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Using Voice of the Customer to Improve Your Sales Process

What is the common element in the following business
challenges?

  • A $100 million dollar medical equipment company has no data to explain their growth, so they don't know what to do to keep growing. (more...)

A reader's question: "How Does Understanding Variation Help Solve Sales and Marketing Problems?"

The purpose of measuring any process is to uncover variation. After all, if something doesn't vary, you don't need to measure it. However, what we want to understand is the causes of that variation, so we can figure out what changes will achieve our goals. Often, process improvement experts will talk about two kinds of causes:

  1. Common Causes, which account for the normal behavior of the process
  2. Special Causes, which account for changes in the behavior of the process

Trevor, a Lean Six Sigma black belt at a plant within Danaher Corporation, asked me a valuable question about this distinction:

"Michael,

"You say in "Sales and Marketing the Six Sigma Way" that managers need to focus on special cause variation but they should not really be concerned with common cause variation.

"I agree that we need to understand significant instances of special cause variation, but I feel strongly that much of the improvement opportunity lies within focusing on the fat that often lies within the common cause variation...

"Most folks don't know what inputs (special or otherwise) cause their variations... yet only once they do can they begin driving improvement. Agree?"

Yes, I agree. Trevor has made a helpful distinction.

The comment in the book about "special causes" was made to point out that most executives hurt themselves when they do not understand how variation works, such as the difference between common and special causes.

As a result, if sales figures are slightly lower this quarter than last year in this quarter, they may have a knee-jerk reaction to change something, on the grounds that the results are lower than last year.

Of course, all this does is make things worse, because, to Trevor's point, if they have not analyzed their process, they do not know the cause of what they are experiencing, or whether it results from common or special causes. It is no wonder they have so little chance of improving anything.

The whole idea of Six Sigma is to break things down so that analysis of measured data can help identify what is really happening. Combining measured data with knowledge of the context enables people understand which inputs are causes of which types of variation in the outputs.

When a process is "in control" (i.e., its variability is understood and predictable) it is easier to detect a "special cause," i.e., when something changes the behavior of the process or system. In a noisy process, as is usually the case in sales and marketing, it can be difficult to identify a special cause.

If you need to improve the performance of the process generally, and there is no identifiable "special cause" you can easily fix, then you are in a position of, as Trevor put it, "focusing on the fat that often lies within the common causes of variation."

This is exactly where Lean and Six Sigma techniques are most valuable. These principles that enable you to think through the process and the problems in a systematic way, so you can ask questions and consider alternatives that traditional thinking overlook.

If you'd like a guideline for applying this kind of thinking you your process, you'll enjoy "Sales and Marketing the Six Sigma Way."

Michael Webb
October 23, 2006

A reader's question: "How Does Understanding Variation Help Solve Sales and Marketing Problems?"

The purpose of measuring any process is to uncover variation. After all, if something doesn't vary, you don't need to measure it. However, what we want to understand is the causes of that variation, so we can figure out what changes will achieve our goals. Often, process improvement experts will talk about two kinds of causes:

  1. Common Causes, which account for the normal behavior of the process
  2. Special Causes, which account for changes in the behavior of the process

Trevor, a Lean Six Sigma black belt at a plant within Danaher Corporation, asked me a valuable question about this distinction:

"Michael,

"You say in "Sales and Marketing the Six Sigma Way" that managers need to focus on special cause variation but they should not really be concerned with common cause variation.

"I agree that we need to understand significant instances of special cause variation, but I feel strongly that much of the improvement opportunity lies within focusing on the fat that often lies within the common cause variation...

"Most folks don't know what inputs (special or otherwise) cause their variations... yet only once they do can they begin driving improvement. Agree?"

Yes, I agree. Trevor has made a helpful distinction.

The comment in the book about "special causes" was made to point out that most executives hurt themselves when they do not understand how variation works, such as the difference between common and special causes.

As a result, if sales figures are slightly lower this quarter than last year in this quarter, they may have a knee-jerk reaction to change something, on the grounds that the results are lower than last year.

Of course, all this does is make things worse, because, to Trevor's point, if they have not analyzed their process, they do not know the cause of what they are experiencing, or whether it results from common or special causes. It is no wonder they have so little chance of improving anything.

The whole idea of Six Sigma is to break things down so that analysis of measured data can help identify what is really happening. Combining measured data with knowledge of the context enables people understand which inputs are causes of which types of variation in the outputs.

When a process is "in control" (i.e., its variability is understood and predictable) it is easier to detect a "special cause," i.e., when something changes the behavior of the process or system. In a noisy process, as is usually the case in sales and marketing, it can be difficult to identify a special cause.

If you need to improve the performance of the process generally, and there is no identifiable "special cause" you can easily fix, then you are in a position of, as Trevor put it, "focusing on the fat that often lies within the common causes of variation."

This is exactly where Lean and Six Sigma techniques are most valuable. These principles that enable you to think through the process and the problems in a systematic way, so you can ask questions and consider alternatives that traditional thinking overlook.

If you'd like a guideline for applying this kind of thinking you your process, you'll enjoy "Sales and Marketing the Six Sigma Way."

Michael Webb
October 23, 2006

The Three Stages of Sales Process Evolution (Which No One Ever Told You About)

Companies go through three stages of maturity in their sales processes. First they need to get organized. Second, they learn it works only if a customer wants it to. Third, they establish a flow by designing it from the customer's perspective. (more...)

Q & A with Michael J. Webb

Author of "Sales and Marketing the Six Sigma Way"

(Dearborn/Kaplan, August, 2006)

What's new about your book, "Sales and Marketing the Six Sigma Way"?

This is the first book that shows marketing, sales, and general managers how to use Six Sigma and other process improvement methods to boost marketing and sales results. (more...)

Q & A with Michael J. Webb

Author of "Sales and Marketing the Six Sigma Way"

(Dearborn/Kaplan, August, 2006)

What's new about your book, "Sales and Marketing the Six Sigma Way"?

This is the first book that shows marketing, sales, and general managers how to use Six Sigma and other process improvement methods to boost marketing and sales results.

What is Six Sigma?

Six Sigma means different things to different people, but it always indicates the use of process improvement methods in management. The differences hinge on the degree of rigor and formality used in applying the methods. But the methods always include gathering data and facts, measuring activities and results, analyzing business processes for cause and effect, and experimenting to find the best solutions. The word "sigma" is a statistical term for measuring variations in things. One meaning for six sigma is actually "almost no variation," in other words, perfection.

This is a new idea?

It's new in marketing and sales. Process approaches and the quality movement go back for decades, to TQM [Total Quality Management] in the 1980s and beyond. Six Sigma began in the 1990s at Motorola and was used with tremendous success at Allied Signal and at GE under Jack Welch. Now it has moved into marketing and sales.

Why are companies applying these methods in marketing and sales?

Two reasons: First, senior executives have seen that process improvement has worked well in operations, so it only makes sense to try it in marketing and sales. Second, managers are learning that the usual fixes for marketing and sales problems-firing the sales manager, holding a sales contest, or rejiggering the incentive plan-don't address problems in the sales process itself.

What do you mean by "the sales process"?

The sales process is everything a company does to find, win and keep customers. It's the end-to-end chain of activities that facilitate the customer's buying process. The sales process and the buying process are two sides of the same coin. A company's sales process has to be designed and managed so that every activity in it produces the desired result for customers in the buying process.

Why don't companies take a systemic view now?

Most marketing and sales managers don't view sales as a process for producing happy customers, which is really what it is. As a result, instead of managing sales as a process, they put their faith in the creativity of ad agencies, the numbers game of direct marketing, and the "star system" in which a few super salespeople produce most of the revenue.

What exactly does "managing sales as a process" mean?

Here's an example from my book. A division of Hong Kong Shanghai Bank was about to add more salespeople to increase its sales. But first they had their quality expert map their sales process. He found that the problem wasn't too few salespeople; it was a bottleneck in the account-opening procedure. When they fixed that, sales skyrocketed.

How did they find the sales bottleneck?

When you map and measure the activities in your sales process, stuff like that pops out all the time. He diagramed the activities in their sales process and saw that many prospects dropped out at the account-opening stage. The procedures were cumbersome and frustrated customers were going elsewhere. Fixing that fixed the sales problem-at a tiny fraction of the cost of adding more salespeople.

That's impressive. Do you have other examples?

Tons. Field marketing tests at Motorola showed that using fewer, cheaper methods of promoting cell phones worked better than using more, and more expensive, methods. A lumber company increased the performance of its entire salesforce by getting everyone to achieve the average level of regional performance, which sounds counterintuitive but worked beautifully. A Web-based company mapped its online sales process and made simple changes to the copy on two pages which boosted sales by 12 percent overnight.

What's the theme that runs through these cases and through your book?

You've got to understand your sales process and your customer's buying process. Then you have to adjust your sales process to give customers what they need at each point in their buying process. You define activities sharply, measure the heck out of everything, discover cause-and-effect relationships between what you do in marketing and sales and what your customers do in response-and you keep adjusting, measuring, and improving.

Sales and marketing the Six Sigma way is basically ensuring that you have a sales process that gives customers what they need in order to buy what you sell.

- END -

Michael J. Webb is President of Sales Performance Consultants, Inc., which helps companies such as American Express, 3M, Marriott, and many others to improve their sales processes and results. See www.sixsigmaselling.com and www.salesperformance.com for more information.

Make Your Sales Funnel Flow Faster!

Businesspeople everywhere want their sales funnels to flow faster. They want customers to pay higher margins. They want sales to cost less.

So, they hire the best salespeople and marketing experts, pay them well, and ask them to work really hard. Still, they suffer from: (more...)

Weak Revenue? The New Fix for Sales and Marketing Problems

Contact:Michael J. WebbCourtney Goethals
Phone:708-383-9309(312) 894-0322
Email:mwebb@salesperformance.comcourtney.goethals@kaplan.com

Weak Revenue? The New Fix for Sales and Marketing Problems
Tools from GE, Motorola, and Toyota Now Shaking Up Sales and Marketing

June 30, 2006, Norcross, GA: A radical new management approach is transforming sales and marketing in a huge range of businesses. In his new book "Sales and Marketing the Six Sigma Way" (Kaplan Publishing, August 1, 2006), author Michael J. Webb takes readers into companies like Standard Register, ServiceMaster, Hong Kong Shanghai Bank, Motorola, and others to show how they doubled revenues and cut sales costs by re-thinking how sales is done. The shift these companies demonstrate heralds a new style of scientific sales management.

"It's long overdue," Webb says.  "The quality movement has generated hundreds of millions of dollars in productivity gains and bottom line savings in manufacturing for thousands of companies.  Now, innovative managers trying to get similar results in marketing and sales are beginning to see them."

Initially some executives are skeptical that sales activities have anything in common with manufacturing. "But that's exactly the point," Webb says. "In manufacturing, you produce a physical thing. Improvement requires using different manufacturing methods. In marketing and sales you produce actions on the part of prospects and customers. The key difference is that customers have free will. Yet, there are high quality and low quality customers and better and worse ways of producing them.  In today's market, companies know can no longer just keep trying harder. Improvement requires using different sales and marketing methods."

"Sales and Marketing the Six Sigma Way" (named for the sharpest of the quality improvement tools) documents dozens of cases of companies boosting sales results guided by a structured approach first developed for manufacturing environments. To apply it, a company must define which customers it wants and clarify its value proposition. Then it can align its marketing and selling tactics with the stages of those prospect's buying process."

Webb maintains that even just defining terms for the sales process opens executives' eyes.  "Most companies don't have consistent meanings for terms like 'leads' and 'qualified opportunities,' which is why their attempts to measure things don't work." Managers see new things when they scrutinize sales activities, and the resulting customer actions.  It's a real departure from the usual numbers game of marketing and the cheerleading that often passes for sales management."

Webb points out that quality improvement can be a tough sell to sales.  In Webb's words, "Quality or Six Sigma professionals who geek out on jargon and statistics send salespeople into glazed-eye mode.  The approach must be based on making sales easier, not harder." Which means figuring out how to help marketing and salespeople to get the customer's attention, time, money and ultimately, referrals. Those things can all be measured, and when they are, they can be managed. And that's how to fix sales and marketing problems.

- END -

Michael J. Webb is President of Sales Performance Consultants, Inc., which helps companies such as American Express, 3M, Marriott, and many others to improve their sales processes and results. See www.sixsigmaselling.com and www.salesperformance.com for more information.