Theory of Constraints Handbook - James Cox Iii [426]
It is common for our clients to have one or two offers for the products or services they sell in the markets in which they participate. However, there is no right number. If you need to decide which product or service and which market with which to start, you can use the same questions that we listed before:
What market do we want to grow?
What market has the best margins?
Do we have too much business with one customer or in one market?
Which customers or types of customers do we dread? (If our competitors also dread these customers, they may be more easily acquired.)
What market has tons of room for us to grow?
Mafia Offers can be aimed at others besides your customers and prospects. You can create Mafia Offers for your vendors, your employees, your bank, your partners or affiliates, or for whomever you choose to target.
Once you start thinking along the Mafia Offer lines, you will also find it useful to ask, “Why should anyone you interact with do business with you?” This line of thinking will help you to make sure that all the interactions you have are as good as they can be. For example, if you want to start using Twitter, my question for you is, “Why should I follow you?” If you approach Twitter18 with the answer to this question in mind, you will be more successful at getting followers. Similar comments can be made about your personal interactions as well.
There is no limit to the number of offers you can develop or to the amount you can increase your sales. In addition, Mafia Offers are possible for the majority of companies. The reason that most companies don’t know that they have one or know what it is, is because they just don’t know how to develop them.
Can You Create a Mafia Offer?
If you read Dr. Goldratt’s (1994) book, It’s Not Luck or one of the other TOC books, you are familiar with how we use cause-and-effect logic (also called TOC Thinking Processes) on your customers, your industry, and your company to create the offer.
Historically, to develop a Mafia Offer you had to hire a TOC expert and spend about 2 weeks creating your Current Reality Tree, Future Reality Tree, and then your Prerequisite and Transition Trees. It is time-consuming and expensive but absolutely worth it.
As I’ve worked with clients, I’ve noticed that the majority of the population has a tough time building logic trees. They can understand them, but building them can be a challenge. Therefore, we tried another approach and have had success with a process19 that uses the logic without requiring the building of trees. So can you create a Mafia Offer? Yes, if you can delve into the logic from your customers’ perspective.
In It’s Not Luck, Dr. Goldratt develops three offers for three different companies (printing, cosmetics, and steam) in three very different environments. One was for a printing company and it was based on the price per quantity curve industry practice. Despite that, and despite the fact that all the logic is laid out, printing companies don’t imitate the offer.
Even if you have trouble with the logic, you probably know enough about your industry and customers to create an offer. It’s not only the logic that can be tough, but also seeing what your industry practices are. You may need an outside resource or fresh eyes to help you identify your industry practices.
Another resource that you may find helpful is the Mafia Offer templates. As with any template, there are pluses and minuses. On the plus side, templates can save time and give you some ideas about what your offer might be. On the negative side, because a template exists, you may not do the full analysis and come up short, or the offer doesn’t work because it didn’t fully apply and you didn’t do the analysis to understand how to modify it.
We don’t use templates in our Mafia Offer Boot Camps.20 Instead, we do the full analysis for each company and market. It takes 2.5 days, but the mistakes are limited. So, use the templates if you must, but do the full analysis and