Theory of Constraints Handbook - James Cox Iii [415]
To determine if the issue is a market constraint or a sales process constraint, we need to determine how you would answer another question—why should I buy from you?
Imagine that you just walked into a hot prospect’s office and the prospect said, you’re the third vendor I’m interviewing today so let’s cut to the chase and just tell me—why should I buy from you? Why should I choose you over the others?”
Before you continue reading, please write down the reasons your customers and prospects should buy from you. Make a list.
I’ve asked this question around the world and have collected many answers along the way (Smith, 2006, 100).6 However, there are themes that tend to repeat. Most people answer the question with something like this:
We have outstanding quality and it’s better than the competition.
We have a great reputation.
We get good results for our customers.
We have very knowledgeable, great employees with low turnover.
We’re very responsive.
We’re very innovative, helping our customers to …
You can trust us.
Some version of that is what most people write on their list. The list might vary slightly depending on your industry. However, it typically does not vary much between you and your competitors. And that’s really the point.
If you’re saying the same things as your competition, then you’re not really providing any compelling reasons. Therefore, you sound the same as your competitors.
Moreover, what do you typically do if you have heard something before? Do you sit up and listen closely, hanging on every word? Well, if you are like me, you tune out. They might as well be saying blah, blah, blah … because that is what you are hearing.
Therefore, if I’m a buyer and you and your competitors are saying some version of the same thing, then I might as well choose who to purchase from based on price. In addition, even if you are truly different or better than your competition in some way, it doesn’t really matter if your prospect doesn’t get it. A cute little tag line7 is not likely to change my mind or help me to get it.
As long as you sound the same as your competitors, we must assume that your constraint is a market constraint. In other words, if you have not convinced your prospects that what you provide is of greater value relative to the price you are charging and of greater value than the competition, then why would they buy from you?
Only after you have a good offer, a Mafia Offer, and you are delivering it correctly and your sales are still not increasing, can we determine that you might have a sales process constraint.8 Therefore, we need to start by creating a Mafia Offer. A good Mafia Offer delivered correctly is the solution to a market constraint.
Developing a Mafia Offer
To develop a Mafia Offer, there are three things that we need to consider.
1. Your Capabilities, Both What They Are and What They Could Be, Compared to Your Competition.
Your capabilities are how you deliver your product or service. For example, what’s your lead time? Your due date performance? Your quality? Your answers to these questions are your capabilities. Typically, when we first start working with a company, their capabilities are similar to those of their competitors. If they were much better or much worse, they would know.
If you’re quoting a 6-week lead time, typically your competition is also quoting a 6-week lead time. Your prospects make sure that you know if someone is quoting a better deal. So typically, everyone in a niche quotes similar capabilities to ensure they don’t lose opportunities. Moreover, of course they would quote better if they could actually deliver better.
To determine what your capabilities could be, we rely on experience with the TOC logistical solutions. To give you an idea of possible results, see Fig. 22-1. From Fig. 22-1, if you were quoting a 6-week lead time, we can expect a 70 percent reduction or a lead time