Six Sigma and Business Marketing

8/3/2019 Six Sigma and Business Marketing

1/66

2005 Joint ISBM-CBIM ConferenceSix Sigma and Business Marketing

Institute for the Study of Business MarketsCenter for Business and Industrial Marketing

1

The 11th Annual Joint ISBM-CBIM Conference

Six Sigma and Business MarketingFebruary 16 - 17, 2005

Atlanta, GA

6

2005, ISBM & CBIM

Presentations summarized:

Valerie Mason Cunningham,Xerox Corporate Marketing Services, Xerox Lean Six

Sigma Marketing Pete Pande, Pivotal Resources, Pulling the Focus Out: The Basics of Six Sigma and ItsApplications to Business Marketing

Jane Hrehocik Clampitt, DuPont Consulting Solutions, Applying Six Sigma to Marketingat DuPont

Gordon Schwartz, MarketBridge, Performance- Driven Marketing: Applying Six SigmaPrinciples to Demand Generation

A. Charles Clark, Dow Chemical, Six Sigma in Sales & Marketing? One Black BeltsExperience in Process Improvements

(list continued)


2/66



2

Presentations summarized (continued):

Roundtable Panel Discussion, Marketing Process Improvement and Six Sigma: Whynow? When will it work? When wont it? Questions and answers. Pamela J. Roach, Breakthrough Marketing Technology, Delivering What Customers

Value: The Quest for Excellence Kevin J. Clancy, Copernicus Marketing Consulting, Six Sigma Dreams, Half SigmaRealities Jean M. OConnell, 3M Company, Business Marketing at 3M Using Six Sigma:The Company Project Approach Patrick LaPointe, MarketingNPV, Six Sigma or Not: Building better, more effective,more accountable marketing in todays complex B-to-B Organizations

2005, ISBM & CBIM


3/66



3

Xerox Lean Six Sigma Marketing:

Strategic and Tactical Impact

Valerie Mason CunninghamVice PresidentXerox Corporate Marketing Services

[email protected]

Keynote address:

2005, ISBM & CBIM

Key insights from Valerie Mason Cunningham


4/66



4

Lean Six Sigma: our tool to put Xerox back on track after our 2000/2001 crisis.

More robust than Total Quality Management, which wed already gone through. Applied across the enterprise, with: Manufacturing & Design, to reduce cycle times and inventory drive out cost reduce time to market

Back Office, to reduce process errors eliminate process steps drive down cost

External Clients, to

create real differentiation via tools and skills to help clients achieve their goals enable continuous improvement enhance strategic relationships by improving the customer experience customers expect suppliers to contribute to their 6 initiatives

Lean Six Sigma provides metrics illustrating the return on marketing investment Adding Lean to Six Sigma reduces waste and increases process speed Following Lean with Six Sigma improves customer-critical quality and consistency

Our performance as of January 2005:1100 Lean Six Sigma projects, including 140 customer-facing projects; 520 active 6 Black Beltsand 1,763 active Green Belts in residence. 17,538 Yellow Belts trained online. More than 2,000 senior

executives completing leadership workshops


2005, ISBM & CBIM


5/66



5

Lean Six Sigma and Marketing: Its all about the customer experience

Just improving customer satisfaction and loyalty is a rear view mirror look. 50 million-plus customer touch points of all types annually

First project in my group, Global Accounts and MarketingImprove customer communication processes

providing the information customer requested reducing internal processes cycle times 40% by assigning ownership and simplifying processes email newsletter project DMAIC

Define customer needs via a voice-of-the-customer survey Measure Xerox performance and perceptions vs. competition Analyze VOC data Improve via email newsletter process owner and a new database

Control: e.g. 2,734 emails sent 2/5/04, 92% delivery efficiency; newsletter posted on xerox.comSecond project: marketing effectiveness dashboard D

eliver web-based, concise marketing performance metrics Opening screen (next slide) features click-through boxes to drill down to data (sample in the followingslide) in three core buckets:

marketing effectiveness branding

customers and the marketNext project: reduce collateral development cycle time W

eak up-front planning causes expensive revisions, greater agency spend, lost product managerproductivity and a longer creative cycle. Success will be measured by an overall collateral production spend of 10%.

Lean Six Sigma marketing clearly is a journey without end


2005, ISBM & CBIM


6/66



6

PublicRelations

Performance vs. HP

Market Share

Customer Experience Satisfaction & Loyalty

Inquiries

Leads

Campaigns withFinancial ROI

Customers &the Market

Branding

MarketingEffectiveness

Installs

Campaigns with Non-Financial Metrics

Net Adds

Web MetricsCustomer Wins

Unaided/AidedAwareness(First/AllMentions)

Office Printers

OfficeCopiers/MFDs

ProductionPredisposition

Awareness

Consideration Waterfall UncontestedWin Rate

Contested Win Rate

MDM Share

Corporate Marketing Dashboard Key MetricsCorporate Marketing Dashboard Key Metrics

Page Volume


2005, Xerox Corp., ISBM & CBIM


7/66



7

Whoosh Phaser 7300 Wave 3Program Target Program Results Status R/Y/G

PROGRAM DETAILS

Program Investment Cost ($) $150,000 $145,000

Number of Targeted Contacts 150,000 150,000

FINANCIAL METRICS

Number of Leads Generated 1,340 3,093Lead-to-Contact Rate (%) 0.9% 2.1%

Cost-per-lead ($) $112 $47

Number of Sales Generated* 107 247

Close Rate 8.0% 8.0%

Cost-per-sale (%) $1,399 $586

Revenue Generated ($)

Net Profit Generated ($)** $307,235 $709,163

Return on Investment (%) 205% 489%

NON-FINANCIAL PROGRAM METRICS

Number of Total Responses 6,696 16,452

Response Rate 4.46% 10.97%

Cost / response $22.40 $8.81

NOTES

OVERALL PROGRAM ASSESSMENT:

*10% close rate, 80% incremental assumed. **Assumes mixture of color and mono printer sales.Third wave of direct mail leadgeneration campaign featuring

the Phaser 7300 printer.

Program Name

Report Date & Purpose: 1-14-05 Final Results

Program Manager

Program Date / Duration

Measurement Period

Program Type

EMC Member Office (printers)

Phaser 7300 "WHOOSH" DM Wave 3

Print Direct Mail

Mailed October 8 - 12, 2004

Bonnie Gail

Oct - Dec 04




8/66



8

Case Study

Employed Lean Six Sigma methodology

Implemented remote control to minimize deskside

visits

Standardized operating system andIT environment

Moved administration offsite

Eliminated redundancy among vendors

Achieved savings goal of $1.2 million/year

Maintained/Improved customer satisfaction

across 5 key metrics:

Overall customer satisfaction

Knowledge of staff

Professionalism

Technical ability

Fix time

Client ChallengesClient Challenges

Intercontinental Hotels Group

Needed to cut costs to stay competitive during post-

9/11 travel downturn

While at the same time improving customer

satisfaction with IT support services

Measurable ResultsMeasurable Results

SolutionSolution

A leading hospitality company, managing

brands such as:

Holiday Inn

Crowne Plaza

Candlewood Suites

Key insights fromValerie Mason Cunningham



9/66



9

Case Study

Employed Xerox Lean Six Sigma methodology

Digitized and streamlined accident report

process

Created web-based document accesssystem

Integrated existing systems

Reduced cost of processing an accident

report from $28 to $8, ($500K/yr savings)

Reduced cycle time from as much as

3 weeks to less than 3 days Reduced time spent by deputies on accident

reports from 30 to 5 minutes

Created revenue stream from charging for

accident reports, worth $32K/year

Client ChallengesClient Challenges

Monroe County Sheriffs Department

Balance $100M budget

Improve quality of service in accident report

management Eliminate backlog of more than 3,000 records

and over 4 months of data entry

Free deputies from paperwork, so they can

spend more time ensuring public safety

Measurable ResultsMeasurable Results

SolutionSolution

New York States largest sheriffs office

Key insights fromValerie Mason Cunningham



10/66



10

Pulling the Focus Out:The Basics of Six Sigma and Its Applications to

Business Marketing

Pete PandePresident

Pivotal Resources Inc.

[email protected]

2005, ISBM & CBIM

Key insights from Pete Pande


11/66



11

Six Sigma is a system linking process management based on facts & data,

rather than opinions, to a focus on the customer. Emphasis is on the value creationprocess rather than individual functions. 6 raises employees from an inward focus to an external focus. 6 integrates many tools and concepts, involving both analytical and creative skills,tailored to a specific process, business, or problem.

Understand and satisfy customers more effectively. Drivers of satisfaction, loyalty, behavior, market share Monitor how were doing. Staying ahead of the competition?

Enhance efficiency Reduce variation, eliminate errors and rework Expand internal capacity

Drive profitability Reduce operational expenses due to errors and rework Grow market share and share-of-wallet Increase revenue

Transform management thinking

More informed decisions, greater collaboration and focus Optimize flow of value to customer, and gains to shareholders


2005, ISBM & CBIM


12/66



12

Y =f(x1, x2, x3, x4)Promotion Process VOC Process

Six Sigma manages the critical business process Xs that determine

the process output Ys.


2005, Pivotal Resources ISBM & CBIM


13/66



13

Key Principles

All processes vary Variation is due to various causes: people, equipment, information, processes& procedures, environment. Too much variation = trouble.

We can learn from variation, the only way to know which Xs influence outputsand which create process defects.

Variation, not before & after averages, tells the story.

Change need not be expensive. Eliminate irrelevant Xs and the reject scrap

outside the customers requirements, caused by the bad Xs.




14/66



14

DMAIC Process: The Six Sigma Analytical Model

Define: describe the problem or pain, the goal, the outputs (Ys) Measure: gather data on the problem, the process, the customer Analyze: review process and data to identify causes (Xs) Improve: develop solutions; design processes Control: plan for stability

Six Sigma management focuses on a few critical Xs for each of 3 approaches Process improvement Process design/redesign Process management

Customer Focus with Six Sigma discipline: Customer requirements based on careful assessment Processes designed & run to fulfill customer requirements Multi-faceted Voice of the Customer effort Customer-focused data key to managing the business, short- and long-term

Customer focus withoutSix Sigma discipline:

Conjecture and assumption about what customers want Processes based on our convenience and cost Limited efforts at tracking customer satisfaction

Customer-focused data not communicated or used


2005, ISBM & CBIM


15/66



15

Law of the Ignorant Customer You need a multi-level VOC research process because every single methodology is flawed. Customers rarely, if ever, understand or can communicate their own requirements as wellas wed like, or expect.

They have otherimportant priorities Rarely are they experts in our products and services Customer organizations have silos, too! Priorities change to match their latest crisis They may not really understand their own customers requirements What they thinkthey know could well be wrong




16/66



16

Marketing & Six Sigma Challenges and Opportunities

Manage and improve marketing processes Understand your customer requirements and key Y Assess the Xs to boost effectiveness and efficiency For every service process, start by thinking about what youd need were the process outsourced.

Own and drive Voice of the Customer capability

Clarify objectives, gather data, formulate and assess hypotheses,communicate knowledge, support decisions Marketing operations have an opportunity to play a key role in company improvement.

Develop creative ways to deal with the Law of the Ignorant Customer Challenge current assumptions, yours and theirs.

Look a the broader supply chain. Seek to educate customers and your organization

Promote change as essential core competency

Key Q&A observations: The biggest variation in marketing projects is the revision process. Companies that focus mainly on hard-dollars, vs.. softer outputs, wind up doing cost reduction rather thanoutput improvement. Instead of succumbing to the please the boss approach, remember that its rare that only one functioncontrols the whole process. To see it all and see whos to blame for problems, start at the end of the process

and work backwards.


2005, ISBM & CBIM


17/66



17

Applying Six Sigmato Marketing at DuPont

The Science of Marketing

Jane Hrehocik ClampittStrategic Marketing Practice Leader

DuPont Consulting [email protected]

2005, ISBM & CBIM

Key insights from Jane Hrehocik Clampitt


18/66



18

How We Connect Our Science Capability to The Marketplace

Use Six Sigma as a common language and disciplined process across thecompany to improve our marketing and sales competency

Bring products to the marketplace that have relevance in the value chain andrespond to end customers needs

Target regions where economic growth is rapid

Key requirement: An external perspective. Are you making things better for thecustomer, or just more convenient for you?


2005, DuPont Co., ISBM & CBIM


19/66



19

Why integrate Marketing and Six Sigma? Six Sigma has high credibility and visible top-management emphasis in DuPont Shifting Six Sigma emphasis from cost reduction to Top Line Growth Voice of the Customer requirement for data analysis fuels willingness to investin marketing research Project discipline lends implementation rigor to the outcomes of the marketing efforts At first blush one would think that marketing (touchy feely stuff) and Six Sigma(statistics for nerds) are not remotely related in fact the core process used by DuPontin marketing, the Strategic Marketing Process, maps directly to Six Sigma


2005, DuPont Co., ISBM & CBIM


20/66



20

Case study: needs-based segmentation

Problem: How can we accelerate growth in auto safety? DuPont is a material supplier to many auto safety segments: frontal protection; side and rollover displays;electronics Intense competition in component material supply DuPont competitive advantage lies in great quality, broad offering, broad science/technology platform Position as a development partner varies Relationships and access to individuals with design-in clout is limited The automotive industry will continue to aggressively drive low cost at the component level where there isno technology advantage

Goal: Establish DuPont as a technology development leader by delivering innovative

system offerings at competitive cost

Strategy: Establish 4-6 growth projects that expand technological leadership capabilityand market position

Approach: Segment this huge market then identify targets for project selection Validate market segments

Test prior assumptions through direct voice-of-the-customer interactions Conduct secondary research Expand Voice of the Customer interactionsan ongoing process---to gain insights on market trends,

industry structure and offering relevance in the global automotive industry


2005, ISBM & CBIM


21/66



21

Tools: Voice of the Customer discussions

Confirmed accurate segment selection and choice of goal The automotive safety market space is evolving, growing and an area of focus A vehicles safety position is a source of competitive advantage Separate customer organizations focus on safety as a whole as well as on individual components Trends in technology Unmet needs

Perceptions about DuPonts capabilities as enablers of customer visions and strategies

Results: Met or exceeded growth targets in 2003 & 2004 The rigor of talking with people in the marketplace and continuing that dialogue made all the difference inthe world. Received DuPonts 2004 Sustainable Growth Excellence Award Drivers of growth Strategic projects with target customers who have high value for innovative system offering development Expansion of influencer support Use of integrated marketing and Six Sigma process for all major projects


2005, ISBM & CBIM


22/66



22

Case study: delivering & capturing valueProblem: How can we accelerate growth in auto safety?

DuPont Performance Coatings shares a 50/50 supply position with a competitor for a strategiccustomers business This customer is not satisfied with our current method of supplying product and service through ourexisting route-to-market partner If the current method is not improved, we could lose this customers business If the current method is improved, we could gain a greater share of this customers business

Goal: Develop a new service model that satisfies this customers needs and grows our share of their business Keep existing route-to-market partners involved in servicing this customer

Approach: Form a team involving personnel from all parties: customer, route-to-market partner, and

DuPont Performance Coatings Focus the team on the creation and testing of a new product and service supply model for this customer,using design for Six Sigma methodology (DMADV)

Tools: Kano Analysis: customer-interview research to identify critical needs

Evaluation of needs based on: fulfillment or non-fulfillment of a need, and satisfaction experience Classification into four categories: attractive, must-be, indifferent and one-dimensional (they love itor they hate it) elements of offering delivery.

Pugh Matrix approach evaluates offering concept options, rating each for its ability to improve fulfillmentof each need vs. the default offering.

Creates strong alternatives and identifies optimal concept

A disciplined, team-based process including the customer and strong route-to-market partner


2005, ISBM & CBIM


23/66



23

Reflections on results:What went well:

Forming a multi-party team Use of 6-Sigma tools helped convince the customer to keep route-to-market partners involved; thecustomer recognized the partners service capabilities. DuPont Performance Coatings won awards: Best Customer Support & Supplier of the Year Other Six Sigma projects developed as a result of this work Applying Six Sigma for the customer at the customer provided a highly visible level of commitment as a

supplier and provided objective data to help inform and influence the customer in favor of DuPont

Our Top 5 What Weve Learned5. Map your strategy to show links among key elements. Determine where the revenue and costs originate. Communicate clearly, making the hard simple. Tell each employee where they fit in.

4. Have the organization do work as projects highlighting each process step.3. Define winning in measurable terms. Establish managing processes.2. Take advantage of creativity; a disciplined process focuses creativity. Use multi-generation planning to determine what to accomplish now, what to do later.

1. Build your business on a solid foundation of external, direct, voice of the customer

insights. You need facts, not opinions. Marketing research is an investment!

Though not necessarily new, Six Sigma is not painful, but is a natural integration

with marketing and marketing leadership on real projects.


2005, ISBM & CBIM


24/66



24

Performance-Driven Marketing:Applying Six Sigma Principles to

Demand Generation

Gordon SwartzVice PresidentMarketBridge

[email protected]

2005, ISBM & CBIM

Key insights from Gordon Swartz


25/66



25

Performance-driven marketing requires tying sales and marketing investmentsto financial results Process-oriented industries are comfortable determining how inputs affect outputs Significant investment is shifting to integrated lead and relationship management

Addressing the black hole between lead generation and sales channel/sales force follow-up 72% of surveyed C-level executives think sales would grow 10% just by plugging the black hole,but 60% of them believe they dont have a process to do so

Applying Six Sigma building blocks to marketing processes, what is the same? Process focus: optimizing the conversion of market opportunity into revenue Measurement: exploiting increasing amounts of data with modeling tools and experimental designs Technology-enabled performance: improving CRM, Web tools, databases, etc. But marketerscomplain of having too much data while missing critical data.

People skills and management dependent: hiring, training and motivating in the 6 culture and what challenges make it different?

Poorly defined marketing-through-sales processes: marketing treated as art; process black holes Undisciplined measurement systems: unintegrated metrics among marketing process silos, withlittle systematic experimentation

Historical emphasis on automation technology vs. business intelligence technology. CRM capturesincreased point-in-time data, but intelligent analysis of ongoing processes lags

Required new organizational capabilities lagging Lack of screening, planning, ROI measurement Premium placed on creative and big idea skills vs. marketing science Imbalance of people vs.. program spend


2005, ISBM & CBIM


26/66



26

Case Study: Optimizing Marketing Spending Mix

With its sales force closing complex orders in the $1-10 million range, companyrecognized that each sales and marketing investment has a unique incremental yieldcurve affecting overall marketing and sales pipeline performance.

We need to know where we are on each investments yield curve. What would happen if a key competitor shifted its allocation?

Altering an allocation can change downstream yield curves.


2005, MarketBridge, ISBM & CBIM


27/66



27

Armed with a robust model, we optimized the firms $100 million+ marketing mix spend.

Shifting spending changes the relative importance of functions within the organization.Learning, cultural and institutional issues arise. The model indicates the direction of spending changes to be made incrementally,simultaneously accomplishing cultural change over time.




28/66



28

Case Study: Optimizing Marketing Process Yield

Modeling the effects of adding media to a campaign is straightforward. We get moresophisticated examining the lagging brand effects of spending.




29/66



29

Experimentation via controlled field tests reveals how media interact.




30/66



30

Multi-channel marketing & contact management optimizes tactical and end-to-end results

Gains of these magnitudes have been achieved by changes in marketing mix allocationwith no increases in overall spending. The Rule of 5s generalization: A 5% budget remix produces five times more return than

achieved by a 5% budget increase.

SAMPLEDASHBOARDMETRICS




31/66



31

The best marketing organizations use the pipeline framework to launch

Six Sigma discipline

The challenge and opportunity is in the integration of lead and relationshipmanagement tactics. The green spot provides the process control threads

linking market conditioning and sales management.



S C C f


32/66



32

In-market experimental design is a foundation of Six Sigma discipline Hypotheses: Develop hypotheses to be tested (e.g. yield, interactive effects). Design: Design tests with segments, market, offers, attributes, and media to test, controland normalize. Avoid attempting to build the intergalactic data warehouse. Organize aroundthe critical information needed. Execution: Engage market managers and campaign planners to mine databases, establishoffers, and execute tactics within execution and test construct.

Measurement: Collect and filter time-series response data Produce econometric analyses, correlations and interaction elasticities Compute optimization scenarios; simulate forecasts

Replication: Develop ongoing test model across framework Embed measurement and testing methodology within market management, offeringand execution functions.


2005, ISBM & CBIM

2005 J i t ISBM CBIM C f


33/66



33

In which decision-making phase does your company operate?





34/66



34

Six Sigma in Sales and Marketing?One Black Belts Experience

in Process Improvements3 examples

A. Charles ClarkFormer Six Sigma Black Belt, Marketing and Sales

Dow [email protected]

2005, ISBM & CBIM

Key insights from A. Charles Clark



35/66



35

Project #1 Business Practices

Parent company auditors found multiple cases of expense abuse and poor reportingwhile investigating 3 years of expense records. Excessive variation in reporting use of company funds claimed as business expenses Thousands of $'s missing and / or unaccounted for The actual extent of loss could only be estimated after interviewing the culprits

DMAIC Solution: Basic 6 tool that applies to everything we do in sales and marketing Define problem: missing funds, missing reports, missing receipts, false reports, etc. Measure: Found poor managerial systems to track the process. Analyze: What is the process, standards for inputs and outputs, process owners?

Improve: Nine months to get everyone to agree on new processes.Process outlined, agreed & mapped with accounting dept.

Process manager role added to existing positionCoordinated with Bank of Americas EAGLS system, launched company-wideStandards created for review & audit functions

Monthly reporting established with expense auditorsAwareness campaign boosts knowledge & sets expectationsCompany policy web archive establishedAuditors released for other workMargin disappearance stopped


2005, ISBM & CBIM

2005 Joint ISBM CBIM Conference


36/66



36

Control:Process manager reports to national sales managerProcess manager empowered to inspect, intervene & enforceBusiness ethics position created by Global Ethics committeeCompliance definition & tracking better coordinated: legal, accounting & sales / marketing groupsNew employees orientation changed -- better information about company expectations of fundsusage & reportingDefinitions of defects standardized - auditors & managersMonthly reports by process manager to national sales mgr.

Solution sustainability?Employees awareness GREATLY increased

Role & responsibility of management to monitor, communicate & inspect - betterProcess mgr functioning as championInternal capability to know individual practices significantly enhancedProcess ownership clearly identified.


2005, ISBM & CBIM



37/66



37

Project #2 Agency Consolidation

Multiple communications agencies employed to produce annual productcommunications for > 50 brands. Suspected redundancy of effort and cost, non-coordinated campaigns, off-strategy work,inconsistent use of trademarks, missing synergy and staff overlaps. Despite 18 years of success with the lead agency, we realized there was no process map,

standards, process owner, success metrics, or data comparability across agencies. Our lead agency asked for more business. Our Six Sigma project examined theprocesses and justified the cost savings of consolidation.

Analysis defined the process via surveys and interviews, cost analyses, and 2 Black BeltsWhat is the process? Communications developmentWhat are the inputs? Marketing plans, biz objectives, mgr. insightsWhat is the unit flowing in the process? Brand message unitWhat is the process output? Product brand messagesWhat are the standards for the output? $-effective & on-strategy

Who is the process owner? Brand manager, marketing mgr.Process manager? Agency personnel (?)Process stakeholders? Managers & leaders

An example: Tracking costs, we had to go externally to the agencies. Internally, we had simplyexamined and approved invoices. We had no systems or process mentality to track anddocument the basis on which we could make decisions.


2005, ISBM & CBIM



38/66



38

Improvements: We have to properly define the process in order to cut account managementcosts.Four major agencies terminated; others trimmed.Work definition process = marketing plansProcess map created with agency & product groupsElectronic routing & approval adoptedProcess manager designatedCost codes standardized to match process [168 to 9]Lead agency process aligned with codes & processReporting & tracking by business unitAccountability enhanced with more relevant data

Control: The agency started tagging costs according to each costs step in the communicationsprocess

Sustaining the gains by:Concentrating ALL work in -1- agency.Clarifying PROCESS phases (added DEFINE) & work output standards.Utilizing standardized Cost Elements in billing & reporting.MEASUREMENTS discipline -- a mentality & a NEW process step.Directing work via MARKETING PLANS by value scoreAchieving buy-in from the lead agency on value of changes & processesRoles & responsibility of management to monitor, communicate & inspect much improvedInternal interest in process discipline and data-driven decisions improved.Agency very cooperative and committed - more at riskProcess ownership better defined & assigned.


2005, ISBM & CBIM



39/66



39

Project #3 Sales Force Deployment

Specialized sales force is covering same territory as traditional sales team.Cost redundancy? Balanced deployment? Efficiencies lost? 4 different specialized sales forces share the same geography, the same distributoraccounts and the same retail dealers and exhibit vastly different levels of productivity:

as much as 425% variation between top and bottom full-time territories.

Solution: Analyze balance of sales force deployment, by territories, sales levels and other keyvariables, overlaps, task complexity, workload, etc.

Improve balance.Process outlined & mappedProcess operator designatedStandard definitions for data adoptedKey crops identified based on specific, agreed criteriaCrop segment managers identified & role defined

dBase administration clarified and correctedMarketing plan template refined with product manager and market research agency to include salesrep inputs AND measures of potential2 territories combined at savings of at least $300,000.


2005, ISBM & CBIM

2005 Joint ISBM CBIM Conference K i i ht f A Ch l Cl k


40/66



40

Solution sustainability?Product manager / district manager buy in!Key market researcher supports use of sales rep. data in his market assessmentsSales rep data also included in marketing planSales rep input processes unchangedOther sales specialties re-deployed people based on project analysis and outcomeGenerated interest in other sales related projects that continues even today.

Second Thoughts & Learnings

Six Sigma methodologies and philosophies fit in the world of sales and marketing becauseits not about theory; its about action. Marketers have a bias for action.If things are aligned, coordinated and linked together in the right way, human-based

marketing has a chance in this process world.Problem statements are crucial. If no problem hypothesis, no go!Process maps are invaluableProject champions are a vital imperative: a human being taking responsibilityProcess partners greatly facilitate improvementStandardization is critical in support systemsProcess ownership is the king of all solutionsSustainability is biggest worrywill managers forget, minimize or just overlook?Creativity is not necessarily compromised by disciplineDecisions without data are usually costlyCost-of-a-rep myth debunked !!

The discipline of data-based decisions is difficult !


2005, ISBM & CBIM

2005 Joint ISBM-CBIM Conference K i i ht f A Ch l Cl k


41/66



41

Suggestions

About year 4 or 5, go back and reevaluate the projects you did in year 1 and do themagain. Your outcomes will probably be a little different because you know more.

A great metric to consider: What percentage of your marketing budget is touching

the customer?

Fix the most tangible processes first paper flow; documents flow; communicationsflow; data flow; services flow, etc. These usually are interface points between procedures.

Then fix not-as-tangible processes approvals, sign-offs, collaborations, planningmanaging, creating, and cross-functional relationships. These are usually interface pointsbetween people.

Get a good grip on the whats, hows and whys of 6 Sigma. Practice in the backyardand get ready for the real deal. Then, consider how to seriously engage the customer.Those projects will be the major breakthroughs & gains! These are usually alwaysinterface points between groups.


2005, ISBM & CBIM

2005 Joint ISBM-CBIM Conference K i i ht f R dt bl P l


42/66



42

Marketing Process Improvementand Six Sigma:

Why now? When will it work? When wont it?Selected Question and Answer Highlights

Roundtable panel discussion:Fred Wiersema

The Customer Strategy GroupModerator

Valerie Mason CunninghamXerox

Jane Hrehocik ClampittDuPontJean M. OConnell

3M

2005, ISBM & CBIM

Key insights from Roundtable Panel

2005 Joint ISBM-CBIM Conference K i i ht f R dt bl P l


43/66

2005 Joint ISBM CBIM ConferenceSix Sigma and Business Marketing


43

Wiersema: A recent Bain Consulting survey found that 77% of senior executives think that

tools like Six Sigma promise far more than they deliver. What got your companies startedwith Six Sigma?

Cunningham: Timing was critical for us.We were a company in crisis and needed somediscipline for managing the business.

OConnell: Four years ago we got our first CEO from outside the company, from GeneralElectric. He brought Six Sigma with him. He told each manager to hire three Black Belts, oneeach for growth, cost management and cash management. For instance, we were weak incapital usage. Decision-makers used capital for free and were evaluated only by their P&L.

Clampitt: DuPont is science-oriented with many technical people. We had a marketing processand wanted to apply what has worked in operations to that marketing process.

[A show of audience hands finds that more than half believe their corporate culture isnot yet conducive to Six Sigma.]

Wiersema: How do we market Six Sigma in our organizations? What is the value proposition?

Cunningham: We used TQM, which addresses product quality and customer needs, but not themarketing process and helping the customer get its own processes right. When you address

those, you see improvements to make that you didnt see before.


2005, ISBM & CBIM

2005 Joint ISBM-CBIM Conference Key insights from Roundtable Panel


44/66



44

Wiersema: But we have to ask, how do you package Six Sigma? Is it for everybody? Willmarketing embrace it or is it analytics for nerds?

Clampitt: We found that everyone going through the program has been successful. We selectgreen belt candidates with leadership potential, who see that Six Sigma is a process for thinkingand solving problems, and not so much a tool in itself.

Wiersema: How do you roll out Six Sigma?

OConnell: There are as many models as you want to adopt. When you have good coaches onprojects, people cant sit and wait it out. At 3M, the average initiative went away after threeyears, but Six Sigma is not going away.

Cunningham: Six Sigma wasnt new to us. The manufacturing group always used it, savinga million dollars in inventories, and multimillions in accounts receivables. We convincedmanagement that marketing needed Six Sigma, and the top executive pushed executives tolaunch projects. Then skeptics turned into believers.

OConnell: We had executives clinging to a lot of tribal knowledge, but they changed theirattitudes about Six Sigma once they saw the results.


2005, ISBM & CBIM

2005 Joint ISBM-CBIM Conference Key insights from Roundtable Panel


45/66



45

Clampitt: People did resist Six Sigma by shooting holes in data and disagreeing with

interpretations. And leadership turf issues did stand in the way. You have to go upstairs, aroundobstacles. And, bringing the people who are obstacles into the solution works.

Cunningham: For example, we learned we werent getting results from what we thought wasa good direct marketing program. We shifted some spending to events to improve how we

build the customer experience.

OConnell: Dont be afraid to kill high-visibility projects that are not working.

Responding to Audience QuestionsQ: How do you keep Six Sigma from becoming a religion, so wrapped up in tools and tech

rather than the objectives?

OConnell: Six Sigma must be driven for business strategy. Choose projects than genuinelyfurther the business.

Cunningham: If the project doesnt improve the customer experience and advance the interestsof the business, stop it.

Wiersema: You have to determine what is the right project for your company. Then you needa leader to challenge the religious zealots and the laggards who do nothing.


2005, ISBM & CBIM

2005 Joint ISBM-CBIM Conference Key insights from Pamela Roach


46/66



46

Delivering What Customers Value

The Quest for Excellence

Pamela J. RoachCEO

Breakthrough Marketing [email protected]

2005, Breakkthrough Marketing Technology,

ISBM & CBIM

Key insights from Pamela Roach

Banquet address:



47/66

005 Jo S C Co e e ceSix Sigma and Business Marketing


47

Our Best Practices study of Six Sigma in Sales and Marketing found Black Belts need training and experience in Marketing/Sales in order to be successful

Six Sigma success in Operations doesnt necessarily translate into Marketingand Sales success Vocabulary and examples work best when specific to Marketing and Sales

Commitment from senior leadership is critical Those who are most successful see marketing as a process

Projects flow from business strategy and deliver a measurable ROI, with emphasis ontop line growth Tool usage is flexible, applied as needed. Six Sigma is a way of thinking and making decisionsbased on facts; clearly defining a problem before you try to solve it.

Our current study, the ProMetrixSM

SVBenchmarking Study, co-sponsored byISBM, will allow you to compare your marketing performance to other firms. This is a free introduction to ProMetrix

SM, a software-based diagnostic that identifies the ROI

impact of marketing and sales underperformance. The unique report will enable you to directlycompare your Marketing and Sales process capabilities to a composite of your peers. Each

participants business will be profiled with its individual statistics, including the ROI impact of itsmarketing strategy. The study addresses a sampling of critical marketing competencies: market selection; use ofcustomer data; communications effectiveness; robustness of sales process; and sales channelproductivity. Whether or not your business is Six Sigma driven, the report will highlight

opportunities for improvement.



ISBM & CBIM



48/66

Six Sigma and Business Marketing


48

A Case Study: AstorLight

A project contending in the prestigious 2000 Americas Quest for Excellence: the

best of the best Six Sigma Plus projects throughout the various Honeywell businessunits. Six Sigma competence reduces the risk of the company missing potential merger synergies. Fostering a win/win employee attitude, when Six Sigma gains traction in an organization, ittransforms from a top-down to a bottom-up commitment to continuous improvement.

Competitions like this can help create a pro-Six Sigma culture change by inspiring employees.

Our challenge: Delivering 12% annual growth in a commodity marketindustrial wax forcandlesin a market forecast for 7-10% annual growth over five years. Intensely competitive marketplace, with the wax business far upstream from the consumer. We faced tight budget constraints.

Our approach: We started by segmenting the value chain. Wide dispersion and types of retailers; each segment with its own supply chain. Where do weparticipate to capture share? Voice of the Customer attempted to identify special candle effects customers wanted.Everyone said, We want something new, but we dont know what it is. We always hear that inmarkets, but what does that mean? So we used our Green Belt training to identify the special effects needed to drive double-digit

sales growth with equal or better margins (including capturing more of the retailers margin).



ISBM & CBIM



49/66



49

Forming the team: The results we sought indicated the kinds of experts needed. We employed a critically important Six Sigma tool:FMEA, a failure its mode its effectby

analysis in a cause-effect manner. FMEA provides an early warning on problems and triggerpoints for contingency plans.

VOC led the way to high-margin commercialization: customer interviews, researching retailofferings, qualitative and focus group research on a shoestring with employees from other

Honeywell business units and their friends. The approach was bias-free. We learned that men appreciate candles and special effects, and have specific preferences Women seem to be satisfied just knowing of a candle special effect Respondents were willing to pay a premium for a pillar candle with a special effect

QFD (Quality Function Deployment) linked product concept options to customer needs andcompany inputs required

We addressed risk affecting our brand and partners We tested sensitizing consumers to our ingredient brand with a radio personality endorsementand an Internet campaign to the cottage industry making high-end candles.

Both approaches worked. Customers linked quality candles to quality ingredients. The success of a differentiated value proposition in a product category thousands of years oldshows that in any market, theres always an opportunity for technology and differentiation. The retailer will never tell you that there are customers willing to pay more. But when you knowthere are, you can charge the retailer more and capture more cash from the retailer.



ISBM & CBIM



50/66



50

We created whats continued to be the most profitable line of candle wax in the business Six Sigma lead the way in a market-driven approach requiring new data, new insights, and

new behaviors. We beat time and dollar targets.

21% revenue growth in six months; 13% revenue growth in 9 months from new products. Reduced cycle time for new product commercialization Freed 5% additional capacity for less than $5K

Segment gross margins increased more than 30% over time. Lower-cost, long-term supply contracts were negotiated.



ISBM & CBIM

2005 Joint ISBM-CBIM Conference Key insights from Kevin Clancy


51/66



51

Six Sigma Dreams

Half Sigma Realities

Kevin J. ClancyChairman & CEOCopernicus Marketing Consulting

[email protected]

2005, ISBM & CBIM

Key insights from Kevin Clancy

Keynote address:



52/66



52

The buzz today is all about Six Sigma marketing, but few companies are really doing it.Only 14% of companies on the Fortune 1000 list are growing faster than the GNP.

We found that in 39 of 48 B2B and B2C categories, brand equity is declining. Far more brands

are sliding toward commoditization than commodities are transforming into brands.


2005, Copernicus Marketing Consulting,

ISBM & CBIM



53/66



53

5 Best Practices to turn 6 Sigma Dreams Into Reality

1. Find a market thats at least 3 sigma above average in terms of potential profitability. If you nail targeting and positioning, everything else will fall into place. Philip Kotler Problems with the two most popular B2B targets.

SIC code/industry specialization is too narrow, too heterogeneous a segment. Heavy users are price sensitive and deal prone, and are often in the bottom decile of profitability.

The intuitive, half-sigma approach is to make a decision in about 5 minutes.

The counterintuitive, Six Sigma approach is to analyze 50-250,000 different targets to identifythe ones forecast to be most profitable.



ISBM & CBIM

2005 Joint ISBM-CBIM ConferenceSi Si d B i M k ti



54/66



54

Proxies for Profitability enable being approximately right rather than precisely wrong. Examples:

Spending in the categoryCurrent spending on your brandProblems which if solved would lead the customer to switchPrice insensitivityResponsiveness to your brandCost to deliver and serveOpinion leadership/personal influenceInterest in new products and servicesCost to reach and impact with sales force and marketing communications

Examine many different segment plans on the basis of profitability



ISBM & CBIM




55/66



55

2. Accept nothing less than a breakthrough positioning, one at least 3 sigma above average. 1, 2, or 3 words, phrases or sentences about your brand that you want to imprint in the heads of

key stakeholders; so clear, succinct, and powerful that once launched, it leads to a powerful brand. In most companies, if products, services and brands are positioned at all, it appears to be in theminds of marketing managers and not customers and prospects. Our study of more than 400 consumer TV and print ads found only about 7% communicate araison dtre.

The best practice, counterintuitive approach to positioning begins with a clear understanding ofprime targets needs, problems, and pains (i.e., motivations). WARNING! Need-state analysis (customers rate benefits and attributes)---the all-time mostpopular quantitative research for uncovering needs, problems and motivations---can be dangerous. Marketing is not the discipline of giving people what they think is important. Its the discipline of

solving customer problems.Needs should not be mistaken for problems and marketing is about solving problems.People will say that something is unimportant if they dont know anything about it.People hesitate to say anything that makes them seem superficial.People do not want to admit that they are prices sensitive and in a company driven by price.

Our new model of buyer behavior weighs benefits and attributes on three motivational dimensions.Dream detection: the self-reported idealProblem detection: discrepancies between what they want and what they getPreference detection: the attributes/benefits that predict an individual buyers preference

We rank attributes by motivating power, cross-referenced to our brands superiority, parity, orinferiority to a key competitor(next slide), which indicates the most potent attributes for competitively

superior positioning.

y g y


ISBM & CBIM




56/66



56

y g y


ISBM & CBIM




57/66



57

3. Develop a Three Sigma+ marketing communications strategy. Marketers today have lost confidence in traditional media, especially 30-second TV spots, and

are shifting investments to alternative vehicles such as sports, events, interactive kiosks, theInternet and other non-traditional media. But that wont get you to Six Sigma if you dont fix what caused the poor performance in thefirst place: weak targeting, positioning and media strategy. A Three Sigma marketing strategy creates more product awareness for less media spending.

4. Use marketing science tools to develop better marketing plans. Most companies develop marketing plans without any real knowledge of the relationshipbetween marketing inputs and outputs.

Managements set objectives only remotely related to strategy.

Tactical plans derive from prior years failed plan, with a relationship to objectives weak at best. The counterintuitive, best practice approach involves innovative model-based plans withempirical underpinnings, thereby integrating objectives, strategies and tactics.

5. Obsessively and compulsively implement your marketing plan.

Three studies report that most marketing plans and strategies are not implemented The more people implementing the plan and the more creative they think they are, the morethey will change the implementation plan. Drag managers out of their separate fiefdoms to focus on implementing the strategy. Audit implementation to ensure conformity to strategy and plans.

y g y


ISBM & CBIM


Key insights from Jean M. OConnell


58/66



58

Business Marketing at 3MUsing Six Sigma:

The Customer Project Approach

Jean M. OConnellDirector, Six Sigma Operations

3M [email protected]

2005, ISBM & CBIM

y g




59/66



59

At 3M, a solutions company that happens to make products, Six Sigma is the driverbehind all other corporate initiatives.

Six Sigma is Initiative

Strong linkage to business goals and customer needsLeadership development at coreBreakthrough improvement

Strong linkage to business goals and customer needs.Management reviewsSustaining gainsProcess and Financial results($$)

Methods and tools

Process thinkingDMAIC (Define, Measure, Analyze, Improve, Control)DFSS (Design for Six Sigma)Understand and reduce process variation and product variabilityData Based Decision MakingNew Product Introduction (DFSS) - reduces variability & gives customers what they want

Weve done more than 400 Six Sigma projects with customers to date. Projects must be about the customers critical Ysthe customers pain point Focus on improving customer processes and 3M/customer shared processes Joint 3M/customer team membership and project ownership; project champions on both sides

We do not put a Black Belt on a customer project until the person has done 2 internal projects. 2005, 3M, ISBM & CBIM




60/66



60

The Roadmap

2005, 3M, ISBM & CBIM




61/66



61

3Ms Ys Customers Ys

Mutual

Ys What is a Customer Project? Improves a specific customersprocesses or products Can improve 3Ms processes Involves customers as active project

team members Is owned by the customers: metrics,control plan, etc.

A good project Identifies a problem to be solved: A project is a problem scheduled for solution J.M. Juran Has a Process Owner Problem is of major importance to the organization; even better if of major importance to both organizations

Clearly connected to business priorities Clear quantitative measures of success

Baseline, goals and entitlement well-defined (data). But at the start, dont let a lack of data stop you.Youre forced to develop metrics.

Reasonable scope Able to Complete in 4-6 monthsProject support often decreases after 6 monthsDont want to boil the ocean





62/66



62

Key Success Factors

Organizational integration Joint Executive Commitment (Customer and 3M) Joint Resource Commitment (Customer and 3M) Customers on the TeamCustomer-owned metrics Critical Customer Need and/or Pain Customer Owns Metrics & Control PlanFlawless execution 3M Knowledgeable Experts Customer Training

Clear Expectations Deliver on Promises Operational Excellence

Key Learnings

Data determine the price/value of solutions

Building executive-level contacts is key Enhances customer intimacy: first-hand voice-of-customer and customer business direction/strategy

Allows for leveraging of all 3M technologies Co-location solidifies partnership Advantage in speaking common language withour customer

Six Sigma relies on creativity as well as fact, and it is relevant to product andmerchandising ... It starts out by recognizing that assumptions are a very dangerous

thing in a competitive world One of the most important things we can do is get in there

and figure out whats truth and what is myth.

Michelle Moorehead, VP of Strategy and Performance Improvement for Target Corp.



Key insights from Patrick LaPointe


63/66



63

Six Sigma or Not:Building Better, More Effective, More

Accountable Marketing in Todays ComplexB-to-B Organizations

Patrick LaPointeManaging Partner

[email protected]

2005, ISBM & CBIM




64/66



64

Marketing success depends on achain of factors that build credibility

in the organization for the art andscience of marketing.

But the real heavy lifting occurs at the start of the chain. When Six Sigma initiatives enterin the middle of the chain, they struggle, missing the context, the broad-based under-standing and the culture of the process.

Six Sigma has some formidable marketing enemies: Foot dragging, information hoarding,

micro-scoping, resentment and passive-aggressive behavior. It all stems from fear of theunknown, of the known, and of the facts. Marketers, though adept at persuasion, fear thatthat numbers people will expose their limitations. That is fundamentally the psychology ofwhy Six Sigma has not penetrated marketing so far.

To address the enemies, we must look at the role of marketing in the organization. But in most organizations, marketings role is poorly defined strategically and tactically. Marketing is not like the rest of the organization, leading to conflicting views over objectives. A 2002 Study by Hewitt Associates found that Marketing is a key participant in over 2/3 ofinter-departmental conflicts within Fortune 500 companies.

Marketing effectiveness is a cultural/organizational problem, NOT an analytical one. 2005, MarketingNPV, ISBM & CBIM




65/66



65

A critical challenge: overcoming 6 primary obstacles to marketing measurement. Data Problems

Collecting the wrong data focus on what is easier to get Applying rocket-science analysis to it

Speed > Accuracy > Relevance Face-to-face begat telephone begat mail begat web/email

IT Becoming Too Central

Enthusiasts monopolize the agenda If its on the computer, it must be true

Researchers/Analysts are poorly paid with little/no career path Training in measurement is rare, yet skill shortages are a commonly cited obstacle Delegation

Selecting metrics is big picture, politically-charged; interpretation even more so When measurement strategy is delegated, truth and insight lose emphasis Measurement requires leadership

A Marketing Dashboard helps to address those obstacles

Establish causal links between spend and profits

Create a learning organization that makes decisions on hard facts supplemented with

experiential intuition rather than lots of intuition punctuated by a few facts Establish clear roles and responsibilities, creating job satisfaction and a culture of performanceand success Elevate marketing accountability to earn the trust and confidence of the CEO, the CFO, andothers throughout the company

2005, MarketingNPV, ISBM & CBIM




66/66


6 Common Six Sigma Mis-steps in Marketing Launching outside of Marketing first, then ascending like locusts Black Belts looking for projects instead of champions Working projects without the context of the objectives marketing wants to achieve Setting goals for training versus implementation Overt self-preservationism as marketers resist the interloping Black Belts.

4 Keys to Success for Black Belts Importing Six Sigma into Marketing1. Learn the language of marketing2. Start on common ground, areas marketing wants to discuss such as voice-of-the-customerand process mapping when presented in terms of marketings objectives.3. Embrace variability, because marketing does not have the predictability of manufacturing

and operations.4. Work the problem, not the symptoms.

Date post:	06-Apr-2018
Category:	Documents
Upload:	hend-nabil
View:	219 times
Download:	0 times

Six Sigma and Business Marketing

Documents