Every sales force has a few outstanding sales representatives, who always deliver on or above target. What is it, in their way of working (process), which makes them so outstanding? If we identify these processes and give them as tools to the rest of the organization, our belief is that we will increase sales force effectiveness. – Business Leader, Brandco, a Fortune 100 Company
Brandco (a fictitious name), a predominantly sales- and marketing-driven company, has shown that not only does Six Sigma apply to sales and marketing, but the benefits are twice as great as one normally experiences in applying Six Sigma to operations processes.
These are the typical concerns of a sales director who is confronted with sending his best salespeople to Six Sigma training:
- How to maximize the time spent off-line (i.e., being trained in Six Sigma techniques or working on projects rather than selling)?
- How to work on enough of the overall sales process to have a significant impact rather than divide into sub-processes (e.g., qualifying sales opportunities) that by themselves will not drive increased sales?
- How to avoid duplication of effort by mass training of sales representatives who are all working with similar processes (i.e., how to leverage and build on the experience of the first successful sales improvement projects)?
- How to get the buy-in of different salespeople, by product line or country, to using the best practice sales processes?
- How to measure sales force effectiveness?
The over-arching goal was to improve the processes that contribute to more sales per sales representative. The idea was to use Six Sigma to help identify, capture and keep more business with the same or fewer resources.
Scope of the Projects and Selection of Project Leaders
The organizational challenge was how to work on areas of improvement substantial enough to make a meaningful difference and yet not make the projects too complex. By clustering projects around a common theme (e.g., identifying qualified sales opportunities), individuals could work on sub-processes while contributing to a larger improvement (e.g., the overall tendering process). Workshops were conducted with sales executives to scope meaningful projects across the spectrum of sales and marketing processes below.
|Segmentation of stakeholders||Ireland|
|Increasing effective selling time||Germany|
|Planning and conducting sales calls||Hungary|
|European list and floor price setting||Europe|
|Changing European floor price||Europe|
|Increasing pricing for products below European floor price||France|
|Defining/qualifying sales and market opportunities||Spain|
|Developing offers that result in winning all qualified potential||Portugal|
|ROI on professional education courses||Germany|
|Impact of professional education on sales||Germany|
|Re-launch Existing or redesigned products||UK|
|Capital appropriation and selling process||Europe|
|Reducing the cycle time for sales||UK|
|Improving the sales value of consignment stock||Hungary|
|Process for effective use of health economic related information by sales representatives||Italy|
Each project leader had two deliverables: a “to be” process that solved the problem presented to him by his local sponsor and a “best practice” process that could be adopted by others across the region.
The participants were sales and marketing managers responsible operationally for the processes on which they were working. A number of the participants were clearly opinion leaders and respected as high-performers in their respective businesses.
Structure of the Effort and Leveraging Across the Region
In order to create reference projects for the European region as well as processes that could be adopted broadly, regional representation in the project was needed. The approach taken was to combine the formal Six Sigma Green Belt training with small group workshops and individual coaching. This allowed each project leader to present and get input from their regional colleagues while they themselves learned the Six Sigma methodology.
It was recognized from the outset that the biggest benefits to the business would come from leveraging best practices across the region. It was the responsibility of a steering committee to drive that leveraging.
Several elements were critical to capturing “the big dollars,” namely process-oriented dashboards reviewed regularly by local managing directors and the e-enablement of sales planning and execution processes.
Broken Myths About Sales and Marketing
The hardest things to learn were those things everyone believed they already knew. The value of a structured, data-driven approach to improving sales force effectiveness is that it challenges assumptions about what drives sales. Some of the insights were:
- Sales call planning – Activities are managed more than objectives; Sales management tools control activity quantity rather than improve the quality of sales calls.
- Stakeholder management – Top-performing salespeople target stakeholders who are the most influential, while average performers call on their friends.
- Pricing – There is no correlation between price discounting and volume.
- Professional education – Formalizing selection and follow-up is critical for improvement of revenue generation.
- Capital appropriation – Each country has a different forecasting method, but it is possible to harmonize the forecasting method.
- Setting European list and floor price – No data-driven process has existed for this critical issue in the past.
- Tendering – It is very surprising that 27 percent of all minimum quantities are missed, considering this minimum is contractual commitment from customers.
- Effective selling time – Out of a 10.4-hour working day, sales representatives spent 3.5 hours driving and 3.5 hours on non-selling activities.
One participant confessed, “I have been selling for seven years, but it wasn’t until now that I really understood what effective selling was about.”
During the course of the initiative, the project leaders went through the normal stages of a Six Sigma project – initial skepticism, hope, exasperation, insight and breakthrough. In retrospect the participants highlighted the following lessons learned:
- “Just by looking at our sales processes more closely through the Six Sigma lens, they start to improve.”
- “Sales people are interested in the science, not just the art of selling.”
- “The lack of standardized processes is a barrier to proliferating know-how across and between businesses.”
- “Standardizing the (tendering) process has reduced errors by 20 percent and time by 40 percent.”
- “Clear operational definitions of expected outputs, inputs and process steps are vital for a marketing process like product conversion.”
- “The fewer the steps and people involved in the (tendering) process, the higher the quality of our analysis.”
- “The time spent up-front clearly scoping projects with your Sponsor, pays off later.”
- “Jumping to solutions is bad business practice.”
- “Do not underestimate the workload involved in the Six Sigma project, but also don’t underestimate the value.”
The managers started as a very mixed group, different businesses and each with a different understanding of how their individual business worked. Through the experience they learned a common language that allowed them to get to the substance of what each was doing. That was the key to learning from each other and reaching a new level of performance.
Results and Conclusion
Seventeen of the 18 projects launched were successfully completed with a net annual benefit of $8 million. The solutions developed are now being leveraged from the original five countries and two businesses involved to a total of 10 countries and four businesses for an expected annual benefit of $50 million.
In sales and marketing, Six Sigma not only applies but can yield greater financial benefits than in operations, on average $300,000 per project (unleveraged outside respective project scope). Because processes are initially less well-defined, it pays to invest time in carefully scoping the projects with those sponsoring them, i.e., conduct scoping workshops with sponsors before anyone goes to training. Cluster related projects together to get the full desired effect while keeping the individual projects manageable. Enroll senior managers as project leaders. They will see that the “to be processes” get implemented. Maximize the use of the time sales and marketing people are spending away from customers, structure the training and project work into a series of shorter, more frequent workshops. Accomplish as much of the project work as possible in the workshops. When working across business units and countries, create a very senior level steering committee to help identify and work toward common goals and leveraging of results. Dedicate someone full-time to structuring and managing the initiative.
Keeping 18 opinionated sales and marketing managers aligned is a challenge. Beyond the financial contribution of the projects, the participants improved their skills as managers and change leaders. Adding science to the art of sales can dramatically increase sales effectiveness.