Wednesday, August 13, 2008

A Process Of On-Going Improvement (POOGI) - Part 23

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints.

Last time, we discussed how having a "Mafia Offer", an offer so good that (1) your customers can’t refuse it and (2) your competition can’t or won’t match it -- had the potential to dramatically increase sales.

A Mafia Offer is another “technology” that is part of the Theory of Constraints (TOC), a holistic business process improvement body of knowledge developed by Dr. Goldratt, author of The Goal.

TOC is especially effective in machine shops. In fact, it is usually possible to develop an excellent Mafia Offer for a machine shop, especially if your competitors have long lead-times and poor due-date performance.

Here’s a test: do you and your competitors’ quote lead-times that you know have a low probability of being met just to get the order? If so, you have an excellent Mafia Offer. Would you like to find out what it is?

The process of implementing the internal changes a Mafia Offer requires is not trivial, but doing so improves sales closing rates from less than 5% to as high as 80%. Typically, additional sales people aren’t required, but sales funnel management is.

Why? Because having a Mafia Offer doesn’t address the following issues with your sales process:

  • Prospects aren’t aware of you
  • You aren’t aware of enough prospects
  • You have difficulty getting in to see your prospect
  • You have a long sales cycle
  • You have difficulty quoting as many jobs as you would like
  • Quote turnaround is too long
  • There are peaks and valleys of booking sales.

Sales funnel management begins with realizing that sales is a process. As Dr. Deming said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing”. Many companies abdicate selling activities to individual sales people, and then have understandable difficulty managing and measuring sales performance and effectiveness. be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

NEXT Group Mafia Offer Boot Camp: September 24, 25, 26 2008 in Denver. More information at There are also PRIVATE and On-line Mafia Offer Boot Camps. The July boot camp SOLD OUT and there is no group boot camp in August. Don't miss September!

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): September 23, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at You can register by fax or on-line.

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