Theory of Constraints Mafia Offers: Dealing with a Market Constraint EXCERPT

Here is an excerpt from of Chapter 22 Mafia Offer:  Dealing with a Market Constraint of the Theory of Constraints Handbook. 

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Introduction: What Is a Mafia Offer?


A Mafia Offer sounds like something out of a movie, not something that could seriously help you make more money in your business by increasing and controlling your sales.

Dr. Goldratt first introduced the concept of a Mafia Offer in his book It’s Not Luck (Goldratt, 1994, 133). Later, he defined a Mafia Offer as “an offer they can’t refuse” (Goldratt, 2008, 67). But in writing, he more frequently refers to it as an unrefusable offer (URO; Goldratt, 1999, 120) and more recently he (and Goldratt Consulting) emphasizes the need to establish, capitalize, and sustain a decisive competitive edge (Herman and Goldratt, 2008).

For this chapter, I will use the term Mafia Offer and have defined it as follows: An offer so good that your customers can’t refuse it and your competition can’t or won’t offer the same. In addition, I will refer to the operational improvements required for a Mafia Offer as the decisive competitive edge, operational advantage, or competitive advantage.

A Mafia Offer is simply the offer you make to your market—your prospects and customers—to make them desire your products or services and something that your competition cannot quickly match. And, of course, the offer you make is a combination of your products, services, and how you deliver them. Moreover, for your offer—the solution you’re selling—to be unrefusable, you are most likely offering something of equal or greater value than the price you are charging.

Many people confuse a Mafia Offer with a unique selling proposition (USP), customer value proposition (CVP), or a sustainable competitive advantage (SCA).

At first blush, it would seem that a Mafia Offer is similar to these other terms; however, when most people are talking about these alternatives they are actually quite different from what TOC experts mean by a Mafia Offer.

USPs, CVPs, and SCAs take what you already do and state it succinctly and with more specificity aimed at one or a few of their customers’ problems or gaps in current market offerings. These alternatives can be Mafia Offers, but most of the time they are not. Furthermore, an SCA is, in my view, an operational or technological (although these are not typically sustainable) advantage and not an offer per se.

Most companies offer solutions that solve their customers’ various problems or symptoms.  With a Mafia Offer, we are addressing our customers’ core problem as it relates to doing business with our industry.

A Mafia Offer typically requires that you do something different (make operational improvements to establish a decisive competitive edge) to address your prospect’s core problem. These operational improvements allow you to actually deliver something unrefusable to your customers and something that your competition can’t or won’t do because they are not willing to or don’t know how to make the same improvements. In other words, you have to establish an operational advantage.

In this way, a Mafia Offer is a sustainable market offer built on this advantage. Mafia Offers are not a positioning or a tag line and “can only be created by satisfying a significant need of the market to the extent that no other significant competitor can” (Herman and Goldratt, 2008).  A Mafia Offer is where we start if you have a market constraint.
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Spend just two hours reading this chapter and if you don’t get at least one good idea for your business, contact me and I will give you a refund!

—Dr. Lisa

That’s a Mafia Offer and it’s real. The purpose of this chapter is to introduce you to the Mafia Offer—the Theory of Constraints (TOC) marketing solution. The chapter progresses from the discovery of what a Mafia Offer is, to the guidelines for creating an offer, to how to present an offer, and ends with how the reader can create their own Mafia Offer.

The best way to read this chapter is in order. Each section builds on the subsequent sections, so that when you reach the summary you will have a very good understanding of what we in TOC call the “Mafia Offer.”

Click here to get the BEST price for Chapter 22 on Mafia Offers! (this is for the DIGITAL version of Chapter 22, there is not a printed version of just Chapter 22).  Amazon offers this as a Kindle version but you DON'T need a Kindle to purchase and read it.  They offer Kindle readers for the PC, Mac, Iphone, Ipad, Blackberry and Android.

 

The PDF version is ONLY available here:  Mafia Offers:  Dealing With a Market Constraint

Copyright 2010 Science of Business

A Process Of On-Going Improvement (POOGI) - Part 22

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

You will possess a sustainable competitive advantage when you have value-creating products, processes, and services for your customers that cannot be duplicated or imitated by your competitors.

Having a competitive advantage, even a sustainable one, does not necessarily mean that you or your customers and prospects are aware of it. So, there is a need to create an Offer or positioning in the market that clearly states your competitive advantage. We call this an un-refusable market offer or a “Mafia Offer” (this term was originally coined by Dr. Goldratt). A Mafia Offer is an offer so good that (1) your customers can’t refuse it and (2) your competition can’t or won’t match it.

A Mafia Offer is NOT a list of strengths, a cliché, subjective, or offered by competition. In addition, it is sold differently. When you have a Mafia Offer, you are making a business proposal. A business proposal promises substantial improvements for your prospect, and it is appropriate to present at the highest levels of your prospects organization. A Mafia Offer addresses a significant need of your prospect in a way that your competition can’t or won’t.

Developing a Mafia Offer is not trivial, but having one improves closing rates from less than 5% to as much as 80%. Typically, additional sales people aren’t required, but sales funnel management is.

If you are interested in more information about developing a Mafia Offer, and the significant increase in sales and profits it can bring, we recommend you read “It’s Not Luck” by Dr. Goldratt. This book is the sequel to The Goal. It also is an easy to read novel that provides a story for the development of three Mafia Offers. Also, check out our website http://www.mafiaoffers.com/ to hear an example, find out how you can develop a Mafia Offer for your company, and learn about our Mafia Offer Boot Camp.

Next time, we will address managing the sales funnel once you have that compelling Offer.

...to 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 http://www.mafiaoffers.com/. 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!

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 http://www.viable-vision.com/

FREE Marketing & Sales Constraint Assessment Webinar July 28 from 2 to 3 pm Denver time. To register, just drop me an email with which date works best for you. We have expanded our seat limitation to 50 for each Webinar. Seats are filled on a first come first served basis and both sessions are already more than half filled.

A Process Of On-Going Improvement (POOGI) - Part 21

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

When asked about what is unique and different about their company, most people reply with some of the following typical answers:

• We provide great customer service
• Our quality is outstanding
• We innovate and/or help our customers to innovate
• We have great employees
• We deliver results
• We have a very knowledgeable staff
• We are responsive to our customer’s needs
• We have a great reputation
• Our customers trust us

Don’t your competitors say the same thing? All good companies have these qualities or they wouldn’t be in business for long. We call this the “blah, blah, blah” answer because that’s what is sounds like to your customers and prospects.

Your Mafia Offer is a sustainable competitive advantage that differentiates you from your competitors. It separates you from everyone else. It is usually the reason you are in business. It answers the question “Why should I buy from you?” or “How are you better that my current supplier?”

...to 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 www.MafiaOffers.com. 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!

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 www.Viable-Vision.com

FREE Marketing & Sales Constraint Assessment Webinar July 21 from 2 to 3 pm Denver time or July 28 from 2 to 3 pm Denver time. To register, just drop me an email with which date works best for you. We have expanded our seat limitation to 50 for each Webinar. Seats are filled on a first come first served basis and both sessions are already more than half filled.