Applying Six Sigma to Marketing
Marketing professionals want to avoid suppressing creativity with tools and structure. Process-centric work may at first seem slow, routine, and burdensome. Moreover, marketing may think statistical analysis can dampen spontaneity and innovation. But our experience suggests that the opposite is true. The Six Sigma model described in this book plans for innovation and creativity to occur. If implemented correctly, a proven methodology averts rework (caused by mistakes), ensures completeness, and reinforces quality standards. A well-constructed method that requires improvement should plan for innovation and identify the appropriate participants. Moreover, Six Sigma can help tackle the new, the unique, and the difficult.
Few dispute the value of measurement. However, that which is easily measured rarely produces real or optimal value. Real value comes from measuring what others cannot or will not measure. This brings to mind a lesson from history. In 1726, Benjamin Franklin wondered if that warm swath of water he noticed crossing the North Atlantic had anything to do with the longer times it took to sail from England to the U.S. Franklin's cousin, Tim Folger, a whaler, knew that sailing around the current as if it were a mountain was much faster than sailing directly through the current to Philadelphia. In 1769, Franklin sold charts in London on "how to avoid the Gulph [sic] Stream" that cut westbound travel time up to 50%. To this day, Folger's map is surprisingly accurate. These measures gave Folger's whaling business a competitive advantage and higher revenue margins.
The benefit of integrating Six Sigma into your marketing processes includes better information (management by fact) to make better decisions. Using the more robust approach reduces the uncertainty inherent in marketinga creative, dynamic discipline. Go-to-market processes with Six Sigma embedded in them can better sustain growth. One way to maintain growth over time is to focus on "leading" indicators of your desired goal. Leading indicators are factors that precede the occurrence of a desired result. Let's say you are concerned about dealing with a weight-induced disease such as a heart attack or diabetes. You could be reactive by regularly getting on the scale to see how much you weigh. Or you could be proactive by monitoring your caloric intake and burn rate. The latter approach of watching what you eat and how much energy you expend during exercise is harder than simply getting on the scale. The latter approach monitors "leading" indicatorscritical activities that occur before weight gain. The "lagging" indicator takes a snapshot after the occurrence of an event. Lagging indicators force you into a reactive response if the results fail to meet the target. The act of losing weight may be more difficult than measuring the leading indicators of caloric intake and burn rate. The advice of "pay me now or pay me later" comes to mind.
Business lagging indicators involve measuring defects, failures, and time. Lagging indicators can include functional performance measures such as Unit Manufacturing Cost (UMC), quality measures such as Defects Per Million Opportunities (DPMO), and time-based measures of reliability such as Mean Time Between Failures (MTBF). Lagging indicators for marketing include market share and revenuecommon performance metrics. A powerful leading indicator is customer satisfaction before a sales transaction (such as satisfaction with an information meeting or advertising piece). Another leading indicator may be the distribution channel's satisfaction with a product (or samples), whereby the salespeople want to use it themselves. Leading indicators help you anticipate whether you will hit the target. Since leading indicators occur before the desired result, you can be proactive in "correcting" poor performance. Armed with this knowledge, marketing can examine initiatives from a different perspective. To drive and sustain growth, performance and quality metrics need to be proactive rather than reactive. (Examples of continuous data include cycle time, profit, mass, and rank [customer satisfaction scores on a scale of 1 to 10]. Continuous variables are more informative and describe a process better than discrete or attribute data. Examples of discrete or attribute data include binary [yes/no, pass/fail] and counts [the number of defects].) Leading-indicator data, when established as a continuous variable, requires far fewer data samples to draw conclusions and make a decision as opposed to discrete-failure data.
Recall that a marketing methodology should facilitate the customer-product-financial linkages. This requirement seeks a comprehensive scope of marketing's responsibilities from offering inception, through offering development, to the customer experience. This comprehensive scope encompasses a business's strategic, tactical, and operational aspects. Marketing's role in each of these three business areas can be defined by the work it performs in each. This work can be characterized by a process unique to each. These three processes define how marketing's work links the strategic, tactical, and operational areas in a closed-loop fashion, as shown in Figure 1.3 .
Continue reading here: Unique Six Sigma Marketing Methods
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