Lean sales&mkt

2010
   

BMA Inc. Cherry Hill NJ by Brian H Maskell
 

LEAN SALES & MARKETING 
The starting point of all lean thinking is a clear and profound understanding of how we create value for the customers through our products and services. The sales and marketing personnel are in the vanguard of this vital aspect of lean.  

Lean Sales & Marketing

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Lean Sales and Marketing
WhileSales and Marketing are often considered a separate topic, it’s a mistake to think of these vital functions as of outside Lean Thinking. Lean organizations focus on the first principle of lean, namely Customer Value. The starting point of all lean thinking is a clear and profound understanding of how we create value for the customers through our products and services. The sales and marketingpersonnel are in the vanguard of this vital aspect of lean. Lean Accounting has a great deal of bearing on how effective these important aspects of the lean organization are. Figure 1 (below) lays out the concepts associated with Lean Sales and Marketing, which we will be covering in this article.

Value-Based Sales and Marketing Concepts
Many of the characteristics of a lean approach to sellingand marketing products and services are impacted by the value-based approach. If we recognize that a correct assessment and outworking of customer value is an important – perhaps the most

© 2010 BMA Inc. All Rights reserved. 100 Springdale Road #110, Cherry Hill NJ 08003 USA Tel: US +1 609 239 1080 Europe: +44 203 002 8495 Email: information@maskell.com

Lean Sales & Marketing important –aspect of lean thinking, then our approach to the customer will radically change. In reality, most companies have sales people who take a value-based approach intuitively. They recognize that to win new business and grow the company, it is vital to understand what creates value for our customers and to use this knowledge to develop appropriate products and services that maximize customer value.They also recognize that prices must be based on the value created for the customer. While many companies continue to pursue the age-old fallacy of cost-plus pricing, savvy sales people recognize that the customer will only pay a price that matches the value the customer places on the products and services provided. Further, they know the customer does not care about what it costs us to make theproduct or provide the service. The only major exception to this rule is government contracting. Government contracts are sometimes priced as a percentage uplift from the supplier’s product costs; but even the government is moving away from this approach in recent years. While many sales and marketing people intuitively address the customers and markets from a value viewpoint, lean organizationshave standard and systematic methods of focusing on customer value throughout the entire organization and have methods to calculate the value created for the customer by the company’s products and services. Customer value is widely understood throughout every aspect of the company’s business is and is the primary driver of decisions and of lean improvement. But, there are cases when the customervalue focus is lost. In a recent article in The Wall Street Journal, a large well-known hospital system was bemoaning the fact that many of their patients1 come to the Emergency Room for treatment on weekends. The hospital administrator stated that the Emergency Room treatment is much more expensive than a regular visit to the primary care clinic, and that these behaviors are
.Is it too simplisticto observe that industries with a record of very poor service to their customers often do not call a customer a “customer?” They use euphemisms like patient or passenger or tax-payer or (in the case of software) users or even seats.
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© 2010 BMA Inc. All Rights reserved. 100 Springdale Road #110, Cherry Hill NJ 08003 USA Tel: US +1 609 239 1080 Europe: +44 203 002 8495 Email:...