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SS in Sales

Six Sigma – iSixSigma Forums Old Forums General SS in Sales

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  • #44986

    melvin
    Participant

    My sales department has just been trained in SS.
    In the past we won about 20% of deals we bid on.
    How in the b**** hell are we supposed to only lose 3.4 orders in a million ?   I think our management has been conned.

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    #145455

    Andhale
    Participant

    Hi,
    The idea of applying SS to sales is not to increase your conversion ratio from 20% to 99.99966% …
    Six Sigma is a Improvement methodology(DMAIC/DMADV), the idea is to take up a project and take a target to improve the conversion ratio up from 20% to 40% (example)

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    #145456

    Yadav
    Participant

    Bob,
    You need

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    #145458

    Yadav
    Participant

    Hi Bob,
    Definately six-sigma methodology can be used, to improve the success in bid. How much should be target is a million dollor question?
    I would have been in your management’s place, I would try to answer the following questions, before deciding on the target:
    a. What is the indutry benchmark?
    b. Competitor’s having similar resources and infrastructure, how are they performing and what is the best among them?
    c. Is their any fundamental problem in our process, which is acting as a constraint to match the best in the industry? If, yes, then address that constraint first and then take up the six-sigma project.
    d. Usually six-sigma tools are used to improve a metric by atleast 70% and this should be your target unless and until, your process is designed in such a manner that you can never acheive that target. This may seem to be theoratical, but you have to give a deep thought when deciding the target.
    Hope this has helped you to get a proper prespective in applying six-sigma at your workplace.
    Ajit

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    #145471

    Eric Maass
    Participant

    Bob,
    I can understand the confusion. Your manager and your sales department needs to define the goals and metrics – if someone were crazy enough to define each loss of a deal as a “defect” and make that a metric, and set the goal as achieving a Six Sigma level in this so-called “defect”, then I guess you might have the situation you describe.I would suggest that you NOT define each loss of a deal as a “defect”.  It would drive bad, perhaps stupid behavior (in your example of currently winning about20% of deals you bid on, people might only bid on deals that they knew they would win…which would improve the metric of % won but might mean you only bid on very, very few opportunities – which would lead to less business).So, the sales department should define their goal (Define) and then their metrics (Measure), and should not define each lost bid as a “defect”. Then, they should understand the reasons for lost bids, perhaps using a Fishbone/Ishikawa Diagram and also gathering historical data.

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