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Can Six Sigma Work in a Sales and Marketing Environment?

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by Paul Selden

Originally published in the ASQ Six Sigma Forum, 2001

William Latzko, a professor at the Fordham University Graduate School of Business and a colleague of W.E. Deming, remarked to me not long ago that the great opportunity for quality in the twenty-first century lies in sales process improvement. Indeed, quality thinking offers a perspective that can help launch sales, marketing, and customer service into a new frontier of systematic, long-term improvement.

Likewise, Six Sigma has come to represent something of a new frontier for many companies wanting to achieve bottom-line benefits through quality improvement. Its success in capturing attention stems from highly visible proponents like GE s Jack Welch, along with its focus on achieving tangible financial results and application to a broad range of situations.

Combining these two realities the opportunity to improve sales and the momentum of Six Sigma would seem to guarantee a wealth of possibilities for successful improvement projects tied to increasing revenue. Through the lens of Six Sigma, the same types of improvement opportunities found in manufacturing can be found in arenas involving more direct person-to-person and customer interchange. Marketing program yields can be improved, sales cycle times can be reduced, and service can produce fewer defects (for example, customer defections). The table below lists a veritable smorgasbord of tangible opportunities for improvement in the world of sales, marketing, and customer service framed in terms that are more engineering-like.

Selected Sales, Marketing, and Customer Service

Improvement Opportunities

Mistake-proofing customer needs analysis

Improving ROI on existing customer feedback

Increasing convenience to the customer

Systematic improvement of conversion ratios

Pricing policy and system simplification

Order entry/processing error reduction

Reduce gaps between commitments and execution

Shorten concept-to-customer cycle time

The range of genuine opportunity makes Six Sigma sound promising for sales and marketing. In spite of the promise, those experienced with the standard approach to Six Sigma often conclude that delivering it as is to an audience of sales and marketing personnel is far too risky. Why?

What Makes Six Sigma for Sales So Difficult?

Four of the most common causes for failure when a Six Sigma program is presented to sales and marketing can be attributed to its inherent production-centric bias. Having remedied some of Six Sigma s own defects when applied to sales, marketing, and service applications, I am convinced that to be most successful, Six Sigma programs in sales and marketing must recognize and avoid these four obstacles and their related implications, without exception.

  1. Inappropriate training program design and content. Course material hastily adapted for sales and marketing tends to rely on poorly chosen examples unrelated to real-world problems these groups must wrestle with every day. This makes it difficult to physically see that Six Sigma training offers a sure-fire way to craft and deliver sales and marketing solutions. Sales are too hard to come by to risk on an assurance that, Try it, you ll like it. So it should be no surprise that sales and marketing leadership often fails to demonstrate genuine commitment to Six Sigma, right from the start.
  2. Inadequate project support after training. Far too many Black Belts and Master Black Belts supporting projects in this arena have little or no hands-on experience in sales and marketing. They cannot provide the practical, knowledgeable assistance that newly trained Six Sigma personnel require, and they cannot create the necessary rapid, smooth transition from the classroom to projects on the job.
  3. Cultural barriers. The culture of sales and marketing is to emphasize the strengths of their products and services, not their defects, and to stress making money over cutting expenses. The culture tends to blame people, not processes, when problems occur. The very word quality when applied to such labor-intensive fields is personalized almost immediately. Six Sigma is often perceived as a potential enemy that could be used to draw attention to personal faults on the one hand and create excuses for poor performance on the other.
  4. Internal forces reduce interest in customizing the Six Sigma training approach for sales and marketing. Once successful, some movements develop dogmatic by-the-book tendencies that retard constructive evolution, and some companies approach to adapting Six Sigma is no exception. I ve often heard a contorted logic used to justify keeping Six Sigma s training approach the same for everybody regardless of the bottom-line results!

The rationalization goes like this: Six Sigma is so important to our success that everybody must learn the same language and methodologies and go through the same program in the same way. We see some red flags, but we ve already spent a bundle, so we will stay the course, train and stick to the program we purchased as is. Negative results and feedback are used to perpetuate a belief that sales and marketing are troublemakers (blaming the people), instead of improving the training or being open to more effective innovative approaches that may not even require such extensive classroom training. Chalk it up to politics, lack of experience, lack of budget--the net effect is the same: insufficient tailoring to audience needs, continued frustration, and poor results.

With obstacles coming from both Six Sigma training teams and sales and marketing departments, it seems fitting to ask is customizing Six Sigma for sales and marketing worthwhile?

Is Customizing Six Sigma for Sales Worth the Effort?

Let s put the question another way, and the next step is clear to anyone with true business experience who has the authority and responsibility to take action: since when does it make sense to keep doing the same old thing when it doesn't work?

The good news is that the business results show that a custom-tailored approach can be very successful, and that many improvement principles can immediately be extended to sales and marketing applications. Let me share some brief examples of how quality thinking can be applied, including results from my own client applications.

Six Sigma s orientation to the customer offers a chance to update old views of the sales processes into a more tangible framework that allows systematic improvement. The old-world view, depicted in Figure 1, treats sales transactions as mysterious and discrete events, with the customer outside of the world of the sales representative. I ve actually heard people call what happens magic.

Fig. 1 Sales as Discrete (SAD) Transaction

The more systematic view demystifies sales. This view treats income as the output of a tangible system, as illustrated in Figure 2. As such, that system can be subjected to objective analysis using tools common to Six Sigma and other well-grounded disciplines.

Fig. 2 Revised High-Level Flowchart of Sales Process (Generic)

In many ways, the customer s buying process is more important to understand as the suppliers selling process. Where Six Sigma s efforts to improve are concerned, customer behavior is the ultimate focus. The buying process, like the selling process, can be viewed as a sequence of steps (Figure 3).

Fig. 3 High-Level Flowchart of Buying Process (Generic

Even this simple chart clarifies the fact that an offer must be competitive, presenting such clear overall value that it reduces the number of equivalent substitutes the customer chooses to consider and accept. Charting the customer buying process helps remind us of the customer s golden rule : Who has the gold, makes the rules.

It is important to learn the customer s preferences at the points of customer-supplier contact (Figure 4). Quality assurance and improvement efforts must focus on those critical and highly visible intersections.

Fig. 4 Where Quality Is Especially Vital

Concentration on buyer-seller interaction can reveal previously overlooked opportunities for savings and efficiency. The examples that follow show how great the opportunities can be.

The Bottom Line for Sales and Marketing

My hands-on involvement with many successful sales and marketing improvement projects over the last decade has convinced me that, with the proper packaging, many tools within Six Sigma can be adapted to work very well in sales and marketing. The payback when deployed correctly can be substantial, comparable in magnitude to published surrounding production-centric Six Sigma programs.

For example, in one instance, sales in a division of a large financial firm doubled in a one-year period, over a baseline of nearly $100 million. In another case, sales of an industrial firm grew almost 50% in a single year, approaching one-half billion dollars.

The following cases demonstrate particularly well that a disciplined approach can yield improved processes that in turn produce increased revenue and earnings.

An international snack foods producer initiated a sales training project to counter a strong threat posed by a competitor.

  • Opportunity: Reduction of competitive threat
  • Method: Flow-charting

Discovered: Gaps in countermeasures

  • Solution: Closed gaps, trained, management reporting
  • Results: Competitor left market entirely

Hoping to improve customer service, an agricultural products and genetic research organization simultaneously improved productivity.

  • Opportunity: Sales and service productivity
  • Method: Motion/time study and brainstorming
  • Discovered: Customers willing to place routine orders independent of salesperson
  • Solution: Gave biggest customers on-line access to their internal catalog

Results: Millions of dollars in orders immediately began flowing, bypassing representative intervention entirely; eliminated weekend billing fix-it shift; reduced 15 temporary workers

An electrical designer and supplier for large-scale buildings, airports, stadiums, and offices needed to improve its acceptance by the market.

Opportunity: Some market regions lagging

  • Method: Ruled out typical causes (people, regional market differences)
  • Discovered: Important differences among regions in pricing policy
  • Solution: Changed policy
  • Results: Sales increased $150 million in a single year

In the three cases outlined above, viewing revenue as the output of both the selling and buying processes enabled impressive and timely gains. The way these companies reacted to competitors, offered increased customer convenience, and remedied pricing policies in different regions, provides clear examples of benefits that can accrue when one attends to customers buying processes as least as closely as to one s own selling processes.

I offer four conclusions.

1. Custom-tailoring the standard approach to Six Sigma for a sales and marketing audience is essential in order to avoid the pitfalls and garner the rewards. Given the potential financial rewards and the recognized need for continuous improvement in all aspects of business, the effort required to ensure proper execution can pay off handsomely.

2. Tangible benefits from quality improvement can come in the form of growth and retention of share, as well as cost savings. Many business people in positions of authority are more confident in their ability to cut costs because expense items seem more tangible, hence more controllable, in principle. My First Principle of Sales Process Improvement stands that outmoded idea on its head: The major variables responsible for what a customer buys are tangible or the customer would not be able to experience them in the first place. Sustained growth and market leadership require a system for discovering and capitalizing on these important variables before the competition.

3. A systematic approach to problem solving and process improvement improves communication and teamwork, as well. Done right, Six Sigma helps sales, marketing, and service departments focus on a common goal, using a shared backbone of improvement tools. Internal articulation of needs is clearer and the rationale for cross-departmental teamwork more apparent to all.

4. Since the arena of sales, marketing, and customer service still constitutes a budding frontier for quality, early pioneers will enjoy a big head start. Those who harness the power of quality thinking while the field is still young should enjoy competitive advantages for years to come.

Citation: This article was originally published in the ASQ Six Sigma Forum, 2001.

About the Author

Paul Selden owns a number of businesses specializing in performance and business process improvement, with clients including Nabisco, AC Nielsen, and Ford. He has written numerous books and articles and directly consults with companies interested in systematically growing revenues and earnings. Paul was recently named one of the 10 Most Influential in CRM (Customer Relationship Management) by Sales and Marketing Automation Management magazine. His Ph.D. is in behavioral psychology; he is an ASQ certified Quality Engineer. Email: paulselden@paulselden.com.

7 Responses to “Can Six Sigma Work in a Sales and Marketing Environment?”

  1. What is the exact meaning of the word 'Six Sigma'? How does it can affect the sales and marketing environment? Is it a necessary part of the marketing?

    • Michael Webb says:

      Sigma is a mathematical term used to measure variation, or deviation. Six Sigma is an extremely high standard for consistency, being able to hit targets.

      One of the profound achievements of the quality and productivity sciences is the application of statistical concepts to business problems. In the case of sales and marketing, you often hear discussions about close ratios (e.g., "Why is the Eastern Region's close ratio higher than the Western Region?") or response rates ("Why did the ad in Tube and Pipe Quarterly generate twice as many inquiries as the one in "The Fabricator Magazine," even though it has half the circulation?) Careful analysis of variation enables business people to gain clues for causes and effects (systems thinking), and these clues enable them to conduct experiments to determine how to stop investing resources in less productive areas so they can be invested in more productive ones (process improvement).

      So, yes, applied statistics is necessary if you are to improve sales and marketing, though they are woefully underutilized.

  2. atul shah says:

    Can the Six Sigma be Implemented in the sales and marketing dept. for a Small and medium Enterprise?

    Also can it be implemented in real estate development Company?

    • Michael Webb says:

      Atul,

      Can the Six Sigma be Implemented in the sales and marketing dept. for a Small and medium Enterprise?

      Yes, it can. The issue is more one of how the sales manager and the president of the company think about sales and marketing. Six Sigma has been seen as more of a "big company" phenomena, marked by lots of training, but this is not necessary or advisable, especially in a smaller firm.

      As far as in a real estate development company, I am not too familiar with the specific applications there, but if you have customers, value that flows (or should flow) to them, and work that causes the value to flow, then I believe the principles apply, one way or another. Thanks for your questions.

      MW

  3. Matt says:

    Hi Paul,

    Thank you for writing this article. I have always seen six sigma as a tool for manufacturing because I thought the customer presented too many variables. Though research and experience with a consulting company I can see the benefits you describe in your article. I am currently petioning my sales and service oreinted company to pay for my green belt certification. Can you suggest a learning path (books, lean, green belt, black belt, other certifications) that will help me make an impact with six sigma methodoligies (and others) in this business?

    Thanks

    • Michael Webb says:

      Matt,

      I believe a good place to start is my book "Sales and Marketing the Six Sigma Way" (4.5 stars on Amazon). There is a link on the products page of this website.

      Basically, what you are really trying to do is understand how the rational disciplines of the quality and productivity sciences apply to the invisible world of sales and marketing. In Sales and Marketing the Six Sigma Way, I showed that these methods indeed can be applied to sales and marketing. You can measure and improve sales processes using data and evidence. The science most definitely works.

      However, there are many things that need to be in place for people in the business to be able to get the data and evidence required to apply the quality and productivity sciences. The lean movement, for example, has a great deal to offer in terms of thinking about value streams, eliminating waste, and creating an environment of continuous improvement through PDCA.

      However, all of these things need to be translated from the traditional manufacturing context to a sales and marketing context, and this is not an easy task. Most difficult of all is getting a company's management to recognize the value of these approaches, not because the are difficult to understand, but because managers in companies typically do not realize they need to think more critically. Once they do realize this, they tend to approach process excellence with a "tools orientation" rather than a "systems thinking" orientation, so there is a learning curve there too.

      Six Sigma is a valuable thing to get training on, and so is lean. If your aim is sales and marketing specifically, These will get you closer but they will be a round-about road. I do not have a training company to recommend. There are many reputable firms and courses. Also, the best way to learn is by doing, so if you can get support from a knowledgeable coach in doing actual projects you will learn a great deal more quickly.

      Don't expect much when it comes to sales applications, however, as the industry is not there yet. The best thing I can suggest there is to read through this website, and ask questions. Hope that helps.

      Michael

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