iSixSigma

Improving Sales Effectiveness

The Last Word from the November/December 2005 issue of iSixSigma Magazine, entitled “Starting-up Six Sigma.”

In the early 1990s, the CEO of a large chemical company told his sales managers that they had to start sharing ideas, documenting their processes, and defining a best practice that would make all the salespeople as effective as their best person.

You can probably guess that this directive didn’t go over well. The most successful salespeople were very protective of their methods. They were paid on commission and were promoted based on internal competition, so where was the incentive for them to focus on process improvement and share their secrets with co-workers?

The sales function has commonly been regarded as special and therefore exempt from scientific analysis. (Which may explain why iSixSigma research shows that only 28 percent of companies are applying Six Sigma strategies to sales.) But this “special” status is something that any company interested in growth can no longer indulge. The fact is that sales and marketing are processes just like any other business process. They can be riddled with inefficiency, and hindered by variation. And they can be measured and improved.

GE began using Six Sigma to improve sales effectiveness in the fifth year of its Six Sigma journey, which began in 1995. “We found that Six Sigma isn’t only for engineers,” said Jack Welch, then CEO of GE. “Regional sales managers can use it to improve forecast reliability, pricing strategies or pricing variation.”

Similarly, DuPont started Six Sigma in 2000 and began applying it to revenue growth initiatives in year two. “Six Sigma brought a new focus on the voice of the customer. Customer input is valuable in driving research development, product development, and applications,” said Don Linsenmann, DuPont vice president and corporate champion-Six Sigma.

Handpicked Content:   Documentation Dilemma

Bombardier, one of the world’s leading manufacturers of planes and trains, is now in its ninth year of implementing Six Sigma. The company initially targeted areas that were easily measured and improved: cash flow, cost reduction, cost improvement, cost avoidance and efficiency improvement. Today, however, many of Bombardier’s projects are focused on increasing sales volume and sales margin.

Despite these successes, resistance to Six Sigma in sales and marketing is common. Typical attitudes are:

  • The sales process is an art, not a science.
  • Salespeople should be in the customer’s office selling the product, not anywhere else.
  • We’ll increase sales by having more salespeople.
  • We’d do a better job selling if (insert other department name here) gives us better (products, services, leads, etc.).

When faced with these attitudes, you can talk about processes and teamwork until you’re blue in the face without convincing a single sales or marketing person. Instead, get a few members of the sales staff together and have them walk through the steps they go through when making a sales call. Let them discover common steps (arranged in a process map) and where there are differences. Then challenge them to figure out whether and how the “differences” in actions make a difference in sales effectiveness. Tell them they have to show you data to support their conclusions, and boom! – You have your first Six Sigma project.

Projects related to sales and marketing are as diverse as: advertising/communication improvement, branding effectiveness, channel effectiveness, client relationship management, lead management, new market development, new product or service introduction, pricing process improvement, and sales effectiveness.

Handpicked Content:   Benched

If your business is struggling, your sales and marketing staff may regard being challenged to improve processes as a distraction. If your business is doing well, they’ll be even less receptive to change. Don’t let that stop you. Savvy business leaders know that Six Sigma is an imperative when a business is doing poorly. And using it under good conditions is one of the best ways to ensure continued growth.

Comments 1

  1. Incentive Programs

    We all seem to forget that retaining existing customers is typically 5 times cheaper than finding new ones.

    Customer service is one of the most powerful means of retaining happy recurring customers. Offering <a href="http://www.incentivesolutions.com/customerloyalty">incentive programs</a>, customer loyalty programs, and sales incentives is another powerful way to build a powerful customer relationship while branding your company as a success.

    0

Leave a Reply