in the
Outcome-Based Mapping process, The Expect to See, Like to See and Love to see Columns. It is about
developing and sustaining a process.

Seldom are we addressing on how WE understand our customers, (see blog post)? We are always
looking to have a call to action, move someone down the pipeline but are we addressing and adapting to
reach a common agreement and become a better fit with our customers. Our monitoring and
evaluations should focus more on ourselves and our actions than trying to move a customer to the next
stage of the pipeline. We should be consistently trying to improve the experience we offer at this stage.
This is not about fixing the problem. It is about going deeper and gaining a better appreciation of our
customers’ needs and wants.

In the bigger picture, when we use Outcome-Based Mapping Approach, we look at developing lifelong
customers versus a transaction-based customer.

In the Outcome-Based Mapping approach, we view the outcomes as the central part of our theme. We
recognize that a change of behavior must occur for us to achieve our goals or make the desired impact
that we wish to obtain. In traditional sales and marketing, we can develop the simplest of all marketing
funnels based on a pre-purchase, purchase (buy), and post-purchase. We have a tendency to complicate
this into numerous steps and activities. When we view an outcome-based approach, we like to separate
the group very similarly into Expect to see, like to see and love to see.

The major difference is that, in most marketing funnels, we view activities of both the supplier and the
customer as opposing reactions, much like two boxers squaring off at each other. In Outcome-Based
mapping, we separate our activities that we are doing and our outputs from the partner. We monitor
and evaluate if individuals/organizations change or benefit as a result of their participation with us. If we
have a positive influence, we assist our partner in moving from expect to like to love. We focus on
behaviors, not activities and not processes. We are constantly adapting our viewpoint to meet the
partner’s needs within the segment. So many of us try to force fit customers into a predefined path and
achieve the ultimate outcome, a sale. We talk about win-win but pay salespeople based on closed sales.

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Business901
We leave up to our sales department to balance the outcomes and maximize the opportunities within
them.

The change that must occur is to identify the behaviors, boundary partners or boundary personas we
dare say, within each column and seek to understand and emphasize why that persona exists in that
space. Most of the time we market horizontally to a persona and identify the actions needed to
persuade them. In this approach, the persona, identified by behaviors exist within the outcomes. I like to
think of using Cap-Do as an evaluation tool within these columns as required. Our core strength and
core competencies are embedded in the inputs, activities, and outputs of our organizational structure
and depicted on the left side of the map.

This example does not prescribe that we never change any organizational practices. It proposes that we
monitor and evaluate behaviors and change organizationally from an outside-in approach. This is not
meant for every organization. It may not be suited for start-ups trying to find product/market fit. It is
very well-suited for companies that desire to grow through intermediaries that will benefit from user
engagement and companies scaling that have a defined core competency.

The Outcome Base structure is very compatible with the principles I discuss in Lean Sales and Marketing.
The map outline will not be for the entire organization. It is for only one segment or what we might call
one Customer Job or in lean terms a Value stream. We do you not develop what I would call a pure
Product Value Stream. Instead, it would be based on Customers job. It is strikingly the same as the Lean
Marketing House structure and the original value stream layouts that I have used. We view the structure
from the user to through the customer and the partners that support the user weaving it way back
inside the company to operations and our vendors.

Skype: Biz901 Email: jtdager@business901.com

Business901 5 Rs of Growth
For a business to scale, you need new customers. Where do you find them? In the past, we looked at
marketing to the masses and in the hope that we will find a likely candidate and narrow them down
through discovering how much pain they are in relative to our product offering. I think in today’s world
this is a failed strategy. Our attempt to create effectiveness is to manage and segment the top of the
funnel. But why? It is our least known area and by and large the least the receptive to our message. I
believe the majority of our growth and revenue is coming after the sale, not before.

I call it the 5Rs of Growth:

1. Re-Sell
2. Re-Gain
3. Retain
4. Renew
5. Refer

There are certainly other ways to

segment customers; this not being
the only way, but it is not common
to view customers from this
perspective. When you review these areas and address your customers from these perspectives, I
believe you find your most opportunistic prospects.

The greatest growth opportunities are on the edges of the use of our product/services. Or, on the edges
of the 5Rs of Growth. We make a concentrated effort to identify and participate in relevant knowledge
flows on the edges of these 5Rs. When we envision tomorrow’s best product or service being used in
our customer’s future, it creates far-reaching possibilities. It is this type of thinking of our customer’s
business, the edges of their business, and the edges of the 5Rs that are needed for growth.

Every startup has different nuances, but I have found outside of having a bad idea, the area that
distinguished startup marketing more so than any other area is developing product/market fit or your
target customers. Most startups are affected by what might be called the China Syndrome. There are “x”
amount of people; I will get x amount of market share. So if there are a billion people in China, I
certainly should be able to get a handful for my product/service. All I need is a little marketing.

Since I don’t believe the above; I think finding your beachhead market is the most important thing you
can do. Even more so than to have a minimum viable product. If we have an MVP and an established
Target Market/Customer, we can develop the appropriate personas that we believe are correct. I like to
use a persona or even a scenario type structure in the early stages of a start-up or a launch. It provides
better clarity and focus in moving a plan forward. When you do by markets and even Key accounts to
some extent, you tend to generalize more or make broader assumptions. I would rather adjust because
of too much focus versus adjusting because of too little focus. It is also cheaper this way if that has any
relevance.

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Business901
How do we develop new marketing working with existing customers? The left side of the matrix below
will give us the most successful outcomes. There is less risk and costs are more controlled. You are
developing products and services internally and offering
them to existing customers (top left), or you just become
more efficient and effective offering product/services
(bottom left).

An understatement is that by offering new customers and

new products (top right) is more high risk and is NOT a
revenue producer. 99.9% of the time it drains revenue and
time. It is not that it is a bad thing, but it is an investment of
resources. This leaves us with the developing new customers with existing products/services or needs.
Again, it is a partial investment of resources with a little less risk than top right but more than top left.

To reduce that risk and hopefully make a little money from it a couple things need to happen. Our
marketing and sales efforts need to move incrementally from the left into the bottom right quadrant.

We go with what we know, the edges of our customers and migrating away from the target customer
into an adjacent market with similar behaviors. The things we are doing know should be similar, same
sales process, same products (maybe re-labeled), same marketing channels, etc. This way we go to what
is known to work and adapt to the new market. It is much to determine what needs to be adjusted if we
are working with a process that works somewhere else.

PDCA: Existing EDCA: New When you are trying to determine Return on Investment
Customers with New Customers with New (ROI) on your marketing most people, struggle, when in
Needs Needs fact, it is very simple. Again I take a Lean approach to the
above matrix.
Lean

In the Standard Work (SDCA) section, it is very east to

SDCA: Existing PDCA: New
Customers with Customers with establish ROI on acquiring customers. We are using
Existing Needs Existing Needs standard processes to engage and can measure all the way
through a funnel for example.

When we review the PDCA sections where we are iterating and experimenting, we will have a portion of
the cost established. However, when we go into the EDCA quadrant, it will be very difficult if at all to
determine an ROI. Your budget needs to reflect these parameters appropriately.

I create personas and marketing segments from existing customers and prospects. This further relates to
the concepts of edges that I discuss or what I call the Funnel of Opportunity versus a Funnel of Depletion
described previously. We start with what is known and work outward, never making a cold call always
making a warm call. Always building upon what we know, empower existing customers, engaging
prospects, exploring new. Doing it this way we can quickly test new ideas, new methods in small groups
and build upon the information we receive.

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Business901
To find the edges of existing customers, market segments is again not an intuitive process. It requires a
deep understanding of our customer’s markets, not ours. A little background on this may be the
research that served as the material for the book, The Challenger Sale. Skipping the details, in the book,
they describe how the Challenger Salesperson creatively connects the suppliers existing capabilities to
each customer’s unique environment and then presenting those capabilities to the customer through
the specific lens of whatever customer obstacle is keeping that deal from closing.

What is happening in the world of sales is that we are on the edge (or maybe already there) of a
collaborative way of selling. We no longer can just sell to a customer; we have to understand our
customer’s business and our customer’s customers’ business. The only way that I believe possible is if
we are participating at the point of use of our product or service. It is the deeper understanding of the
customer business that we achieve through the methods of PDCA and EDCA. We are exploring
opportunities and helping the customer become more efficient or create better opportunities. It is not
the role or expert that you must take. Experts are only average sales people. You must allow your
customer to become your teacher and learn their business from their perspective. Your sales and
marketing become more responsible in getting the message in versus the message out.

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Business901
Marketing Segment/Persona

In most of our Lean planning or improvement strategies, we identified a gap, the difference between the
current condition and the target condition. The goal then is to have a substantive conversation about
the gap.

Michael Schrage, the author of Serious Play, published a new book taking these concepts one step
further. Who Do You Want Your Customers to Become? challenges us to take our value proposition of
use to a longer term growth platform. He dares us not only to have a corporate vision statement but a
customer vision statement saying that our future depends on their future.

I like to use a persona or even a scenario type structure in the early stages of a start-up or a launch. It
provides better clarity and focus in moving a plan forward. When you do by markets you tend to
generalize more or make broader assumptions. I would rather adjust because of too much focus versus
adjusting because of too little focus. It is also cheaper this way if that has any relevance.

A Marketing Segment/Persona can be created many different ways. The point is not to make it
elaborate, just capture what we know. After you develop the personas, put realistic and some not so
realistic objectives to each persona, key account, or market segment. After that and only after that can
the idea of channels be addressed and pricing for that matter. Most people develop pricing before ever
figuring what channels they are going to use and determine what the cost of acquiring a customer is.

Your initial effort for a persona can be this easy:

 Create a Target and Current State:
 Give some thought to the ideal customer/user that you are anxious to move towards. Think of
answering Who do you want your customer to be? What problem/gain will you solve for them?
What will be the job that they need to have done?

 Give some thought to the person you would call tomorrow if you had to put groceries on the
table this week. What event (trigger) would have happened for them to need your
product/service? This can sometimes just be a description of current customers and prospects. I
often time just clip the top of the LinkedIn profiles of people to make a vision board out of the
process.

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Business901

 This is the Gap that sales & marketing must overcome.

Next, after viewing that ever so slight gap, I just proposed, start looking at the difference the jobs that
your product/service will be used following the outline below.

 Instead of thinking about the product and the features and technological superiority define our
offering by customer needs or the job that it will do for them.
 Think about not only the job that the product will do but which customers are the unhappiest
with their present solution. Opportunity is based on how important is the problem worth solving
and how satisfied they are with present solution.
 Think of how we will articulate value = benefits relative to price.
 (Direction + or -) (the unit of measure) (outcome desired)
 Minimize (direction) the time (unit of measure) it takes to change a tire (outcome desired). This
is an example of how we can determine value. The more relevant this is to the
person/Organization/market we are addressing determines the success of our marketing.
 Think of how we will educate our customer along their journey. This will help us determine the
marketing content that we need and the best way we can construct it. Very few times will we
engage with a decision maker initially nor do we want to. We want to find the path of least
resistance.

Now, we have reached our current state persona and our future state. Now ask, who could Joe
introduce you to that would bring you one step closer to having a conversation with Bill, your future
state?

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Business901
I would challenge you to use pasted LinkedIn profiles and start with your present customers and follow a
chain of customers, vendors, affiliates, distributors, boundary partners and network your way to Who
you want your customer to become. This paints an overall picture of what you need to achieve in your
future marketing.

However, getting back to reality and those groceries today, sit down and put realistic and some not so
realistic objectives to each persona maybe even doing some at the lowest level, but any objective can go
into any persona, key account, market segment. Map out your present sales channels, trying to keep in
mind who influences who.

This result in marketing efforts being created for real people, real personas versus vague and non-
connected groups. We look to the edges finding the most identifiable and receptive edge we can find to
engage in creating a conversation.

Skype: Biz901 Email: jtdager@business901.com

Business901
Taking Edges and Building an Engagement Funnel

The concepts first delivered to me by Jon Hagel in The Power of Pull: How Small Moves, Smartly Made,
Can Set Big Things in Motion, and later emphasized through the use of Explore-Do-Check-Act (EDCA) has
served me well with most customers. Looking at the edges of markets and customers is where I find
opportunity. The difficulty in implementation is the allotment of budgets and time for each component,
SDCA – PDCA- EDCA, in conjunction with the needs of the organization. There is also a team component
part to it which I discussed in the eBook, The
Lean Engagement Team .
Explore
If we can start thinking about our prospects
and partners like this, it will allow us to work Engage
from a funnel of opportunity versus funnel of
depletion. We start with what is known and Empower
work outward, never making a cold call 200
always making a warm call. Always building Empower
upon what we know, empower existing Top 50
customers, engaging prospects, exploring
new. Doing it this way we can quickly test Empower
new ideas, new methods in small groups and Top 5
build upon the information we receive.

Quick overview on developing our sales circles (numbers are arbitrary)

1. Top 5: Organizations that we need to connect with on a regular basis, 3 to 4 times a month
minimum.
2. Key 50: 50 that represent significant value. May not even be a valid lead but one that would
lead to a connection. These need to be nurtured as much and developed as a lead is.
Connect with a minimum of 1 to 2 times a month.
3. The Top 100: Look at seeing interest to develop into a Key 50. Always looking to extend
conversation within an organization. Include industry contacts and connect with 1 to 3 times
a quarter.

I usually capture this information on a Trello Board and will have a card for each of the hi-level (Top 5)
customers on the board and then as I go down the line, I will collect groups of customers/prospects
often times linking just their profiles in our CRM. I might make multiple Trello boards for each of my
segments; Empower, Engage, and Explore. Once linking down to further boards creating an entire CRM
out of the process. But the most important item of note is that we work and organize the board from
right to left, not left to right.

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Business901

The 5/50/200 numbers are of course just arbitrary. A sample build is below:

Empower
Top 5 Customers (Empower Advocacy):

1. When we think of these, we need to build the appropriate persona. The first thing we do is
just to capture our top 5 and think of the people that we work with at these companies.
2. What can we do empower them more?
3. Are they using all of the products?
4. Do we understand their customers?
5. Are actively engaging and participating in the events they attend or hold?
6. What vendors do they use that might partner with us?
7. What marketing tools do we use for this group?

Top 50 Customers (Exploit):

1. When we think of these can we segment into different groups (finance, educational, etc.) and
build the appropriate persona.
2. What can we do to empower them more?
3. Are they using all of the products?
4. How are they similar to others in the top 5, other 200?
5. How are they different?
6. What vendors do they use that might partner with us?
7. What marketing tools do we use for this group?

200 Remaining Customers (Explore):

1. When we think of these can we segment into different groups (finance, educational, etc.)?
2. Do the previous personas (50) fit with this 200?
3. How are they similar to others in the top 50, How are they different?

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Business901
4. What can we do to empower them more?
5. Are they using all of the products?
6. What marketing tools do we use for this group?

Engage
Top 5 Prospects (Export) (I arbitrarily picked this number):

1. When we think of these can we segment into the previous groups (finance, educational, etc.)?
2. Do the previous personas (200) fit with this group?
3. How are they similar to others in the top 200, How are they different?
4. What can we do to exploit (in a good way) them more?
5. What products are they interested in?
6. What marketing tools do we use for this group?

Top 25 Prospects (Exploit) (I arbitrarily picked this number):

1. When we think of these can we segment into the previous groups (finance, educational, etc.)?
2. Do the previous personas (5/200) fit with this group?
3. How are they similar to others in the top 5, How are they different?
4. What can we do to exploit (in a good way) them more?
5. What products are they interested in?
6. What marketing tools do we use for this group?

Top 100 Prospects (Explore) (I arbitrarily picked this):

1. When we think of these can we segment into the previous groups (finance, educational, etc.)?
2. Do the previous personas (25) fit with this group?
3. How are they similar to others in the top 200, How are they different?
4. What can we do to exploit (in a good way) them more?

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Business901
5. What products are they interested in?
6. What marketing tools do we use for this group?

Explore
Top 50 Prospects (Export):

1. When we think of these can we segment into the previous groups (finance, educational, etc.)?
2. Do the previous personas (in Engage) fit with this group?
3. How are they similar to others in the to the Engage prospects, How are they different?
4. What can we do to move them to the next group them more?
5. What products are they interested in?
6. What marketing tools do we use for this group?

Top 100 Prospects (Exploit) (I arbitrarily picked this):

1. When we think of these can we segment into the previous groups (finance, educational, etc.)?
2. Do the previous personas fit with this group?
3. How are they similar to others in the top 5, How are they different?
4. What can we do to exploit (in a good way) them more?
5. What products are they interested in?
6. What marketing tools do we use for this group?

The world (Explore) – this more general marketing, SEO, SMO, Positioning:

1. When we think of these can we build segmentation into the groups (finance, educational, etc.)?
2. Are we in the right segments, is our message being heard?
3. What can we do to exploit (in a good way) them more?
4. What products are they interested in?
5. What marketing tools do we use for this group

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Business901 SWOT – Strength, Weaknesses, Opportunities, and Threats

What if we utilized as I mentioned above for purchasing, to explore our Key Customer’s Key Accounts?
Would that not allow us to anticipate and react better? Provide better forecast? What if our non-key
accounts were the group to a SWOT Analysis? Would help to assign salespeople and other resources?
What if new customer acquisition were driven by a SWOT analysis? Would we adjust to better customer
management? Would we have a better way to anticipate their needs and maybe even “Challenge” their
direction?

We learn and grow throw the edges, and as we create

and become more knowledgeable around the edge to
include both Vendor and Customers, we will find more
opportunity. Using SWOT gives us a proven method of
exploration and capturing this information consistently
across our community. It aligns the edges quicker and
more effectively to the core than any other method that
I am aware of. As a result, we can put it to better use.

In a past blog of mine, Growing your Company thru

SOAR, I discussed the uses of SWOT (Strength-
Weaknesses-Opportunities-Threats) outside the regular
marketing realm and added some other areas as throughout the organization and also in Key Account
Management. I also alluded to the regular practice of using SWOT simply as a 4-quadrant matrix that
most of us have become accustomed. This far too prevalent method turns SWOT into nothing more than
a brainstorming session and with little execution. An example is the picture above.

A SWOT should be carried out for several areas within our organization:
 For the organization as a whole (I also like to use SOAR)
 For each major Product(Service)/market segment
 For major competitors
 For Key Accounts
 For Key Accounts Markets

As you can see in PDF, the actual SWOT part does not start till we have addressed and weighted the
critical success factors for the Strengths/Weaknesses analysis. This first step is key in developing a
proper analysis. If we do not address these factors, your SWOT will not be anything more than a
brainstorming session and with a slim chance of moving the needle in the marketplace. The Excel Sheet
automatically tabulates the factors as you put them in.

Completing this analysis of Strengths/Weaknesses, we are prepared to view the Opportunities/Threats

that the outside world influences. Areas that have or will continue to impact our business. After the
SWOT is done then and only should we decide on the Key Issues that need to be addressed.

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Business901

Completing this exercise, we proceed with noting the key assumptions we have made in formulating this
analysis. Doing this before we list our key objectives and strategies is sort of a gut-check on our analysis
before we decide on the key objectives (From what to what by when) and Key strategies (How will we
do this?). The last block is assigning some type of financial measurement to meeting a particular
objective. We may consider that even more powerful than a gut-check.

This method was adapted from Marketing Plans for Service Businesses, Second Edition: A Complete
Guide by Malcolm McDonald. There are a few other items worth noting that Professor McDonald
recommends and I considered putting on this sheet. One is to do a Risk Analysis for the
Opportunities/Threats section. For some customers, I would definitely include this. However, I have a
tendency to ignore this when it is just a guess without any real analysis being done. The other item that I
would include for background information is a summary of each element (S-W-O-T). It would look
something like this:

The SWOT Element_________ which means___________ so the action needed is ________

An example of this using a Threat Element: Increased competition which means a loss of market share,
so we will need to increase advertising.

Of course, we may have multiple ways to address competition and would create several statements
around that element. We would, of course, do this for all the elements listed. This process makes us
work through the analysis and ties it all together. I would recommend that we do this after the SWOT
has been completed.

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