Q 242. While Operations as a function is commonly targeted with the concepts and tools of Lean, Six Sigma, Theory of Constraints etc., what are the areas in Sales and Marketing that are highly likely to benefit from Business Excellence approaches? 

 

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In my opinion all activities in sales and marketing, are itself small process, hence six sigma is applicable at stage of sales and marketing 
 

1.Presales - identification of potential customer 

            ..        custering / segmentation 

              ..       prediction of who will buy and who will not ....maltivariate analysis, Multiple logistic regression 

2. Response to time query by potential customers 

3. Prediction of customer will reorder or not

4. Identification of customers needs and wants 

      DOE/ KANO modeling 

5. Lean concept _ minimum documents ftom customer ...autimation _ JIO case _ two step verification using Addhar

6. Lead time predection after order from customer 

7. MSA of sales engineer..quotation given by engineer/ manager

8.  Response time after sales calls from customer 

9. Error reduction in filling order from

10. Days to invoice after delivery 

 

• Just in time delivery 
• Early identification and solving disputes 
• Innovative products or services as per demand 
• Customer centric and fully satisfied service 
• Happy internal and external customers 
• Accuracy and efficiency
• Removal of idle time in process  or 8 wastes in manufacturing 
• Fully trained internal customer with effective change management system 
• Multiple short time mission with one Goal as long time Vision
• Contribution as per customer satisfaction by employer
• Contribution as per employer satisfaction by employees 
• Developing unique service or product by benchmarking existing industrial standard with effective credit validating and control system. 
• Insurance on Possible potential Bad debts. 
• Customer is GOD approach. 

 

First, We need to understand the term “Business Excellence” and Elements of Sales and marketing, before we start to find the areas in sales and marketing which can be benefitted from business excellence.

What is business Excellence model?

Business Excellence is a set of Core values, Sometimes it is called as World Class Best Practices for managing organization and hitting the Organizational Goals.

These best practices evolved into a Business model for “how to run a world class organization”. This Business model is developed and evolved with thorough Study of the world class Organization’s best managerial practices and core values.

Many Big Companies have developed their own model of Business Excellence and use as a benchmark to assess the Organization’s Performance and recognize through award programs. There was a decline in awards applications in 1990s.

There has been an upward trend for organizations to follow these models and integrate the business goals with the best practices in their daily Operations. And achieving the benefits what Business Excellence model brings.

Business Excellence models are frameworks which when applied within an organization can help us to focus on new ideas and actions in a systematic way that will lead to an accelerated growth. These business models are internationally accepted for both providing a framework for implementing the world’s best Practices and an effective measurement of how this model is implemented.

Few examples of Business Excellence models accepted worldwide are given below:

·       Baldrige (MBNQA)

·       European Foundation for Quality Management(EFQM)

·       Singapore Quality Award Model

·       Japan Quality Award Model

·       Canadian Business Excellence Model

·       Australian Business Excellence Framework(ABEF)

Malcolm Baldrige is the most popular model in the western countries and is launched by U.S. Government and commonly known as Malcolm Baldrige Award Model

This model is incorporated of 6 pillars with one result category.

1.    Leadership

2.    Strategic Planning

3.    Customer and Market Focus

4.    Measurement, Analysis and knowledge Management

5.    Manpower focus

6.    Process management

7.    Business Results

The values of Baldrige Model includes

·       Visionary leadership

·       Customer driven excellence

·       Organizational and personal learning

·       Valuing and Employees and partners

·       Agility

·       Focus on the future

·       Managing for Innovation

·       Management by fact

·       Social responsibility

·       Focus on Results and generating value

·       Systems Perspective

 

European foundation for Quality Management Model is also consists of six process elements and one result category

1.    Leadership

2.    Policy and Strategy

3.    People

4.    Partnerships and resources

5.    Processes

6.    Customer results

7.    People Results

8.    Society Results

9.    Key Performance Results

The Fundamentals of all business excellence models are more or less in common and includes

Ø Results Orientation

Ø Customer Focus

Ø Leadership and constancy of purpose

Ø Management by processes and facts

Ø People development and involvement

Ø Continuous learning, innovation and improvement

Ø Partnership development

Ø Public responsibility

In General, for most of the organizations, the awards are secondary in importance to the concept of business excellence, which will ultimately lead to the national economic growth.

Now we can discuss areas where business excellence model can be applied to the goals of sales and marketing. Knowingly that other operational areas are commonly targeted by six sigma, lean, Theory of constraints, etc.

Areas of Sales and Marketing are as

1-      Identifying the Right opportunities-understanding “skate where the puck is going” is that organizations must focus on the opportunities coming next year and year after year. Best example of this is Google which identified the future opportunities in digital marketing and advertising and today they are monitoring 140million real time businesses and generating revenue.

2-   Pair the right opportunity with right people- To Match the right people with right opportunities, three things organizations must consider 

a.    Go-to-market architecture-finding the routes of market

b.    Sales Planning process-allocate people to those routes

c.    Skill Assessment-ensure people are equipped to win the deals

Perfect example of getting the right skills in the right people at the right time is an insurance call center. They identified that there is 3times difference between the lowest and highest performing sales-things like call cancellation handling. Then they use this information to build sales capability and employee hiring process. Which in return increased the sales by almost 30%

3-   Deliver the Perfect customer pitch- Once you have identified the right opportunity and placed the right people in right places with right skills at right time, then you must deliver the perfect customer pitch. You should apply the collected information and shouldn’t leave the chance.

This can be done in 2 ways:

a.    Segment  the customer base so that you can trace the different needs of different segments

b.    Equip the sales force with listening skills so they can match the customer to value proposition.

c.    Provide the sales force with predictive analytics, next product to buy to understand what to pitch especially in companies that have complex portfolios.

Then marketing and sales teams should become the best friends. Marketing is supposed to help the sales force by either getting the right collateral at the proposal stage or lead generation and demand generation. But matching the marketing investment to the right spots in the sales funnel is critical.

4-Do the above three consistently-If the sales force dispersed across geographies, product lines and routes to market. Same time organization wants to drive sales excellence, especially in large and complex companies, you have a degree of centrally driven initiatives and change. The companies those are good at this, invest in sales force building a set of sales capabilities and then allow them to drive the different elements of sales excellence.

Even the research shows that the best performing companies invest heavily in sales Operations.

5-Building the right operating model-In order to drive sales excellence in a company those are operating globally need to be able to get in front of the right opportunities at the right time, with the right people, deliver the right pitch, and be able to execute the sales operations so that the organization is consistent and effective.

 

 Business Excellence is not just a slogan or a matter of opinion. It is a fact that businesses that achieve Business excellence produce the most consistent growth that profit performance in the long run.

Lean and Six Sigma in Sales and Marketing:

Sales and Marketing are indeed the areas of revenue generation. So there must be utmost efficiency in these processes. Lean Six Sigma in sales projects  can increase profitability by standardizing and improving sales and marketing activities. Most implementations require use of a combination of key tools such as – data collection plans, fishbone diagrams, Pareto charts, 5 whys, and a few others –which can be flexibly adapted in sales environment. Based on best practices of many of the famous organizations, Lean Six Sigma (LSS)  has applications in following domains of sales and marketing- 

-Lead generation

-Sales proposal process

-Forecasting of sales

-Launch of new products

-Sales force efficiency and effectiveness

-Voice of the customer(VOC)

 

The first four categories of  projects together are assigned as category 1 projects. All of these processes have in common - supportive of the core sales activity, improve the internal processes and activities, the data and metrics of process performance are easy to collect and the processes are  fairly repeatable. Increased number of lead generation, periodic forecasting of sales, increasing the proposal of sales to customer and launch of new products, all can significantly impact the sales process.

 

The category 2 projects include “sales force efficiency and effectiveness” and “voice of the customer”. They are tougher in -identifying consistent processes, collection of  reliable quantitative data, root causes delineation, generating and implementing solutions. They directly impact the sales force and have an impact on sales and revenue.

Efficiency and Effectiveness of Sales force:

Industries such as pharmaceuticals, medical devices, hospital products, financial services, Information technology, have selling forces which call on many customers and have significant variation in the performance output of individual sale representatives. Six sigma tools can be applied to reduce much of the process variation and improve the overall efficacy of sales effectiveness. Six sigma tools such as Ishikawa, 5 whys can identify the root causes of variation in performance of sales of different representatives and across different territories. Important factors of variation can include-selling behavior, skills, job experience of representatives. The best practices and selling tactics can be traced and replicated  to entire sales force, by imparting training by sales manager and experts, discussing and awarding the  best sale achievers.

Voice of the Customer Projects

Voice of the customer (VOC) projects are more apt for the  industries, having  concentrated market and customer segment- like aerospace, automotive and household appliances and  most have a highly active  and relatively smaller sales force.

VOC projects targeted on improving customer share, first by identifying the basic requirements of a product or process, by conducting various customer-based surveys regarding their expectations. Apart from basic requirements  of customer, these projects also identify various customer delights (add on features apart from basic requirements), which can lead to significant  competitive advantage and huge jump in company’s revenue. Identification of root causes of drop in sales, through surveys, coupled with finding new opportunities(customer delights) and implementing them, can have a huge positive impact in revenue growth.

  

Theory of Constraints (ToC):

Theory of Constraints (ToC) is a management theory, based on assumption that every output is limited by constraining processes. So resolving these constraints, can significantly improve the output. TOC is always been a continuous process. Identification of weakest link, fixing it up, again identifying the next weakest link in sales management and  so on.  TOC also includes hiring of new resources and supplementing the stretched-out resources of the organization,  so that all the components  of sales management work in full capacity.

Sales teams  usually  work with a number of constraints – the number of sales representatives, average number of clients to handle, leads generated by marketing etc. So enriching each of these constraints can significantly increase the output. Each of these enriching activities have to be coordinated with others for significant gains.

Identify the Weakest Link:

 The weakest link has to be identified, which is derailing all other processes. The weakest link can be in inbound sales team or in outreach team.  By working on weakest link and resolving it, many of the constraints get resolved. 

Outsourcing:

 Outsourcing the hindering processes, that are retarding the full functionality of the sales team. The outsourced agencies can generate leads, sales list, transform other sales  related processes. 

Sandboxing New Resources:

Addition of new resources  to fix the constraints is a desirable option. But checking the quality of the output of these  external agencies is very important. Sandboxing is a software management strategy of   creating an isolated testing mechanism of running programs, executing files, without affecting the system or platform in which they are operating. 

Assimilation

After the external agency is tested in its quality, sandboxes are removed and they are assimilated in the existing sales process.

 Outsourcing may not be a sustainable solution for the constraints. It is always more prudent to hire new resources, which  can be integrated as part of the internal resources and complement the existing resources.

 

Combining the TOC and  Lean Six Sigma:

An integrated approach to process improvement can be:

1. Define the problem and the business case
2. Measure the current state in terms of data and metrics
3. Analyze: Use  a number of root cause analysis tools-like Fishbone, 5 whys, paretos, FMEA.  A current reality tree to be constituted, explaining the interlink of the constraints. State the assumptions and evaluate them.
4. Improve  performance by : a) constraint exploitation b) system  subordinating to the constraint and c)  Constraint elevation to break it. Lean and Six sigma tools to statistically validate the improvement
5. Follow up, sustain and control the improved performance.

 

 

 

 

 

 

 

In the answer above this response and below, everyone has contributed with valid ideas.

While Shashikant has started very well, he seems to have meandered a bit. Ajay Sharma has provided a broader outlook of Business Excellence models and has referred more to sales and a bit less to marketing. Kiran Shinde has been to the point and has talked about various example projects in Sales as well as marketing. Lurthu has provided relevant points some of which are approaches and some are examples. 

 

Kiran Shinde is the winner for this question as he has been to the point and has covered a variety of applications. 

 

If we refer to the 4 P's of marketing, they are Product, Place, Price, Promotion. With advent of automation in each of these domains, the opportunities for data driven decision making have multiplied in recent times. 

Product -

• Product Management includes new product development which is largely driven by marketing. The entire field of DFSS is suitable for new product development. The scope of APQP (Advance Product Quality Planning) includes all stages of a product life cycle. 
• New product decisions - Which products to launch and promote in specific geographies makes use of Analytics and Researches of various kinds. 
• Product mix decisions - Many companies struggle with product mix decisions and modelling methods help in this area. 

Price 

• Pricing and changes in pricing driven by hypothesis tests. Profitability analytics have a huge scope to bring improved business results. 

Promotions 

• Advertising - More than other domains, the field of digital marketing is a huge potential area for analysis and decision making with Lean Six Sigma methods as well as analytic based approaches.  This includes areas like Google Ads, and Social media ads among others. 
• Personal Selling assisted by chats and chatbots is another booming area for LSS professionals. 
• Social Media Engagement - Sometines engagement works better than direct selling and this is being heavy utilized in social media which uses analytics to a large extent. 
• Public Relations - Decisions on use of celebrities, media posts and PR methods is driven by results that they derive. 

Place 

• Regions to serve and areas to be present. This is a strategic decision area which is supported by data analytics. 
• Efficiency of intermediaries in marketing sales channels is being analyzed. Wholesalers, retailers, commission agents etc both in brick and mortar world and in digital world increase reach and have huge areas of application. 

 

In the field of Sales Management, the entire sales funnel and sales pipelines are suitable for LSS applications. This includes the sequences and conversions in Suspects - Prospects - Leads - Proposals -leading to Business Accounts.