What is the exact role of each department in an optimized organization?
How can departments help each other create synergy?
How should each department be measured?
As it turns out,
In many companies the answers to those questions are not so simple.
In too many:
- the management is setting some business objectives
- Each department is working on her own, Trying to do what she thinks she needs to do
- And at the end of each quarter the management is trying to understand what exactly happened & what is the relevant contribution of each department
In this Short & Focused article I will try to answer those questions
And suggest a model that will clearly define:
- What is the exact role of each department.
- How should each department performance be measured.
The beginning of everything
The basic requirement for any successful organization is to really know the business reality that within it lives, breathes and create value.
The most important things you MUST deeply know about your customers, competitors, business partners and your own company.
I have written a detailed article
If you haven’t read it yet
I highly recommend you read it now: How to Fully Understand your Business Reality >>
If you have, so You’re already know:
- Your customer’s Job-To-Be-Done, Specific Context and Game-Changing-Success-Parameters
- Your real competitors ( including the potential Out-Of-category disruptors)
- Your own company secret sauce
- The business partners that leverage your core and cover your weaknesses
And we can start discussing about each department
There are so many people in the world,
Each is trying to accomplish certain “Jobs” in specific Context
But your product/service can only help with a certain “Job” with a certain Context.
This is why your marketing should be focused on people focused on that Job-To-Be-Done & Context
How should you communicate with those prospects ?
In the research stage, you’ve concluded the customer’s Game-Changing-Success-Parameters and you also documented the words and phrases they use from their own Point-Of-view.
Now it’s time to use it when developing the value proposition and every other copy in your acquisition funnels or inside your productEffective Value propositions should be based on the customer’s own Game-Changing-Success-Parameters Click To Tweet
Another important point to think about is that the prospects are already currently using some solution for that job and they actually need to switch from the current solution to your new solution and switching between solutions is actually a BIG decision because they are actually considering:
- Money & Time – to implement the new solution
- Risk – things that the new solution will not support, possible errors it might create,…
- Emotion – This is very complex, for example: concerns from the new solution ( they already know the problems & limitations of the current solutions and learned to live with them), “Nostalgy” for the current solution ( believe it or not !!! ), Concerns of how they personally be affected ( they are currently the experts of the current solution)
So your marketing should also address those concerns by minimizing them.
How should Marketing performance be measured?
- A = Total number of prospects who came to try the product – the exact event should be decided in each company – is it the number of people who reach the website home page ? the signup page? Succesfully signed up? Other event?
- B = % of those prospects who are struggling with a job that your product helps with – it’s not relevant if the customer is man or woman, if he is young or old or any other demographic. The only thing that matters if he is trying to get the right “Job” done. Is he trying to drive from X to Y ? Is he trying to find a romantic partner ? is he looking for excitement ?
- C = % of those prospects who face the specific context that your product was optimized accordingly – from the people who try to accomplish the job of “drive from X to Y”, some are on their daily commute and wants to arrive at time, some are with their family on vacation in a foreign country and wants to enjoy sight-seeing.
Relevant Prospects = A * B * C
Marketing role is to maximize the # of Relevant Prospects in the given budget they have.
Once Marketing knows the JTBD, Context & GCSP,
They should get the total freedom to operate within the limits of the budget to maximize their goal by optimizing their decisions about Distribution of their budget between:
- countries ( and penetrating new countries & new markets)
- Marketing channels ( Media, SEO, Social, Affiliation,..)
- Business partners to access more customers/more market/greater penetration.
They should also be able to optimize their acquisition funnels ( If there is no CRO expert in the department it is highly recommended to hire someone or hire the services of an external CRO expert that can make a very big impact in a short time)
Let’s review the process:
- Marketing is bringing prospects who are trying to accomplish a certain Job in a certain context.
- Those prospects will become customers only if they decide to “hire” (buy) your product/service to help them.
- The prospects will buy the product only if your solution is helping them more then all the other available solutions ( from your product category or from other product categories !!!)
- They compare the solutions by reviewing how much each solution is satisfying their Game-Changing-Success-Parameters.
- Even when your solution is superior to all other solutions, They are already currently using some solution for that job and they actually need to switch from the current solution to your new solution and switching between solutions have a big cost like I’ve explained earlier in the marketing section
- After they already switched and became your customer, each day they measure the value they get!!!
Given all the above, in order for a prospect to become a customer your solution should:
- Provide them with a REMARKABLE UPLIFT IN THE GCSP !
- Minimize the Switching costs – you can do this by many ways, for example: Effective on-boarding, Ways to import the data from the current solution, Effective support / training, Clear & detailed information about the limitations & bugs of your solutions – when done right this will actually improve the conversion rate.
Your product should give the customer Super-Powers !!!
Let’s review some examples:
- Your mobile phone – allows you to communicate with anyone, no matter where he is in the world.
- Waze – let’s ordinary people who never visited a foreign country before, drive to anywhere just like any local.
- Tinder – let’s anyone looking for a romantic partner, thousands of possible candidates at the tip of their fingers.
How should product performance be evaluated ?
I recommend using both quantitative & qualitative :
- Quantitative – Measure the change in the GCSP ! if for example you are waze – and one of the GCSP is : “Minimize the time it takes to drive from A to B” – Than measure it ! how much time does your customer really saves by using your product ?
- Qualitative – use Polls, Surveys and Switch interviews to learn from prospects who just “hired” your solution and customers who just “fired” your solution.
We do need to remember that product performance is based on the marketing performance,
If product get a prospect that is
- Not trying to accomplish the job that the product was designed for – they won’t be able to give him any value…
- Trying to do the job but in a totally different context then the product was optimized for…it will be very difficult to give him any value…
As we saw in the previous sections,
Marketing role is to maximize the # of Relevant Prospects
Product Role is to maximize the value given to those Prospects
Business is responsible to transform the value prospects get into income streams.
Business role is to maximize the LifeTime-Value (LTV) of the customers
They do this with numerous ways & Techniques:
- Pricing & Packaging strategies – offering several levels/versions/products in different pricing levels – You’re invited to read more how to do it Using offer stacking, Decoy effect and other strategies >>
- Up-sale / Cross-sale/Down-Sale of other products/services.
- Identifying the customers with the most potential and focusing more resources and more attention to them.
- Improving Retention of customers and lowering the churn rate – by developing meaningful relationships with the customers, actively measuring customer satisfaction levels and more.
So…it is possible to say that the role of business
Is to maximize the revenue from each customer based on the amount of value he got.
The more value the customer got, the more revenue we expect to get from him.
One of the biggest challenges of the Business unit is to balance between the Short-term & the Long-term:
For each given customer – should they try to extract the most in the short-term ?
Or maybe invest for the long-term.
For a company in gambling,
- When they identify a customer that is constantly raising the deposit amount and bet amount
- If they focus on the short-term than this is ideal…he is losing more and more money.
- But if they think of the long-term they understand that very soon, the customer will experience a very big lose, one that will give the company money, but most likely he will stop playing and close his account.
- If they create some kind of “subscribers program” – that automatically bet for him each day/week/month in a lower amount – the pace of earning will be lower but this customer lifetime with the company will be much greater and most probably that in the long-term not only the company will earn much more but also he will be so satisfied that he will refer his friends.
This was a “teaser” article on a subject that is very challenging for many companies.
(apart from the companies who are sure that the role is obvious and might not be so optimized as they think they are 🙂 )
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