Operational Improvements Required: S-DBR38 or the Velocity Scheduling System,39 Project Velocity System,40 or CCPM,41 depending on the situation. Using these logistical applications of TOC ensures that the current deliveries are not deteriorating and exposes excess capacity. This ensures that the only investment that is required for Pay-Per-Click offers are the totally variable costs42 of the equipment.

Gain Sharing (My Mafia Offer)

Situation: This template applies to any company supplying a product or service to any other company or individual. This template does not yet have a corresponding S&T.

This template may fit in situations where at least some of these statements are true: The selling company is putting all the risk on the customer/prospect.

The customer/prospect has some doubt about the results or benefits that will occur.

The selling company is confident in the results that can be achieved by the customer.

The results gained by the customer can be measured.

The customer/prospect cannot afford to purchase the product/service outright, but could pay if the promised results were realized.

In other words, this template may apply if customers/prospects want the product/service but regard the investment as too risky. Alternatively, past experience or lack of experience causes the potential customer to doubt that the promised results actually will be realized.

Example Mafia Offer: "Mister Customer, most consultants charge by day or project, putting the risk of actually getting bottom-line results on you. At best, some consultants will offer to get paid as deliverables are met, but these deliverables are typically based on the completion of some task, not your bottom line. So, our offer is that you only pay us if and when your profits increase. If we don't increase your profits, you don't pay."

Operational Improvements Required: S-DBR43 or the Velocity Scheduling System,44 Replenishment,45 Project Velocity System,46 CCPM,47 or nothing, depending on the situation.

Mafia Offers have been created for all different types of companies. The majority of companies, we estimate 75 to 80 percent, can develop a good Mafia Offer. Moreover, about 30 percent of the companies that have completed Mafia Offer Boot Camps48 have been service companies. The toughest situations are: E-commerce sites that don't hold inventory and sell the exact same SKUs as the competition. However, there are some good offer opportunities for these companies and the key is to either (1) make the price comparison more difficult or (2) make them choose you, all else being equal.

Those that sell insurance or sell financial planning. Again, a much improved offer and positioning is possible, but because you don't control operations, a Mafia Offer is much more difficult.

Generally, when regulatory rules prevent the appropriate offer, for example, it is considered unethical for Certified Public Accountants to use a gain-sharing offer.

Summary

So, a Mafia Offer can help you to increase your sales by answering, "Why should I buy from you?" And if delivered correctly, using the psychology of Mafia Offers, you can have better control over your sales. What's better control? How about closing as much as 80 percent49 of your opportunities?

Do the analysis; the worst case is you develop a better offer and a better market position. The best case is you develop a Mafia Offer, one that your customers can't refuse and your competition can't or won't match.

A Mafia Offer is only one part of how Theory of Constraints can help you to improve your marketing. However, it is a very important part and a great place to start.

References

Cialdini, R. B. 2007. Influence: The Psychology of Persuasion. New York: HarperCollins, Chapter 3.

Damasio, A. 1995. Descartes' Error. New York: Harper Perennial.

Goldratt, E. M. 1994. It's Not Luck. Great Barrington, MA: The North River Press.

Goldratt, E. M. 1999. Satellite Program Session 5: Marketing. Goldratt Satellite Program. Amsterdam, The Netherlands: AYGI Limited.

Goldratt, E. M. 2008. The Choice. Great Barrington, MA: North River Press.

Goldratt, E. M. and Goldratt, R. 2003. The Solution for Sales. Paper presented at the 2003 TOC Upgrade Workshop, February 2123, Cambridge, England.

Hart, L. 1975. How the Brain Works. New York: Basic Books.

Kim, C. and Mauborgne, R. 2005. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Cambridge, MA: Harvard Business School Press.

Mabin, V. and Balderstone, S. 2000. The World of the Theory of Constraints: A Review of the International Literature. Boca Raton, FL: St. Lucie Press.

Ornstein, R. 1992. The Evolution of Consciousness. New York: Simon and Schuster.

Renvoise', P. and Morin, C. 2007. Neuromarketing: Understanding the "Buy Buttons" in Your Customer's Brain. Nashville, TN: Thomas Nelson.

Smith, J. 2006. Creating Competitive Advantage. Delhi, India: East West Books (Madras).

About the Author.

Dr. Lisa Lang is considered the foremost expert in the world in applying TOC to Marketing. She is currently the President of the Science of Business and has recently served as the Global Marketing Director for Goldratt Consulting.

Dr. Lisa has a PhD in Engineering and is a TOCICO certified expert in TOC. Dr. Lisa is currently serving on the TOCICO Board of Directors.

Science of Business specializes in increasing profits of highly custom businesses and applying TOC, Lean, and Six Sigma to sales and marketing having developed the Mafia Offer Boot Camp, Velocity Scheduling System, Project Velocity System and Sales Velocity System.

Before becoming a consultant, Dr. Lisa was in operations, strategic planning, purchasing, R&D, and quality while working for Clorox, Anheuser-Busch, and Coors Brewing.

In addition to consulting, Dr. Lisa is a highly sought after Vistage/TEC speaker on "Maximizing Profitability." Dr. Lisa also provides professional keynote speeches and workshops for organizations like TLMI, ASC, NTMA, GPI, and NAPM, and private events for corporations like TESSCO, Bostik, GE, Pfizer, Arcelor Mittal, Corus Group and Sandvik Coromant.

SECTION VI.

Thinking Processes *

CHAPTER 23 The TOC Thinking Processes: Their Nature and Use-Reflections and Consolidation

CHAPTER 24 Daily Management with TOC.

CHAPTER 25 Thinking Processes including S&T Trees.

CHAPTER 26 Theory of Constraints for Education (TOCfE).

CHAPTER 27 Theory of Constraints in Prisons.

Knowing how to think is of major importance to most of us. But how well do we think? Do we really have insightful and disciplined ways to analyze problems in either our personal lives or in organizations? This is a question for most of us; for managers, first-line supervisors and workers, for students, and others.

In this section we present strong tools for simple, logical, and focused reasoning. They include logical constructs to aid us in getting at the truth in the existing reality; its undesirable effects, core problems, and conflicts. The tools offer tests of reasoning to help assure validity of analysis. They include tools to facilitate the identification of underlying core problems, the construction of win-win solutions, and the planning of action steps to bring about necessary changes. The tools include capabilities for identifying potential negative consequences of planned actions, negative consequences which if not seen and addressed could lead to the failure of a plan for improvement. Solutions require action for change. What actions and when? Tools for mapping How to Change, the obstacles to be overcome and the action steps for implementation are covered. Elements of cause-and-effect logic, techniques for logic diagramming, tests of logic and conflict resolution tools to help assure the integrity of solution are addressed.

The Thinking Processes are producing results in a wide range of organizations. Chapters in this section address applications in research, in education, and even in prisons. The Thinking Processes are simple enough to be used effectively by prekindergarteners but robust enough to be used on the most complex organization problems.

CHAPTER 23.

The TOC Thinking Processes

Their Nature and Use-Reflections and Consolidation

Victoria J. Mabin and John Davies Nothing is more practical than a good theory1

Introduction.

Preface to the Chapter