Know-How Exchange : Strategy

Thanks Gian,

well .... it is openly available so if you can use it 'welcome' and for sure I like to get the credits please.

Michael

Dear Michael

Blessings to you to – heartfelt blessings actually.

This is a good schema which you have developed and I’d like to ask you for a day or so that I can develop my thoughts on it.

One question needs answering first though. Do you go through the steps in this process and use normative determinants or do you use positive determinants.

Normative in this context means that you assess how you think you should approach each action and what data you can or cannot put into the process. You can use numbers, but the basis of normative marketing is to address issues where you can influence an outcome, without going into the mathematic analysis which can be quite tricky. It’s no less valid as long as each decision you take is based on an accepted tenet of marketing and is stated in the correct context.

Positive in this context is far more interesting – Applying the normative approach usually means that the parties involved dissolve into a debating society which is amusing but not very productive.

If at each stage you measure, monitor analyse and act on what the figures tell you, then you have a workable positive model. It will be wrong initially, but with refinement will run close to how a multi-million optimisation suit from Oracle or SAP would give you the answers.

I have only one reservation about this. Some of your stages are described by a maths which is non-linear (Powers, roots, exponents etc) That’s OK if you do not use feedback and an iterative model. As soon as you do this, the system you propose will either settle down to a steady state or more likely, oscillate or go entirely chaotic.

Take a very simple sales model: A team of n sales people are told to build up a pipeline by spending the next few weeks calling people from leads and booking appointments.

Assume that this runs well for a week and the figures indicate that the sales forecast should go upwards if the sales people do a good job in closing. It will therefore be repeated next week and who knows, perhaps for the next 6 months.

But wait a minute, over the next week, some of the sales people will be away from the phone and making presentations. That means that the variables have changed as you only have n-s people to man the phones.

Also the pile of leads you started off with will have been diminished and therefore it becomes harder to find people who want an appointment. If you stick these assumptions into an equation and then feed back the result into itself, in theory you should get the forecast activity, appointments and orders you desire along with the improvements you wish to make.

In a small market (Known universe of buyers) the total number of people you can talk to will also be decreasing, making it harder to secure further appointments. Further advertising to top up the lead supply is only partially effective because unless you have a new product, you are asking the same readership to make a further enquiry. For sure – some new people will read it and enquire, but the task is getting harder. In other words the variables are changing and so are the constants!

This is not simple linear predictive statistics to guide your hand. The above scenario is both non linear and has feedback, so it will be a chaotic model. As you can never know your initial conditions to an infinite accuracy then you have no way of predicting future business you will generate. Like long range weather forecasting – It doesn’t work for exactly the same reason.

If you can supply me with the assumptions and algorithms you use at each step or node, I can attempt to see how many elephhant traps you have set yourself.

Best wish


Steve Alker
Xspirt

Dear Michael

Blessings to you to – heartfelt blessings actually.

This is a good schema which you have developed and I’d like to ask you for a day or so that I can develop my thoughts on it.

One question needs answering first though. Do you go through the steps in this process and use normative determinants or do you use positive determinants.

Normative in this context means that you assess how you think you should approach each action and what data you can or cannot put into the process. You can use numbers, but the basis of normative marketing is to address issues where you can influence an outcome, without going into the mathematic analysis which can be quite tricky. It’s no less valid as long as each decision you take is based on an accepted tenet of marketing and is stated in the correct context.

Positive in this context is far more interesting – Applying the normative approach usually means that the parties involved dissolve into a debating society which is amusing but not very productive.

If at each stage you measure, monitor analyse and act on what the figures tell you, then you have a workable positive model. It will be wrong initially, but with refinement will run close to how a multi-million optimisation suit from Oracle or SAP would give you the answers.

I have only one reservation about this. Some of your stages are described by a maths which is non-linear (Powers, roots, exponents etc) That’s OK if you do not use feedback and an iterative model. As soon as you do this, the system you propose will either settle down to a steady state or more likely, oscillate or go entirely chaotic.

Take a very simple sales model: A team of n sales people are told to build up a pipeline by spending the next few weeks calling people from leads and booking appointments.

Assume that this runs well for a week and the figures indicate that the sales forecast should go upwards if the sales people do a good job in closing. It will therefore be repeated next week and who knows, perhaps for the next 6 months.

But wait a minute, over the next week, some of the sales people will be away from the phone and making presentations. That means that the variables have changed as you only have n-s people to man the phones to make further appointments.

Also the pile of leads you started off with will have been diminished and therefore it becomes harder to find people who want an appointment. If you stick these assumptions into an equation and then feed back the result into itself, in theory you should get the forecast activity, appointments and orders you desire along with the improvements you wish to make over the coming moths both to infor and guide you.
This is not so.

In a small market (Known universe of buyers) the total number of people you can talk to will also be decreasing, making it harder to secure further appointments. Further advertising to top up the lead supply is only partially effective because unless you have a new product, you are asking the same readership to make a further enquiry. For sure – some new people will read it and enquire, but the task is getting harder. In other words the variables are changing and so are the constants!

This is not simple linear predictive statistics to guide your hand. The above scenario is both non linear and has feedback, so it will be a chaotic model. As you can never know your initial conditions to an infinite accuracy then you have no way of predicting future business you will generate. Like long range weather forecasting – It doesn’t work for exactly the same reason.

If you can supply me with the assumptions and algorithms you use at each step or node, I can attempt to see how many elephhant traps you have set yourself.

Best wish


Steve Alker
Xspirt

Dear Steve,

wow, this is a comment which makes me realize that I don't know too much about how the thoughts of people can go - if one throws a stone into the water (as we say in Germany ;-)

I am a simple marketing and sales man, trying to give my clients something at hand for them to check their marketing and sales possibilities - and how to repeat this from time to time.

And I do not - sorry for that !! - really understand the full meaning of your answer. It seems to me a bit 'too high' for my simple marketing thoughts.

I am still of the opinion that one cannot solve marketing and sales problems with PC-programmes ! PCs do not understand mentalities, people, needs, competition, they havew no 'feeling', etc.

And THIS is the field where I want to help !

I have taken your comment, however, to add immediately a first sentence to my site in order to make this clearer for anybody.

I hope you dan't mind, but I guess I will even not understand when going deep into it.

Nevertheless, thanks for answering.

Best regards

Michael

Fine - then you go for the normative approach and you work everything out on whether it feels right and adheres to principals of business and marketing. I'll come back to you on this basis!!!

Sorry for unhinging you!!


Steve

PS Marcus is Australian so he'd solve the loop issue with a crate of Fosters after which anything you come up with, excluding breakfast, is going to be brilliant.

G'day Marcus,

thanks for your input ! I'll give it a thought.

In fact the opening paragraph should be a statement. As English is not my mother tonuge, I'll be open for any wording which makjes it clearer/mor understandable to everybody

Thanks anyway and my best regards to your whole country. It would be the place for mem if I weren't stuck here ;-)

Michael

I'd prefer to see your information presented graphically in a flowchart, which would highlight the steps and reinforce the feedback loop.

The language is in the 3rd person. Can you rewrite it to talk to the person reading it (for example, "...yet supplied by the company resp...." to be "...yet supplied by your company....")? It'll make the tone more conversational and less stilted.

If English isn't your native language and you're expecting the document to be read by native speakers, have a native speaker help you rewrite it.

Underlying your document is the question "Why?". Why should I follow all these steps? Why should I trust your knowledge? What happens if I skip a step, etc.?

Jay, don't you think the graphical display - which is already available especially to support the 'loop-idea' is sufficient !?