Lean Marketing & Product Development

Lean Marketing and Product Development by Walter McIntyre

Lean principles apply to any process based operation. I cannot think of any process that does not have non-value added components in it that create the opportunity for waste production.  In fact, by definition, a non-value added component in a process is waste.

Let’s take marketing for example and do something called lean marketing. Please remember that in a post of this size, I am leaving a lot to the imagination. Some businesses have marketing programs that start with the product/service and move outward to the customer. They call this customer focused because they do eventually think about the customer. This is not all bad because the customer is a part of the equation. The problem with this approach is that it is self-limiting.  In effect, it allows the product/service to define the target customers and, as a result, becomes growth limited by this boundary. This is the waste of missed opportunity

To balance the marketing equation, the business needs to also think in the opposite direction. That is, starting with potential customers and moving to the product/service. In this approach the potential customers defines the product/service and, as a result, is not limited by an artificial customer segment boundary.

In more detailed terms, in the product first scenario, the business defines the product/service, the price, and how it will be delivered.  Once these definitions are made, the business promotes the product or service to a targeted customer segment. As you can see, the product/service is defining the targeted customer. In a lean marketing program this is phase two, not phase one.

In the customer first scenario, the business connects with potential customers across multiple segments and establishes what the customer’s value (are willing to pay for), customer cost (price they are willing to pay), and how they expect the product/service to be delivered. Here the potential customer is defining the product. In lean marketing, we would now go the product/service side of the equation and build out to the customer.

Additionally, every business needs to realize that with the internet and social media, potential customers can easily compare products and services across multiple suppliers. This means that they can easily find the product or service that best fits their wants/needs. By using the product/service to define the customer, the business self-eliminates from non-targeted potential customers.

If instead, the business first allows potential customers to define the product/service (phase one), the product/service can be tailored to fit different customer segments (phase two).  This in turn allows the marketing program to be tailored to target multiple customer segments. This tailoring takes advantage of the internet and social media by addressing the specific needs of different customer segments.

I look at this as an application of Deming’s “Plan-Do-Check-Adjust” cycle. Define the potential customer’s needs, apply what you learned to the product/service, evaluate market effectiveness, and use the evaluation to find improvement ideas. This process is like a wheel that continually turns over and over again throughout a product/service life cycle. The result is better performance and a longer product/service life cycle by way of waste reduction.

As a final note, this approach is synchronized to the development process. The PDCA cycle, focusing on the customer first, will help to prevent misunderstandings (waste) and missed targets (waste) because the customer becomes a key part of the development process. The more times the PDCA wheel is turned in a development project, the more input the customer will have, the less likely the development team will miss the target. The target in this case is the right product/service being delivered to the customer at the targeted project cost and profit margin.