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how can six sigma improve sale process

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  • #44620

    Smitty
    Member

    I am head of business development for my company and am currently responsible for defining sale processes; can six sigma help, has it ever been used to help define this area of a company? 
    if so how?

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    #143345

    Hans
    Participant

    I have been working with sales for many years, and my general answer is YES it can help. However, a six sigma professional would have to do a very in-depth “diagnostices” of what the current problems within sales are and how their processes (or lack thereof) translate into defects of operations. The professional would also need to understand that a key part of the “sales process” is a function of the performance of individual sales people who work within the parameters set by the organization.
    My main experience is that a lack of clearly defined sales processes translate into problems in operations, and to truly fix these processes they have to be fixed upstream in sales. Examples: (1) sales and marketing sell a new product, but the operations and billing implications are not thought through, (2) The cost of new acquisition versus retention: how are sales and operations tied to each other in order to avoid the loss of business and a level of net growth, (3) sales and account set up: what is the process and what implications does the current process have downstream (operations/billing etc.), (4) Marketing intelligence and sales: How do sales people get leads and how is marketing intelligence distributed across the organization to ensure that operations and other functions understand what is going on in the market (I once worked on a competitive database the information of which was distributed to the entire organization). It was an eye-opener for operations because sales and operations work based on conflicting priorities. Operations wants to push its current competencies into the market (we need to educate the customer :-). Sales is a driver of change and drives operations crazy because it requires so much “special processes” resulting in additional work for operations. .
    The key is to ensure that the processes are linked and not built in isolation. Most of my projects right now comprise input from all critical areas including sales. This sounds trivial, but the key to success is not how sophisticated the tools are used to develop/improve the processes but to ensure that effects downstream are minimized.. In Goldratt’s terms you want to push the “constraint” (i.e. your limitations to effectively service the needs of the customer) as much into the market as possible: From operations to sales out into the market. You are better off if you have higher demand than you can supply (Economics 101). This in addition to generating fast and defect-free defect should be the goal. This also means that accounting and finance need to be included into the roll out strategy. I may sound like I am rambling but I have been primarily concerned with these issues over the past few years. So I don’t care if the approach is “pure” Six Sigma or “pure” Lean or “pure whatever”. Your leadership will be the most critical part of the success of the initiative. Without making any advertisement, I have found that the George group and the Goldratt Institute have made the biggest impact on integrating sales into an overall “business improvement” strategy for the organization. Regards.

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    #143347

    Orang_Utan
    Participant

    I think the poster wanted to know is how to improve sales process from the micro perspective. Of course I agree with you that the weak linkage with other fuctions shall be addressed first before talking about how to improve sale process.

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    #143349

    BB
    Participant

    In a word … NO. 
    Don’t waste your money.

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    #143350

    Hans
    Participant

    Orang Utan,
    As a “head of business development” I would be very surprised if he/she wouldn’t want to look at the strategy of implementation. If not, I’d be scared as a CEO.
    BB,
    I am glad you are only a BB. Obviously you are no material for either MBB or Six Sigma leader. Keep on doing what you are doing and get the marching instructions from those who have the experience. What an unsubstantiated statement! Be silent of what you cannot talk about, but philosophy or business strategy is obviously way beyond your educational, or professional level of maturity. This is a professional forum, and comments like these bring down the level of the interaction to a kindergarten level. Yeah, and spare me the cheap shots … there are plenty of them and they they are getting more and more primitive and boring on this site.

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    #143352

    Fontanilla
    Participant

    What utter nonsense. What Hans really means is that he has been selling 6 sigma for many years.
    Yes, six sigma is great for sales … as long as you are selling six sigma not buying it !
    I can just imagine how your sales team is going to react … you will be their laughing stock !
     

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    #143353

    Hans
    Participant

    Dan,
    This is utter nonsense! I will not throw around my credentials on this site, but I am getting tired of the deteriorating level of information provided on this site by a certain segment of respondents. Yes, it sounds smart to make smart-ass comments. That may look really cool on the surface. However, it does not substitute for substance. I am not a consultant, and have no interest in this business. I get the job done that the kinds of you and BB are obviously uncapable of (and I am glad that my BBs and MBBs are of a very different caliber). The fact that you have not figured out how to get the job done does not mean that I and some experience othersl have to live within the parameters of your education, skill and motivation. I don’t settle for the lowest common denominator. But if you want to demonstrate your level of competence (or lack thereof) publicly, please feel free to make a public fool of yourself. There is obviously a certain segment of respondents on this site who enjoy demonstrating their lack of substantial knowledge and their low skills level. Feel free to be part of that group. But don’t expect me and some others to be impressed.

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    #143354

    Sweta / Mintu
    Participant

    Six Siga is very super-business and super-everything and it is taking steroids.  We all beliv it because Mr Mikel say it true.  And we not on drugs when we say this.  All consultant here even train rock climbers and pop star in Sic Sigma. Sales no different to anything. We happy to take everyones money.  You be very happy to pay us much more than anything else.

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    #143355

    Hans
    Participant

    Smitty,
    Unfortunately, there is almost a script out there that those with a superficial knowledge of six sigma follow who have no substantial contribution to make to the subject of your original question or many other questions. If you are serious about your inquiry and you don’t want to read through the freshman level boring and repetitive “C student level jokes” of those Six Sigma novices feel free to contact me at [email protected]. I am not a consultant but was and still am in charge of implementing six sigma in the area that you are interested in. Also, my primary fields of research are consumer behavior, marketing research and the link between six sigma and marketing. I would be very interested to have an intelligent exchange of ideas.
    Orang Utan,
    Please be assured that I am not counting you as part of the above-mentioned group. Your professional accomplishments and posts are testimony to the level that you are operating at. I truly enjoy and benefit from them. Unfortunately, issues of strategy and particularly sales are not part of the typical curriculum of Six Sigma. So in a way I cannot blame most six sigma professionals below an MBB level to be unable to make substantial contributions to the topic. You may be right with your assessment, but I would be very surprised as I noted before. Sincerely!

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    #143357

    Sweta / Mintu
    Participant

    Smitty,
    Yes, with Sic Siga we make money, not sense.

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    #143359

    Hans
    Participant

    Praveen,
    On the evolutionary ladder of responses on this site, one step below unintelligent response to a serious question is a boring response. Thanks for saving us all a sleeping pill tonight… Yawn!!!!!!!!!!!!

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    #143362

    Anonymous
    Guest

    Smitty,
    Let me give you an example from the world of optical retail.
    Now marketeers love sales targets: unfortuantely, their definition of targets rarely show any knowledge of the business, and they spend most of their time in ivory towers, or running training where people have to ‘pass the grapefruit,’ answer stupid ‘behavioral’ questions followed by a ‘put-down’ where they’re berated for being ‘passive,’ or not self assertive, or something else.
    Some people are heroes one week and zeroes the next – all because of statistical variation!
    Sometimes the zeroes come from the most successful stores in the country, and even win awards – from the same stupid sales organisation!!!
    As I like to be specific, here is an example where sales and marketing management go wrong.
    In optical retail one of the most important metrics is the ‘conversion rate’ – the number of sight tests that are converted into glasses. As a consequence the worst performing optometrists (people who perform clinical evaluations) are those who have a moderate converstion rate, but very low ‘non-tolerances (returns) or complaints. But the so-called best optometrists have a high conversion rate, high level of waste, and a low throughput.
    Even a mindless person ought to be able to factor in these losses and come up with a combined, multivariate metric – even if they know noting about the Pricing Waterfall.
    Does this sound familiar – yes, it’s just a common sense version of the Six Sigma story.
    Regards,
    Andy

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    #143370

    Ken Feldman
    Participant

    Smitty,
    A fair question but obviously minimal experience from the tone of the responses.
    I am working with a company which employees approx. 4,000 field sales people along with numerous marketing people.  There is a special challenge in applying SS in a sales/marketing environment.  Some of these are; lack of process thinking, lack of good process performance data, balancing time working on improvement versus selling, large variation in how people do things and difficulty in linking improvements directly to changes in sales.
    We have had some great success in, as you suggest, just doing some Value Stream mapping of the various sales processes.  We have successfully applied improvements in such areas as; targeting, call frequency, compensation/incentive plans, messaging, advertising, public relations, promtional materials, sales performance metrics, exhibits/conferences, samples, hiring/training of sales reps/managers, onboarding, call planning, collateral material, forecasting and new product launch.
    Sales reps seem to want to be engaged and are willing participants in VOC surveys as long as there is balance between helping to make improvements and taking time away from them being in the field.

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    #143371

    Hans
    Participant

    Darth,
    I take the liberty to exclude myself from those who have “minimal exeperience” in this area.
    I agree with your projects and approach. Would you also agree that for most of the projects that you mention the Six Sigma tools are very simple (Organ Utan mentioned value stream mapping, which I have used very often as well in this context). My other observation is that the big benefit of Six Sigma are the thinking through of the needs, the creation of the awareness of the importance of processes and the organizational structure offered by Six Sigma in order to prioritize, coordinate and execute these project. Have a sunny Saturday.

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    #143381

    Adam
    Participant

    I believe it works because I’ve seen it work and have personally made it work. We are doing more with less while increasing quality.

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    #143389

    Sweta / Mintu
    Participant

    Good Mr Hans good enough even teach even monkey Sic Sigma.  Lots monkeys here !!  Monkey and saleman of course these day, need Sic Sigma for:  Student-T test, control chart, ANOVA, hypothesis testing, Pareto chart, Box-Cox analysis, DOE.  Must have Sic Sigma make monkey and saleman to swing thu trees wit good quality.
    Please give lots of money to good Mr Hans so he make good monkey out of you.
    PS: Good Mr Hans also teach elephant Sic Sigma !!!!!!!

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    #143391

    Vito
    Member

    Smitty,
    You may enjoy reading the following article:
    https://www.isixsigma.com/library/content/c040112a.asp
    Cheers!
    Vito

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    #143394

    Hans
    Participant

    Praveen,
    On a more serious note, I know I was harsher in my response to you than I should have been. So to put it on the records, please accept my apologies. If you have integrity (and I am one of those older people who still believe in this kind of thing), you’ll accept my apologies.
    P.S. I would like to comment on your main argument though: “Hans good enough even teach monkey” (an aphorism more Nietzschean than meets the eye, and this is why: 
    If you read the work of Volkelt (1914), Otto Selz (1924) and Wolfgang Koehler (1925) you may come to appreciate how much monkeys have taught us about “error elimination through trying out behavior” (The topic of Karl Popper’s dissertation from 1927, which was based on Otto Selz’ theory of thinking). As a result, the learning from monkeys set the foundation for the modern school of philosophy of science that I feel the closest asscociated with: Critical Rationalism. Through the immigration of the students of Koehler to the United States (he stayed in Germany but had to abandon teaching in 1935 due to his opposition to the Nazis) and their close collaboration with the war efforts in the United States, this general approach to problem solving became incorporated into the problem solving methodlology associated with: Plan Do Check Act (i.e. learning through trying out behavior, i.e. experiments etc.) This as we all know is the forerunner of the DMAIC methodlogy. This general approach to problem solving also set the foundation for Fisher’s approach to interpreting the alpha value (see Fisher’s reply to Neyman from 1935/1955).
    By contrast Neyman’s approach and who also worked in close collaboration with the American defense ministry and Deming, Wald etc. at Berkely during World War II subscribed to an associative interpretation of the alpha level (inductive behavior).
    The irony is that while Six Sigma uses a problem solving methodology (i.e. a dynamic approach) that can be traced back to the earlier studies of monkeys, the statistical tools that it uses to support its problem solving approach are based on a decision-theoretical model that is based on the opposite approach of problem-solving (i.e. a mechanical approach). The ramifications of the origins of the problem solving approach used by Quality and Six Sigma is the fact that they are so flexible. By contrast the usage of statistical tools has been hampered by the fact that their approach is based on a more mechanical model.
    Thus, you correctly position me within a tradition of a flexible and dynamic approach to problem solving that is founded on the research of monkeys. Ironically, the monkeys have taught Hans’ (and some much more renowned people) how to solve problems. Given Darwin’s earlier findings about the origins of men, I don’t feel that bad about your response. As a matter of fact, Nietzsche said in his introduction to “Morgenroete”, The Greeks: superficial out of depth. It appears to me that your response has quite a bit of depth and I didn’t want to get that lost in the temporary swirling of emotions of the thread. I think you deserve some respect for your reply. Warm regards (not meant ironically).

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    #143395

    Anonymous
    Guest

    Praveen,
    Your spelling of ‘sigma’ is correct :-)
    Andy

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    #143397

    Hans
    Participant

    Vito,
    Thanks for pointing to that link. It looks like a very useful and concise summary of the application of six sigma to sales, and seems to be very user-friendly as a first communication to sales about how six sigma can support the sales process. I am glad six sigma is still alive and well. Regards.

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    #143403

    Marlon Brando
    Participant

    SS  is  mainly  for  process  improvement.There  are  several  other  methods  to  improve  the  sale  process.I  don’t  recommend  to use  SS  every where?? 

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    #143405

    Vito
    Member

    Marlon,
     
    Therefore, if a given sales process has been defined to have the following basic functions: Prospecting; Getting Appointments; Qualifying; Problem Identification/Clarification; Presenting; Answering Objections; Closing; Follow-Through and Delivery; and Resales and Referrals, would you use Six Sigma to improve the process? If not, what method would you use, from the “several other methods?”
    Vito

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    #143406

    Orang_Utan
    Participant

    In certain countries, sales are from how good your bribery process. :-)

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    #143409

    Cosmo
    Participant

    Hans, I respect your passion for this methodology.
    BB, I drive sales process in my company and my last 4 to5 six sgima projects were in sales. I just completed training all sales team – now I wouldn’t be wasting time or money (as you put it) if I didn’t see the value. So, if you want a career in Six Sigma – please get out of your shell and see the big picture.
    Now, open ur mind and apply it anywhere you want and if you think can’t then I would just going back to training becoz anyone who thinks or feels that it can not be applied everywhere completey missed the point.
    Cosmo

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    #143410

    Anonymous
    Guest

    Orang_Utan,
    It’s more subtle over here. If you’re a procurement manager, what you do is set of a ‘contractor’ company and only do business with them. This is where the second part of the new NHS funding went. The first part went on the so-called QOF payments to GPs, by setting targets too low.
    If anyone wants to know how not to do something, the UK is an ideal model.
    Andy
    Cheers,
    Andy
     
     
     
     

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    #143412

    Marlon Brando
    Participant

    Lean-SS

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    #143413

    mand
    Member

    So, you’d still use SIX SIGMA to improve the SALES Process while including Lean principles, as several other methods!

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    #143419

    sathish chandran
    Member

    Hi,
    Six sigma can be used in your case; let me share my views and experiences on this.
    Sales is number driven. The first thing / big thing in sales is getting numbers done. Having said that, the start point is those targtes.
    Now which metrics to chase and measure is dependant on the business maturity and the focus, example (No.of new accounts – Profit from an account – Number of years of Business relationship with an account – project different levels of business maturity.)
    1.Now we need to work backwards from this. Which means map your existing way of sales process (in case the processes need to be defined for the first time go with the should be process flow).
    2. Collect data and base line it.
    3. Use the DMAIC approach and ensure the learnings  / controls are reflected back in the revised proces.
    4. Refine your sales metrics.
    Typically the metrics for the Business on the sales performance would be;
    1. No.of new customers acquired.
    2. No.of Inactive customers.
    3. Contribution client wise.
    4. Sales person to expense ratio
    5. Share of business Company has got in the total opportunity
    6. Sales processing metrics – Lead time to respond to a call, time spent with customer, Number of meetings required to convert an opportunity to sale etc.
    hope this provides an insight.
     
    with regards
    sathish
     

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    #143420

    Marlon Brando
    Participant

    Agree

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    #143424

    Deming follower
    Participant

    Here’s a paper you may find useful on sales analysis:
    http://www.spcpress.com/ink_pdfs/Selden.pdf
    You might also read “The Six Sigma Zone” at the same site:
    http://www.spcpress.com/spcink.htm
     

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    #143425

    ABC
    Participant

    Dear  Mr. “my credentials are too precious to be thrown here”, it’s true for you too.  Don’t expect to impress anyone here. At least, you are just writing generic words, till now, anything else.

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    #143426

    Michael Webb
    Participant

    Six Sigma definitely applies to finding, gaining, and keeping customers.
    There are crucial differences between applying Six Sigma in sales and marketing, and these differences are the reason it has taken so long for these functions to begin adopting the method. The laws of the scientific method and applied statistics don’t change, but how they apply and what gets measured definitely does. The culture of marketing, sales, and service generally do not have the process-oriented foundations that make it an easy transition from manufacturing.
    People have to begin recognizing that the product of sales and marketing activity is actually a series of actions on the part of prospects and customers, only one of which is placing an order. Those customer actions are what you have to measure, since you can’t see value being created like you can on the shop floor. Unfortunately, some companies have to basically start from scratch defining their processes in this arena, which can be scary. Also, even the best business schools continue turning out executives with functional rather than process mindsets, it is no surprise that the culture (especially of senor managers) is blind to the problems that functional mindset creates.
    Nonetheless, companies are successfully winning business by applying Six Sigma in three ways:
    1) Improving their revenue production system: Marketing, selling, and servicing is an integrated production system, thus leads, opportunities, and deals are analogous to raw materials, WIP, and finished goods. These companies are establishing a proper process to measure value creation (i.e., customers actions), which leads them to re-think things in terms of lean, TOC, and reducing variation. Inevitably they discover opportunities to gain advantage in the market, because competitors have not gone down these paths.
    2) Improving their ability to engage with the customer’s business: The sales profession is moving in the direction of being accountable for creating customer value. These companies are beefing up their sales processes with Six Sigma style tools to better understand their customer’s processes, base line performance, causes of variation, and how their products and services can improve the customer’s results. The sales process itself becomes a kind of Six Sigma project conducted with the customer, on behalf of the customer.
    3) Giving Six Sigma teams to the customer. This has been done for years by GE and a few other leaders of the Six Sigma movement. While it seems altruistic, it has proven to be a powerful means of building relationships, gaining better understanding of the customer’s problems, and improving their resuts. Companies who do this get rewarded with opportunities for bigger, better, and more profitable relationships.
    You can read about it in a recently published book:
    “Sales and Marketing the Six Sigma Way” (Kaplan, Aug 2006:  http://tinyurl.com/gtpov). The book describes the general application of Six Sigma to sales and marketing, and includes case examples from companies like Standard Register, HSBC Bank, Johnson & Johnson, Motorola, and many others. It is written for general management and sales and marketing executives, and makes a good introduction to the topic of Six Sigma for them.
    Further, you can read about ongoing developments in the industry at http://www.sixsigmaselling.com. There is additional articles on http://www.salesperformance.com.
    Michael [email protected]

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    #143427

    Anonymous
    Guest

    abc,
    I’m inpressed …
    Andy

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    #143431

    Ken Feldman
    Participant

    I was impressed when he said that he knew that the Pope was gay.  I assumed that all Catholic priests where straight…..I just crack myself up.

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    #143433

    Anonymous
    Guest

    Having visited Midenwald once – nothing would suprise me!

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    #143434

    Hans
    Participant

    Darth,
    Thou shalt not reveal the secret! Thou shalt be discrete :-)))). Publicly saying what is common knowledge at a Catholic Theologian Seminary is the only sin that even the most pious and faithful cannot be redeemed from (The most joyous of all German Holidays is the “national day of Prayer and redemption” … that tells you how screwed up some of my fellow citizens are held in November and the day with the second highest suicide rate of the year :-)… I guess there is no hope in saving you from the dark side :-)))). So, Okee-one-kanobee, you’re my only hope!  

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    #143435

    Hans
    Participant

    Mittenwald – Germany : Ski Resort and Cultural Centre (oops :-).
    Mittenwald is a market town nestled on the border with Austria (oops, I can hear Arnold jodling). The Austrian ski resort of Seefeld is just 15 minutes drive away in one direction, while one of Bavaria’s ritziest mountain towns – Garmisch-Partenkirchen – is a slightly longer journey to the north along the country roads of southern Germany

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    #143436

    Cosmo
    Participant

    I must say one thing, why is everyone so personal on this forum? just saw some previous replies from people…..could we just focus on helping the guy who started the post and not worry about our own point of view about each other and religon. Please!
    Smitty, I found Michael Webb’s website and material very helpful and recommend to go through them once. I haven’t read the book “Sales and Marketing the Six Sigma Way” but am planning to.
    Basically what you need to convey is that “Sales” is a process and once that’s established, any process can be improved and so can Sales. There is no doubts about it. There are lot of white papers here on isixsigma where you can start to educate yourself and then plan your deployment. Just type Six Sigma for Sales and search….
    One more thing to notice – it MUST be Top Down approcah – meaning you need to get VP of Sales involved and then the next level and then next level.
    Good Luck!
    Cosmo

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    #143437

    Hans
    Participant

    Cosmo,
    I guess that is the price we have to pay for free speech in internet lala land. But I’ll gladly pay that price. I would hate to live in a country where Google and the government decide what can and what cannot be said. P.S. I sent you an e-mail with my prediction! Have a great day.

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    #143439

    Anonymous
    Guest

    Hans,
    I have to say: without a shadow of doubt it is the worst place I’ve ever visited.
    Andy

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    #143446

    Fallen Angel
    Participant

    Have you ever noticed????

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    #143450

    Fallen Angel also
    Participant

    Captured in Vatican City.   Darth aka Pope exiting from a high tech excrement evacuation chamber.

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    #143451

    Fallen Angel 3
    Participant

    Even as a child, the Pope had trouble keeping his foot out of his mouth.

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    #143500

    NPope
    Participant

    Smitty:
    The most common application of Lean / Six Sigma for “defining sales processes” has been through the Value Stream Mapping tool.  This approach allows an organization to clearly understand and align around the current processes — with cross-functional input and insights.  Then, the process is analyzed (looking for delays, re-work, process breakdowns, customer value vs. non-value), and a new Future State process is designed which incorporates improvements in velocity, quality, customer value.  If you have a trusted group of customers, best results are achieved by including customer representatives in the Value Stream Mapping exercise, so that you have direct voice of customer input.
    I recently attended a 5-day workshop, in which the sales process for one customer segment was completely re-built within 5 days.  The field reps and inside customer service did NOT want to make the changes when we started — but with the change management components built into the six sigma workshop, the organization was aligned and actually eagerly supportive by the Friday of the event.  In the first month, sales in the test group increased by over 40% while sales in the control group (we tested the new process with a test and control group) declined by 18%.
    Happy to provide more info if this is in a direction that meets your needs.

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