Six Sigma for Marketing

I've been watching a new blog by a senior marketer at Dell, Sam Decker. He posts a lot about marketing, ebusiness, management, and life, and I feel like linking to nearly every post.

The other day, he and I had a conversation about using the principles of Six Sigma in marketing, and I had to agree with almost everything he said. I was pretty impressed with this quick overview of Six Sigma:

I think 80% of Six Sigma/BPI value in marketing is simply understanding what you do in marketing, and executing continuous improvement of those processes with measured results.

Here are four principles to apply Six Sigma, or business process improvement, to the marketing organization:

1. First, realize there are three sources of revenue for your company: a. Adding new customers b. Getting existing customers buying more. c. Getting existing customers buying more frequently

2. Identify the processes you do within your company to effect each of the above sources of revenue. Keep an eye out... every day employees make a choice to start a new process vs. improve an existing one.

3. Break down these processes into steps. (See Workback Waterfall). Identify the variables that effect the quality (output) of each step. In marketing, sometime quality is a subjective thing…but if you’re measuring your marketing results for each step and the end result (ex: response rate), than quality can be quantified.

4. Now, choose a problem or process to improve and go at it using the DMAICR framework. “Define” and “Measure” the problem or process, “Analyze” why it’s performing poorly, “Improve” it based on your analysis, and “Control” the process to sustain results.

There's lots written about the DMAIC process (you can find the basics at iSixSigma.com), but the basics are pretty simple. The most complicated part is actually stepping back to do the "Defining" and "Measuring", rather than launching into the "Improving" right away. A lot of marketers, especially action-oriented types, will quickly come up with ideas to solve a problem, then jump right into implementhing the ideas without measurement, analysis, or strategic thought. In some cases that can be good, but in a lot of cases, it can lead to disaster.

I find the principles of Six Sigma to be most effective in solving problems that at first glance seem overwhelming. And in almost every case I've seen, the problem isn't exactly what everyone thought it was--it was something different. For example, it's easy to blame a tool when it doesn't give you what you need. Sometimes the problem is that we've designed a process that relies on too many "touches", or that those responsible for posting assets don't get them from vendors on time, or we've put steps in place that are no longer needed.

I think the thing Six Sigma is best at is getting to the root of the problem, finding something that could be improved, and building a fix that can be specifically measured. The downside is that it's often a bit counter-intuitive (especially to marketers) to spend so much energy finding and fixing something so specific in such a detailed way. But the results are often breathtaking. Therein lies the beauty.

Comments

[Anne Stanton]

It is true that Six Sigma techniques definitely need to start pentrating more and more niches within the business world. I am a big advocate of not reinventing the wheel and basically love the idea of plans and already well tested systems.

Anne Stanton
President
The Norwich Group

[paul]

Sales, Sales, Sales. Selling low priced PC’s with third class motherboards and memory is NOT Marketing.
Dell has never developed a “Product”, they just undercut your local System Builder on price and quality.

[Dari]

There was a great article "Getting Close to the Customer: Quantitative vs. Qualitative Approaches " on this subject at http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&ID=971