TOC Thinkers

Q4 - Dr Lisa Lang

Q4. I see that you now offer your Mafia Boot Camps online.  I'm interested in signing up for my own business (You make a great pitch!).  Can you tell us how that works?
First, you should watch the Session 1 preview. During that session you can determine if you NEED a mafia offer. You can find that preview at www.MafiaOfferBootCamp.com.

If you do need one and you are interested, then watch the Informational Video at www.MafiaOffers.com (left column). This video explains the 3 types of boot camps – group, private, and on-line. It also explains the cost and our mafia offer to you.

There are 3 main deliverables for each boot camp participant. First we create your mafia offer. Second we create the collateral for your offer. And, third we develop your implementation plan – what you need to do BEFORE you go make your offer. This allows you to hit the ground running upon completion of your boot camp.

To ensure your success, included with the boot camp is 3 months of follow up, where we answer your questions, coach, and hold you accountable as you begin to implement. We also get to know you and your team better. That way if you want and need our help to implement your offer or to make the necessary operational changes, we can determine if you are qualified for our 100% results based option.

If you’re just interested in learning more, you can check out past blog posts I’ve done on Mafia Offers and our Mafia Offer Boot Camp. There are also additional videos on my website.

Theory of Constraints and Mafia Offers work, the key is to take ACTION! And now is really the best time to act – while everyone else is cutting back, you can take market share!

Q3 Dr Lisa Lang

Q3.  Without giving away too many trade secrets ... can you give an example of a Mafia Offer, explain how it was developed, and why it qualifies as a Mafia offer?

A3: Sure, but this will be the Cliff Notes versions since Mafia Offers are typically developed over 3 days in our boot camps.

Mafia Offers are developed by analyzing 3 things. 1^st what are (or could be) your internal capabilities compared to your competition. 2^nd How does your industry, you and your competitors sell what you sell. And 3^rd Understanding how your clients are impacted by your current capabilities (which are usually the same as your competitors) and how you sell.

Mafia Offers are specific to a company. So while an example would not apply to anyone reading, it is a good way to illustrate what a Mafia Offer is.

I have a client that sells custom printed labels. These labels are found everywhere on just about every product and are considered by many to be a commodity. Their quoted lead-times were 2 to 3 weeks and their due date performance was about 90%. We started with the operations and were able to get lead-times down to 2 days and due date performance to 99%+. Sales remained stable. This was significant since their competition was at about a 2 week lead-time and in the low 90% due date performance.

Next, we looked at how the printing industry sold labels. They used a price quantity curve. The more labels you order the less you pay per label. If you only want one label, the price is very high.

Then, we looked at how their specific customers purchased and used the labels because an offer is only a Mafia Offer if it is un-refusable to your specific customers. In this case, their customers were regional size food and beverage manufacturers. One customer was a coffee roaster who roasted many different varieties of coffee and sold them in several sizes so they need about 100 different labels.

Now when they looked at the price quantity curve they decided to order what was equivalent to 6 months of labels. To decide how to spread the quantity across the 100 labels they had to forecast what they would sell. But because their forecasts were always wrong, they ended up with too many of some labels while stocking out of the labels for the fast moving coffee. We know that this was happening because they would call frantic to get more of what they just stocked out of.

We also found that their marketing departments felt limited because they could only make changes every 6 months, after they worked through the inventory.

So we make the following offer:

Mister customer, don’t give me orders. Your orders are based on your best guess of what you might need. Instead tell us everyday what you used. We will guarantee on the one hand that you will not need to hold more than 2 weeks of inventory so you have more marketing flexibility and less risk for obsolescence and at the same time we will also guarantee that you will never run out. If we ever stock you out, we will pay you $500 per day per SKU.

That’s a Mafia Offer – best of all worlds for your customer and you will not pay a penalty because it only takes you 2 days to replenish. The competition can not offer the same thing because they can not consistently deliver in less than 2 weeks and they could not risk paying the penalty.

My questions for your readers are:

How much capacity could you uncover or do you currently have?

And what’s your Mafia Offer that will allow you to sell it – increasing sale and profits?

Q2 - Dr Lisa Lang

Q2.  Can you elaborate on what you mean by a "Mafia Offer"?  A lot of the people who've read this may not be familiar with Goldratt's approach to Marketing and Sales, even though I think it is the most fascinating and useful part of the TOCBOK.

A2: Initially Dr Goldratt defined a Mafia Offer as “an offer so good that your customers can’t refuse it”. I extended the definition as follows: “An offer so good that your customers can’t refuse it and your competition can’t or won’t offer the same.”

It has also been referred to as an “un-refusable” offer (URO) or a market offer.

At first blush, it would seem that a Mafia Offer is similar to other terms you may have heard of like an irresistible offer, a touchstone, brand positioning, a competitive advantage, a value proposition, or a unique selling proposition.  However, when most people are talking about these alternatives they are actually quite different from what I mean by a Mafia Offer.  They basically 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 many times they are not. And even so, they are still better than nothing which is where most businesses start.

A Mafia Offer typically requires that you do something different (make operational improvements) to actually deliver something un-refusable 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. 

Most companies offer solutions that solve their customers various problems or symptoms. With a Mafia Offer we are addressing our customer’s core problem.

In this way, a Mafia Offer is a longer lasting competitive advantage instead of just a positioning. 

When you have a good Mafia Offer and you deliver it correctly, your close rate increases to above 80%.  If you close 80% or more of your prospects -- you have control over your sales.  This control makes it easier grow and invest in your business while maintaining the ability to deliver the offer.

Q1 - Dr Lisa Lang

Q1: Tell me about Dr Lisa!

A1:  Hi Clarke.  Thanks for having me on TOCThinkers!

I'm the oldest of 5 girls and grew up in St Louis MO.  I went to a small engineering school, University of Missouri - Rolla on a fast pitch softball scholarship and majored in Engineering Management.

After completing my B.S., I was asked to coach the softball team.  I recruited, coached, and fundraised for 10 years while working on my PhD and also gaining some engineering experience at a Clorox Kingsford Charcoal plant. 

After 4 years with Clorox and completing my PhD I went to work for Anheuser-Busch.  I was one of the last employees of Eagle Snacks, worked at a distributor in Kauai, led the team that developed the A-B plastic beer bottle, and had responsibility for $1B of aluminium R&D among other things.

I'm still a BUD stock holder and do my fair share to keep sales increasing.

I currently reside in Golden, Colorado with my fiancée and TOC Expert Brad Stillahn at the base of Lookout Mountain.  For fun we ride bicycles and motorcycles.

I discovered Theory of Constraint is 1989.  While working on my PhD, I found The Goal and I was hooked from the beginning.  But at that time, there was not much information out there.

In 1996 when I switched from Clorox to Anheuser-Busch I rediscovered The Goal and did more research.  Of course, by this time there were more books and annual conferences.  I jumped in with both feet.  I had some great success applying the TOC concepts at AB and was on a fast track to an executive position.

In 2002 I decided to start my own consulting practice (Science of Business).  Like any good TOCer I did a full Thinking Process analysis for my business.  My analysis showed that my focus needed to be on sales and marketing.  There were very few people working in this area and there was a need for this focus for both consultants (marketing and selling TOC consulting) and for our clients. There were and are many good TOC Consultants working operational issues, but in some cases operational improvements are not enough to get the bottom-line improvements that we (and our clients) are after. If you improve operations but can NOT sell the uncovered capacity, the bottom line effect will be minimal.

In 2004, due to the success of my practice, Dr Goldratt asked me to join Goldratt Consulting as the Global Marketing Director.  I travelled the world doing my part to make TOC the main way companies are run.  I worked with some of the best TOC Thinkers in the world.  What an experience!

Then in 2006 I developed and starting doing Mafia Offer Boot Camps®.  The boot camps were a culmination of all that I had learned.  They were such a huge success that by January of 2007 I needed to focus on that full time.

That brings us to now.  We have created over 100 Mafia Offers and have done Mafia Offer Boot Camps® for over 50 companies.  And I am most proud of the fact that more than 50% of the companies that we have developed Mafia Offers for are service companies and our process does NOT require that a company fit a template.

In addition to Mafia Offer Boot Camps® we also partner with a handful of companies to help them improve their operations to the level required by their offer and then help them to implement their offer to increase their sales and profits.  We work with these clients on a partial or 100% results basis.