Have you watched the firm The Godfather?
Do you remember when Marlon Brando says “I’m gonna make you an offer you can’t refuse.”
That’s a Mafia Offer.
The Mafia Offer And The Theory Of Constraints
The Theory of Constraints was introduced to the world in the great business novel The Goal by Eliyahu Goldratt and Jeff Cox.
The idea that every business is a system and as such, its output (making money) is limited by a constraint. Many businesses have constraints or bottlenecks inside the business but sometimes the problem is between the business and the outside world.
The constraint that holds back the business is that the business isn’t creating enough demand.
That’s where the idea of the Mafia Offer or Unrefusable Offer comes in.
Dr Lisa Lang & The Mafia Offer
The idea of this compelling offer was introduced in the Eli Goldratt book about the Theory Of Constraints Thinking Processes called “It’s Not Luck“.
The person who has done most since then to promote the idea of creating the Mafia Offer is Dr Lisa Lang who spent three years as Dr Goldratt’s marketing director.
She defines the idea as “an offer that is so good that your customers can’t refuse it and your competition can’t or won’t offer the same thing.”
It is built on:
- What are (or could be) your internal capabilities compared to your competitors.
- How you and your competitors sell your product or service.
- An understanding of how your customers are affected by your current capabilities and how you sell.
The idea is that your capabilities and how you sell force your customers to make compromises between how they want to work and how they have to work.
Here is an 8 minute video of Dr Lisa Lang explaining Mafia Offers.
Dr Lisa goes deep on how to develop a Mafia Offer. Chapter 22 of the Theory of Constraints Handbook is titled Mafia Offers: Dealing with a Market Constraint.
The main book itself is huge – over 1,200 pages. I bought it when I was particularly enthusiastic about the TOC Thinking Processes. [When I originally wrote this article, you could buy Kindle ebooks of the individual chapters in the book. Sadly, as of 14 March 2019, that’s no longer the case.]
It’s Said That A Mafia Offer Is Not A USP Or Customer Value Proposition
I’m not so sure about that myself:
- It’s unique (because competitors can’t or won’t match it)
- It sells
- It’s a proposition or offer
It sounds a lot like a great USP to me.
Its origins are different in that it explicitly looks at the compromises customers have to accept with what currently happens in the market and then finding solutions to create genuine, measurable differentiation. In contrast too many USPs and value propositions find something special about the business or product and the make a song and dance about it.
A Mafia Offer is a higher standard to aspire to and more difficult to achieve. It’s routed in capabilities more than resources.
The way I look at it, is that a Mafia Offer is a USP and positioning statement.
But many USPs and customer value propositions are not good enough to qualify as a Mafia Offer.
I believe that it’s an important contribution to the development of compelling positioning statements and effective genuine differentiation in the eyes of customers or what I call Irresistible Promises.
Examples Of Mafia Offers
- Hyundai – We will buy back your new car if you get laid off in the next two years (made during a year when the recession started)
- Domino’s Pizza – We deliver fresh, hot pizza in 30 minutes or less – or you eat FREE (I know it’s one of these, it’s a USP, it’s an Irresistible Offer but it is a superb positioning statement that changed the pizza industry).
- Xerox – We offer copies when and where you need them, at an fixed rate per page (when competitors sold expensive machines and inconvenient servicing)
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