Most of us associate Six Sigma with improving the manufacturing process. Originally developed by Motorola, Six Sigma is a data-driven approach toward improving process, quality and productivity. And the same practice, used by manufactures, can improve your marketing results.
The term Six Sigma comes from its intention to achieve quality (absence of defects or errors) within six standard deviations from the mean (average); which translates to a maximum of 3.4 defects or errors per million.
Impressive standard; however, I’m suggesting more of a mindset than a metric. Michael J. Webb, president of Sales Performance Consulting, put it well in an iSix Sigma Magazine article, “As in any process improvement effort, the key question to pose in marketing is: ‘What value does your activity create for the customer?’ ”
A typical Six Sigma project involves five sequential steps — define, measure, analyze, improve and control otherwise known as DMAIC.
You don’t need to be a “Black Belt” to incorporate Six Sigma as an approach to improve the results of your marketing activity. Following are DMAIC descriptions and examples of how they can apply to your organization’s marketing activities.
Define the problem area you want to improve by developing a “problem statement.” Then determine the team, objectives, resources and timeline. Incorporating the “voice of the customer” is a critical Six Sigma success factor.
Here is a problem statement example: The sales conversation ratio is too low to continue supporting the current marketing budget. The project team’s objective is to improve the sales conversion ratio by 300 percent within 12 months.
Measure the process to determine the current performance level. Decide what data is required to establish a baseline; then collect the data.
In the case above, the key metric would be sales conversion ratio. In other words, how many prospective customers who inquire about your service are converted into a customer. Example: The current “inquiry to sales” conversation ratio is 1:20. Based on the problem statement, the objective would be to increase the conversion ratio from 5 to 15 percent.
Analyze and determine the root cause(s) of the problem. The objective is to understand the current process well enough to formulate viable options for improvement. By conducting a root cause analysis, your team may find that the primary breakdown in conversion is that the current marketing activity generates low quality leads.
The two most common tools used in conducting a root cause analysis are the “Five Whys” and “Fishbone Diagram.” Google those two terms and you will discover simple ways to conduct your analysis.
Improve the process by dealing with the root cause(s) of the problem. Identify, test and implement solutions to resolve breakdowns and improve your process. In staying with the same case, here is an example: Based on a customer survey, reposition the selling proposition and media to target a higher quality market.
In this fourth step, be sure to test your assumption, as to the solution to the root cause problem, before fully implementing the fix.
Control future processes and performance. Institute a tracking system to maintain process enhancements over time. Develop standard operating procedures and constantly monitor activity and results. Example: Conversion ratios will be reviewed at weekly management meetings. This last step will keep your team from slipping back to old habits and activities.
Following the linear DMAIC progression will serve as an effective project management method and help you uncover opportunities that will likely lead to greater return on marketing and sales investments. Another important Six Sigma success factor involves appointing a champion to oversee the project and conduct “toll gate reviews” (process checks) at each DMAIC milestone to assure the project stays on track. This will facilitate better reporting and real-time tweaks as necessary.
Use Six Sigma as a philosophical and data-driven approach toward improving your marketing process. A Six Sigma mindset will generate greater customer value … and that usually translates to better results.
Andrew Ballard is president of Marketing Solutions, an agency specializing in growth strategies. For more information, call 425-337-1100 or go to www.mktg-solutions.com.