The Next and Final Lean Frontier

by BILL WADDELL

The one group that has been allowed to opt out of the lean transformation has been Sales & Marketing – and that is about to end.

 We have lean manufacturing ad nauseum, TWI summits and lean accounting.  The boys and girls from the Lean Summits are launching one on lean logistics, and there are a number of forums on lean product development.  And of course there is lean office to cover all of the administrative functions and processes.  Sales & Marketing, however, have been able to hang on to their unique status as a group apart and remain uninvolved.  Given that they are the primary link to the customers, and the basic objective of lean thinking is to create superior value for customers while minimizing waste – defined as everything and anything the customers won't pay for, the days of allowing Sales & Marketing folks to keep tripping along their merry, old school ways are rapidly coming to an end.

The driving idea behind sales and marketing in the old model has been to control the message – define the brand – shape customer perceptions – in short, to spin the reality of the product into an image that would convince people to but something they may or may not really want or need, and to convince people that the product was better than it really was and better than the other guys'.  That doesn't work any more.

Perusing the most recent issue of the Brandz Top 100 Global Brands Rankings, just how thin the old thinking dominating sales and marketing has become is rather apparent.  Right up front they make the statement, "The role of the brand is growing in today's uncertain economic environment, people need something they can trust and increasingly they are turning to brands."  I think that falls under the category of repeating a lie often enough in hopes that people will eventually believe it.  They are trying to convince someone – themselves maybe – that things haven't changed.

The whole premise of the brand value is nonsense from the get go.  They assume that the value of the brand is in the brand itself – the name of the company or product has value - rather than the product itself.  It is increasingly apparent that the 'brand' is only as valuable as the last product sold under that name.  The Toyota 'brand', according to these guys is worth 27% less now than a year ago.  On the other hand, the Visa 'brand' is worth 52% more.  It is pretty common knowledge that the Toyota 'brand' is a function of their equivalent of the Edsel and the Corvair wrapped into one – nothing to do with the name, and everything to do with the dog of a car they sold.

The Visa 'brand' is not more valuable because of anything Visa has done so much as it is the fact that the use of debit cards is exploding.  That's why Mastercard is up 57% too.  Nothing to do with the brands – everything to do with the expanding application of the products.  It is somewhat misleading – a whole lot misleading, in fact – to insinuate that Visa is up 52% in value because of 'brand management'.

The big lie in the opening blather about people 'increasingly turning to brands' is set on its ear within their own report.  "The recession hurt the growth of premium coffee brands and led to a consumer drift to own label."  What – "own label"?  What happened to "something they can trust"?  Then we have the self-fulfilling prophecy approach … "Tesco promoted a discount "own label" (store brand) without diluting its mid-market brand positioning.  That effort helped the UK grocer achieve a 12 percent increase in brand value."  So by rejecting brands, Tesco became the 'brand'.  Some logic in that, I suppose, but hardly the sort of 'brand management' the sales and marketing folks have come to know and love.  More like running up to the head of the parade so you can look like you are leading it.

It goes on and on … "Price conscious consumers were willing to trade down and even out of a brand, sometimes to its own label, especially when drinking spirits at home" … "Consumers select a brand for the reassurance of authenticity, quality and value it provides.  House brands are increasingly filling those needs ..."   The bottom line is that it is not about brand management, it is about product management – designing and making them.

The biggest change in sales and marketing is that they get less and less control of the message.  There was a day when they could concoct any story their imaginations allowed.  Now the customer controls the message more and more.  P&G tried to stroke maternal emotions with their sappy Mother's Day website.  Instead they are battling a PR fight of epic proportions as those mothers want to know why P&G diapers gave their kids painful rashes and burns.

Simply put - make products that sell at a good value proposition and the brand will take care of itself.  Worry about the brand as a stand-alone entity as these folks seem to and be prepared to face an angry mob of customers on Facebook and elsewhere.

More ominous is Ad Selector.  When the marketers couldn't force folks to sit through their TV ads any more, thanks to TiVo, they have attempted the same on the Internet with the annoying ads you have to sit though to see any video news coverage.  With Ad Selector, people still have to sit through an ad – but they get to choose which ad.  A marketer better come up with ads that are either very informative or very funny as they have to compete with other ads for customers' attention.

It all boils down to an end to games, spin and nonsense – and the beginning of an age in which value is the controlling factor.  The customers define the issues and form their own perceptions.  The role of sales and marketing in the lean enterprise is to clearly understand how the customer defines value – what they will pay for and what they won't – and to deliver that message back throughout the organization.  In short, they have to join the team – no more cowboying out there as some independent group, oblivious to the realities, limitations and capabilities of manufacturing and engineering.  Creative writing and multi-color art work won't deliver value.  Good products that fulfill customer requirements at a price that includes a minimum of waste is the key to success – and even survival.

Time for sales and marketing to get out of the clouds and into the lean game.  They have to start listening closely to customers instead of telling customers what to think, and then conveying that customer message back to the rest of the company in a clear and comprehensive manner.