Achieving sales growth in the fast-paced, ultra-competitive environment where many companies operate requires continuously adjusting and improving the systems that comprise the sales and marketing machine. With competing internal interests, as well as limited time and resources, prioritizing this work can be challenging—and poor prioritization can ultimately lead to waste, missed opportunities, or both.
Thankfully, there are a number of Lean-Agile tools for continuous improvement that work very well when applied to customer acquisition and customer experience. The more such tools your business has in its toolbox, the better equipped you’ll be to identify priorities and eliminate waste.
One tool often used by Lean practitioners (though not technically from Lean Manufacturing) is what’s known as the Theory of Constraints or TOC. The premise is simple: If a system operates without any constraints, it will generate value (the desired output or goal of the system) in increasingly greater amounts, indefinitely. But of course, no system ever operates completely without constraints. There is always a limiting factor, which when removed will unlock value until the next constraint is reached, and on it goes.
This methodology originates in the world of manufacturing, but it can be a useful tool when thinking about your customer acquisition strategy. After all, if the sales and marketing departments are responsible for manufacturing new customer relationships; then the Theory of Constraints can play an important role in prioritizing work and allocating resources.
But what are we talking about when we talk about constraints? A constraint is any bottleneck in the process, any artificial ceiling that prevents your sales and marketing machine from working at maximum capacity. An outdated sales sheet is not considered a constraint but having no marketing assets for a new product launch is. Being temporarily short-staffed on your content team is not a constraint but having no content team or strategy could be.
Constraints can be separated into two main categories: Internal and external. Internal constraints can be further broken down into subcategories such as tools, data, assets, people, skills, policy, time, etc. The constraints in this category are typically within the control of the organization, and thus are actionable.
External constraints include things like the regulatory environment, competition, substitute products, third-party logistics providers, and more. These are important to consider and in some cases, you can influence them, but they’re usually not as clearly or directly actionable. As such, the benefits of the Theory of Constraints framework are best realized when you focus on internal constraints.
Constraints and Customer Acquisition
How then can the Theory of Constraints apply to your customer acquisition strategy? Every company has a unique approach to acquiring and retaining customers, but the familiar AIDAS framework provides a good general understanding. AIDAS stands for Awareness, Interest, Desire, Action, and Satisfaction. Within each of these stages of a customer’s journey, sales and marketing teams employ tools, tactics, and processes to help the customer move from stage to stage toward purchase and satisfaction.
As an example, a company may feel they aren’t capturing enough qualified leads; this system is constrained somehow. They examine this system for capturing qualified leads from their website as a possible area of improvement. Their current strategy involves offering visitors to the site a free download of a white paper, in exchange for acquiring a customer’s contact info. The constraint on the system for capturing these leads on their site may be that some visitors aren’t interested in the topic of the white paper or perhaps visitors are interested in the white paper but are being asked to provide too much information and thus are abandoning the process. Or perhaps the white paper isn’t being promoted heavily enough through offsite channels. Or perhaps the issue is something different altogether.
In this example, the TOC helps management to separate the “What,” “Why,” and “How.” What system is being constrained? Why is it being constrained? And how can we break the constraint(s)? The Theory of Constraints doesn’t provide answers to questions as much as it prioritizes questions and aligns thinking. It is a diagnostic tool that can effectively bring focused continuous improvement to complex systems.
This last part is key: Continuous improvement. In any system, when a constraint is broken, value is unlocked only until the next constraint is reached. As well, breaking a constraint in one system can apply additional stress to connected systems and expose additional constraints. Using our example above, if suddenly the website is producing twice as many qualified leads, the inside sales team may struggle to keep pace.
Achieving sales growth often requires developing, maintaining, and continuously improving complex interconnected systems. As complexity grows, managing your systems becomes an engineering exercise. And thus it stands to reason that tools from the manufacturing world can become very useful. At Lenses and Levers we understand this, and our toolbox is full. We’d love to chat with you about some of the constraints that may be impeding your systems, and to brainstorm some ideas for breaking them. Reach out to us if ever you’d like to talk.