2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing

The 11th Annual Joint ISBM-CBIM Conference

Six Sigma and Business Marketing
February 16 - 17, 2005 Atlanta, GA
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 Its Applications to Business Marketing” • Jane Hrehocik Clampitt, DuPont Consulting Solutions, ”Applying Six Sigma to Marketing at DuPont” • Gordon Schwartz, MarketBridge, “Performance- Driven Marketing: Applying Six Sigma Principles to Demand Generation” • A. Charles Clark, Dow Chemical, “Six Sigma in Sales & Marketing? One Black Belt’s Experience in Process Improvements”
(list continued)

Institute for the Study of Business Markets Center for Business and Industrial Marketing

© 2005, ISBM & CBIM

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2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing

Presentations summarized (continued):
• Roundtable Panel Discussion, “Marketing Process Improvement and Six Sigma: Why now? When will it work? When won’t 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 Sigma Realities” • Jean M. O’Connell, 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 today’s complex B-to-B Organizations”

Institute for the Study of Business Markets Center for Business and Industrial Marketing

© 2005, ISBM & CBIM

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2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing

Key insights from Valerie Mason Cunningham

Keynote address:

Xerox Lean Six Sigma Marketing:
Strategic and Tactical Impact Valerie Mason Cunningham
Vice President Xerox Corporate Marketing Services
valerie.mason@xerox.com

Institute for the Study of Business Markets Center for Business and Industrial Marketing

© 2005, ISBM & CBIM

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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 6σ 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. to … reduce cycle times and inventory … drive out cost … reduce time to market • Back Office. which we’d already gone through. 520 active 6σ Black Belts and 1. More than 2. • Applied across the enterprise. to … reduce process errors … eliminate process steps … drive down cost • External Clients. with: • Manufacturing & Design.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Valerie Mason Cunningham Lean Six Sigma: our tool to put Xerox back on track after our 2000/2001 crisis. ISBM & CBIM 4 .763 active Green Belts in residence. including 140 customer-facing projects. 17.000 senior executives completing leadership workshops Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. • More robust than Total Quality Management.538 Yellow Belts trained online.

2. 92% delivery efficiency.com Second project: marketing effectiveness dashboard • Deliver web-based. Global Accounts and Marketing Improve 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. ISBM & CBIM 5 . newsletter posted on xerox. concise marketing performance metrics • Opening screen (next slide) features click-through boxes to drill down to data (sample in the following slide) in three core buckets: • marketing effectiveness • branding • customers and the market Next project: reduce collateral development cycle time • Weak up-front planning causes expensive revisions. • Success will be measured by an overall collateral production spend of 10%. “Lean Six Sigma marketing clearly is a journey without end” Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. competition • Analyze VOC data • Improve via email newsletter process owner and a new database •Control: e. greater agency spend.734 emails sent 2/5/04.g. lost product manager productivity and a longer creative cycle.” • 50 million-plus customer touch points of all types annually First project in my group.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Valerie Mason Cunningham Lean Six Sigma and Marketing: “It’s all about the customer experience” • “Just improving customer satisfaction and loyalty is a rear view mirror look.

2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Valerie Mason Cunningham Corporate Marketing Dashboard Key Metrics Marketing Effectiveness Leads Inquiries Campaigns with Financial ROI Campaigns with NonFinancial Metrics Branding Unaided/Aided Awareness (First/All Mentions) Public Relations Awareness Consideration Predisposition Contested Win Rate Waterfall Uncontested Win Rate MDM Share Office Printers Office Copiers/MFD’s Production Installs Web Metrics Performance vs. Xerox Corp.. ISBM & CBIM 6 . HP Page Volume Customer Wins Customer Experience – Satisfaction & Loyalty Customers & the Market Net Adds Market Share Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.

OVERALL PROGRAM ASSESSMENT: © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Valerie Mason Cunningham Whoosh Phaser 7300 – Wave 3 Program Target Program Results PROGRAM DETAILS Program Investment Cost ($) Number of Targeted Contacts FINANCIAL METRICS Number of Leads Generated Lead-to-Contact Rate (%) Cost-per-lead ($) Number of Sales Generated* Close Rate Cost-per-sale (%) Revenue Generated ($) 1.000 Status R/Y/G Program Name Report Date & Purpose: Program Manager Program Date / Duration Measurement Period Program Type EMC Member Phaser 7300 "WHOOSH" DM Wave 3 1-14-05 Final Results Bonnie Gail Mailed October 8 .46% $22. ISBM & CBIM 7 .0% $586 $150.000 150..1% $47 247 8.452 10. 2004 Oct . **Assumes mixture of color and mono printer sales. Institute for the Study of Business Markets Center for Business and Industrial Marketing NOTES *10% close rate.40 16.093 2.340 0.696 4.000 150.Dec 04 Print Direct Mail Office (printers) Net Profit Generated ($)** Return on Investment (%) NON-FINANCIAL PROGRAM METRICS Number of Total Responses Response Rate Cost / response $307.399 3.12.235 205% $709. Xerox Corp. 80% incremental assumed.000 $145.9% $112 107 8.163 489% 6.0% $1.97% $8.81 Third wave of direct mail lead generation campaign featuring the Phaser 7300 printer.

ISBM & CBIM 8 Institute for the Study of Business Markets Center for Business and Industrial Marketing .2 million/year Maintained/Improved customer satisfaction across 5 key metrics: – Overall customer satisfaction – Knowledge of staff – Professionalism – Technical ability – Fix time © 2005. Xerox Corp.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Case Study Solution Solution • • • Key insights from Valerie Mason Cunningham Intercontinental Hotels Group Employed Lean Six Sigma methodology Implemented remote control to minimize deskside visits Standardized operating system and IT environment • • • • A leading hospitality company. managing brands such as: Holiday Inn Crowne Plaza Candlewood Suites • • Moved administration offsite Eliminated redundancy among vendors Client Challenges Client Challenges • • Needed to cut costs to stay competitive during post9/11 travel downturn… While at the same time improving customer satisfaction with IT support services Measurable Results Measurable Results • • Achieved savings goal of $1..

($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.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Case Study Solution Solution • • • • Key insights from Valerie Mason Cunningham Monroe County Sheriffs Department Employed Xerox Lean Six Sigma methodology Digitized and streamlined accident report process Created web-based document access system Integrated existing systems • New York State’s largest sheriff’s office Client Challenges Client Challenges • • • • Balance $100M budget Improve quality of service in accident report management Eliminate backlog of more than 3. so they can spend more time ensuring public safety Measurable Results Measurable Results • • • • Reduced cost of processing an accident report from $28 to $8. Xerox Corp.. worth $32K/year © 2005.000 records and over 4 months of data entry Free deputies from paperwork. ISBM & CBIM 9 Institute for the Study of Business Markets Center for Business and Industrial Marketing .

com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 10 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande Pulling the Focus Out: The Basics of Six Sigma and Its Applications to Business Marketing Pete Pande President Pivotal Resources Inc. ppande@pivotalresources.

• 6σ raises employees from an inward focus to an external focus. loyalty. behavior. • Emphasis is on the value creation process rather than individual functions. involving both analytical and creative skills. • Understand and satisfy customers more effectively. tailored to a specific process. rather than opinions. to a focus on the customer. and gains to shareholders Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. • Drivers of satisfaction. Staying ahead of the competition? • Enhance efficiency • Reduce variation. • 6σ integrates many tools and concepts. or problem. market share • Monitor how we’re doing. ISBM & CBIM 11 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande Six Sigma is a system linking process management based on facts & data. business. 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.

x3. Pivotal Resources ISBM & CBIM .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande Y = f (x1. x2. x4…) Promotion Process VOC Process Six Sigma manages the critical business process Xs that determine the process output Ys. Institute for the Study of Business Markets Center for Business and Industrial Marketing 12 © 2005.

2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande Key Principles All processes vary • Variation is due to various causes: people. • We can learn from variation. • Too much variation = trouble. Eliminate irrelevant Xs and the reject scrap outside the customer’s requirements. Variation. information. Change need not be expensive. processes & procedures. caused by the bad Xs. tells the story. environment. the only way to know which Xs influence outputs and which create process defects. Pivotal Resources ISBM & CBIM 13 . Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. equipment. not before & after averages.

the process. the goal.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande “DMAIC” Process: The Six Sigma Analytical Model • Define: describe the problem or pain. ISBM & CBIM 14 . the customer • Analyze: review process and data to identify causes (Xs) • Improve: develop solutions.and long-term Customer focus without Six 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 Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. short. 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. the outputs (Ys) • Measure: gather data on the problem.

if ever. too! • Priorities change to match their latest crisis • They may not really understand their own customers’ requirements • What they think they know could well be wrong Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. • They have other important priorities • Rarely are they experts in our products and services • Customer organizations have silos.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande “Law of the Ignorant Customer” • You need a multi-level VOC research process because every single methodology is flawed. or expect. Pivotal Resources ISBM & CBIM 15 . understand or can communicate their own requirements as well as we’d like. • Customers rarely.

• Companies that focus mainly on hard-dollars. remember that it’s rare that only one function controls the whole process.. vs. yours and theirs. gather data.” • 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. ISBM & CBIM 16 . To see it all and see who’s to blame for problems. formulate and assess hypotheses. Own and drive Voice of the Customer capability • Clarify objectives. start at the end of the process and work backwards. • Instead of succumbing to the “please the boss” approach. communicate knowledge. support decisions • Marketing operations have an opportunity to play a key role in company improvement. • Look a the broader “supply chain. wind up doing cost reduction rather than output improvement. softer outputs. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pete Pande 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 you’d need were the process outsourced. Develop creative ways to deal with the Law of the Ignorant Customer • Challenge current assumptions.

com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 17 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt Applying Six Sigma to Marketing at DuPont The Science of Marketing Jane Hrehocik Clampitt Strategic Marketing Practice Leader DuPont Consulting Solutions jane-hrehocik.dupont.clampitt@usa.

ISBM & CBIM 18 . Are you making things better for the customer.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt How We Connect Our Science Capability to The Marketplace • • • • Use Six Sigma as a common language and disciplined process across the company to improve our marketing and sales competency Bring products to the marketplace that have relevance in the value chain and respond to end customers needs Target regions where economic growth is rapid Key requirement: An external perspective. or just more convenient for you? Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. DuPont Co..

2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt 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 invest in 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 DuPont in marketing.. ISBM & CBIM 19 . the Strategic Marketing Process. maps directly to Six Sigma” Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. DuPont Co.

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 is no 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 capability and 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 interactions—an ongoing process---to gain insights on market trends. electronics • Intense competition in component material supply • DuPont competitive advantage lies in great quality. broad offering. side and rollover displays. industry structure and offering relevance in the global automotive industry Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt 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. ISBM & CBIM 20 .

growing and an area of focus • A vehicle’s 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 DuPont’s 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 in the world. ISBM & CBIM 21 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt Tools: Voice of the Customer discussions • Confirmed accurate segment selection and choice of goal • The automotive safety market space is evolving.” • Received DuPont’s 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 Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.

and satisfaction experience • Classification into four categories: attractive. the default offering. • Creates strong alternatives and identifies optimal concept • A disciplined. and DuPont Performance Coatings • Focus the team on the creation and testing of a new product and service supply model for this customer. ISBM & CBIM 22 . team-based process including the customer and strong route-to-market partner Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. route-to-market partner. indifferent and one-dimensional (they love it or they hate it) elements of offering delivery. 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. • Pugh Matrix approach evaluates offering concept options. we could lose this customer’s business • If the current method is improved. rating each for its ability to improve fulfillment of each need vs. must-be.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt Case study: delivering & capturing value Problem: How can we accelerate growth in auto safety? • DuPont Performance Coatings shares a 50/50 supply position with a competitor for a strategic customer’s business • This customer is not satisfied with our current method of supplying product and service through our existing route-to-market partner • If the current method is not improved. we could gain a greater share of this customer’s business Goal: • Develop a new service model that satisfies this customer’s 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.

Take advantage of creativity. • Marketing research is an investment! Though not necessarily new. Have the organization do work as “projects” highlighting each process step. Establish managing processes. voice of the customer insights. • Use multi-generation planning to determine what to accomplish now. Six Sigma is not painful. what to do later. a disciplined process focuses creativity. • 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 We’ve Learned” 5. Build your business on a solid foundation of external. Define “winning” in measurable terms. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. • Determine where the revenue and costs originate. not opinions. Tell each employee where they fit in. making the hard simple. • You need facts. 3. direct. • Communicate clearly. 4. but is a natural integration with marketing and marketing leadership on real projects. the customer recognized the partners’ service capabilities. 1. Map your strategy to show links among key elements. ISBM & CBIM 23 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jane Hrehocik Clampitt 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. 2.

2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing

Key insights from Gordon Swartz

Performance-Driven Marketing:
Applying Six Sigma Principles to Demand Generation Gordon Swartz
Vice President MarketBridge
gswartz@market-bridge.com

Institute for the Study of Business Markets Center for Business and Industrial Marketing

© 2005, ISBM & CBIM

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2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing

Key insights from Gordon Swartz

Performance-driven marketing requires tying sales and marketing investments to 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 don’t 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 marketers complain of having too much data while missing critical data. • People skills and management dependent: hiring, training and motivating in the 6σ 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, with little systematic experimentation • Historical emphasis on “automation” technology vs. business intelligence technology. CRM captures increased 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 Institute for the Study of Business Markets Center for Business and Industrial Marketing

© 2005, ISBM & CBIM

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2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing

Key insights from Gordon Swartz

Case Study: Optimizing Marketing Spending Mix
With its sales force closing complex orders in the $1-10 million range, company recognized that each sales and marketing investment has a unique incremental yield curve affecting overall marketing and sales pipeline performance. • We need to know where we are on each investment’s yield curve. • What would happen if a key competitor shifted its allocation? • Altering an allocation can change downstream yield curves.

Institute for the Study of Business Markets Center for Business and Industrial Marketing

© 2005, MarketBridge, ISBM & CBIM

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2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz Armed with a robust model. • The model indicates the direction of spending changes to be made incrementally. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 27 . simultaneously accomplishing cultural change over time. cultural and institutional issues arise. MarketBridge. we optimized the firm’s $100 million+ marketing mix spend. • Shifting spending changes the relative importance of functions within the organization. Learning.

MarketBridge. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. We get more sophisticated examining the lagging brand effects of spending. ISBM & CBIM 28 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz Case Study: Optimizing Marketing Process Yield Modeling the effects of adding media to a campaign is straightforward.

MarketBridge.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz Experimentation via controlled field tests reveals how media interact. ISBM & CBIM 29 . Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.

• The “Rule of 5s” generalization: A 5% budget remix produces five times more return than achieved by a 5% budget increase. ISBM & CBIM 30 SAMPLE DASHBOARD METRICS . MarketBridge. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz Multi-channel marketing & contact management optimizes tactical and end-to-end results • Gains of these magnitudes have been achieved by changes in marketing mix allocation with no increases in overall spending.

ISBM & CBIM 31 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz The best marketing organizations use the pipeline framework to launch Six Sigma discipline The challenge and opportunity is in the integration of lead and relationship management tactics. The “green spot” provides the process control threads linking market conditioning and sales management. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. MarketBridge.

and media to test. • Measurement: • Collect and filter time-series response data • Produce econometric analyses. market. simulate forecasts • Replication: • Develop ongoing test model across framework • Embed measurement and testing methodology within market management. offers. Avoid attempting to build the “intergalactic data warehouse. • Design: Design tests with segments. interactive effects).g. establish offers. • Execution: Engage market managers and campaign planners to mine databases.” Organize around the critical information needed. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. and execute tactics within execution and test construct.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz In-market experimental design is a foundation of Six Sigma discipline • Hypotheses: Develop hypotheses to be tested (e. correlations and interaction elasticities • Compute optimization scenarios. ISBM & CBIM 32 . offering and execution functions. control and normalize. attributes. yield.

MarketBridge.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Gordon Swartz In which decision-making phase does your company operate? Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 33 .

2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. Charles Clark Six Sigma in Sales and Marketing? One Black Belt’s Experience in Process Improvements 3 examples A.com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. Marketing and Sales Dow Chemical acclark@insightbb. Charles Clark Former Six Sigma Black Belt. ISBM & CBIM 34 .

agreed & mapped with accounting dept. • Measure: Found poor managerial systems to track the process. ISBM & CBIM 35 . •Process outlined. standards for inputs and outputs. false reports. process owners? • Improve: Nine months to get everyone to agree on new processes. launched company-wide •Standards created for review & audit functions •Monthly reporting established with expense auditors •Awareness campaign boosts knowledge & sets expectations •Company policy web archive established •Auditors released for other work •Margin disappearance stopped Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. missing reports.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. •Process manager role added to existing position •Coordinated with Bank of America’s EAGLS system. Charles Clark Project #1 — Business Practices Parent company auditors found multiple cases of expense abuse and poor reporting while investigating 3 years of expense records. • Analyze: What is the process. missing receipts. • 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 6σ tool that applies to everything we do in sales and marketing • Define problem: missing funds. etc.

better information about company expectations of funds usage & reporting Definitions of defects standardized . Solution sustainability? Employees’ awareness GREATLY increased Role & responsibility of management to monitor. accounting & sales / marketing groups New employees orientation changed -. communicate & inspect . Charles Clark • Control: Process manager reports to national sales manager Process manager empowered to inspect. intervene & enforce Business ethics position created by Global Ethics committee Compliance definition & tracking better coordinated: legal.auditors & managers Monthly reports by process manager to national sales mgr.better Process mgr functioning as champion Internal capability to know individual “practices” significantly enhanced Process ownership clearly identified. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. ISBM & CBIM 36 .

non-coordinated campaigns. inconsistent use of trademarks. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. biz objectives. We had no systems or process mentality to track and document the basis on which we could make decisions. process owner. cost analyses. Our lead agency asked for more business. we had simply examined and approved invoices. Our Six Sigma project examined the processes and justified the cost savings of consolidation. we had to go externally to the agencies. Analysis defined the process via surveys and interviews. we realized there was no process map. • Suspected redundancy of effort and cost. missing synergy and staff overlaps. insights •What is the unit flowing in the process? Brand message unit •What is the process output? Product brand messages •What are the standards for the output? $-effective & on-strategy •Who is the process owner? Brand manager. mgr. ISBM & CBIM 37 . or data comparability across agencies. Despite 18 years of success with the lead agency. standards. and 2 Black Belts •What is the process? Communications development •What are the inputs? Marketing plans. success metrics. Internally.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. marketing mgr. Charles Clark Project #2 — Agency Consolidation Multiple communications agencies employed to produce annual product communications for > 50 brands. •Process manager? Agency personnel (?) •Process stakeholders? Managers & leaders An example: Tracking costs. off-strategy work.

•MEASUREMENTS discipline -. Work definition process = marketing plans Process map created with agency & product groups Electronic routing & approval adopted Process manager designated Cost codes standardized to match process [168 to 9] Lead agency process aligned with codes & process Reporting & tracking by business unit Accountability enhanced with more relevant data Control: The agency started tagging costs according to each costs’ step in the communications process •Concentrating ALL work in -1. Agency very cooperative and committed .a mentality & a NEW process step.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. Charles Clark Improvements: We have to properly define the process in order to cut account management costs. •Clarifying PROCESS phases (added DEFINE) & work output standards. communicate & inspect much improved Internal interest in process discipline and data-driven decisions improved.more at risk Process ownership better defined & assigned. Institute for the Study of Business Markets Center for Business and Industrial Marketing 38 Sustaining the gains by: © 2005. •Directing work via MARKETING PLANS – by value score •Achieving “buy-in” from the lead agency on value of changes & processes Roles & responsibility of management to monitor. others trimmed. •Four major agencies terminated.agency. ISBM & CBIM . •Utilizing standardized Cost Elements in billing & reporting.

Cost redundancy? Balanced deployment? Efficiencies lost? • 4 different specialized sales forces share the same geography. Solution: • Analyze balance of sales force deployment. agreed criteria Crop segment managers identified & role defined dBase administration clarified and corrected Marketing plan template refined with product manager and market research agency to include sales rep inputs AND measures of potential 2 territories combined at savings of at least $300. workload. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. Process outlined & mapped Process ‘operator’ designated Standard definitions for data adopted Key crops identified based on specific. task complexity.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. by territories. overlaps. sales levels and other key variables. etc. ISBM & CBIM 39 . Charles Clark Project #3 — Sales Force Deployment • Specialized sales force is covering same territory as traditional sales team.000. • Improve balance. the same distributor accounts and the same retail dealers and exhibit vastly different levels of productivity: as much as 425% variation between top and bottom full-time territories.

Marketers have a bias for action. Second Thoughts & Learnings •Six Sigma methodologies and philosophies fit in the world of sales and marketing because it’s not about theory. Charles Clark Solution sustainability? Product manager / district manager buy in! Key market researcher supports use of sales rep.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. ISBM & CBIM 40 . data in his market assessments Sales rep data also included in marketing plan Sales rep input processes unchanged Other sales specialties re-deployed people based on project analysis and outcome Generated interest in other sales related projects that continues even today. If no problem hypothesis. human-based marketing has a chance in this process world. it’s about action. coordinated and linked together in the right way. •Problem statements are crucial. no go! •Process maps are invaluable •Project champions are a vital imperative: a human being taking responsibility •Process “partners” greatly facilitate improvement •Standardization is critical in support systems •Process ownership is the king of all solutions •Sustainability is biggest worry…will managers forget. minimize or just overlook? •Creativity is not necessarily compromised by discipline •Decisions without data are usually costly •Cost-of-a-rep myth debunked !! •The discipline of data-based decisions is difficult ! Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. •If things are aligned.

and cross-functional relationships. go back and reevaluate the projects you did in year 1 and do them again. Charles Clark Suggestions • About year 4 or 5. sign-offs. • Get a good grip on the what’s. communications flow. how’s and why’s of 6 Sigma. These usually are interface points between procedures. • Then fix not-as-tangible processes… approvals. collaborations. consider how to seriously engage the customer. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. planning managing. ISBM & CBIM 41 . Those projects will be the major breakthroughs & gains! These are usually always interface points between groups. • A great metric to consider: What percentage of your marketing budget is “touching” the customer? • Fix the most tangible processes first… paper flow.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from A. Practice in the backyard and get ready for the real deal. services flow. etc. documents flow. Your outcomes will probably be a little different because you know more. Then. creating. data flow. These are usually interface points between people.

O’Connell 3M Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 42 DuPont .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Roundtable Panel Marketing Process Improvement and Six Sigma: Why now? When will it work? When won’t it? Selected Question and Answer Highlights Roundtable panel discussion: The Customer Strategy Group Moderator Xerox Fred Wiersema Valerie Mason Cunningham Jane Hrehocik Clampitt Jean M.

you see improvements to make that you didn’t see before. Clampitt: DuPont is science-oriented with many technical people.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Roundtable Panel Wiersema: A recent Bain Consulting survey found that 77% of senior executives think that tools like Six Sigma promise far more than they deliver. but not the marketing process and helping the customer get its own processes right. ISBM & CBIM 43 . We had a marketing process and wanted to apply what has worked in operations to that marketing process. When you address those. He told each manager to hire three Black Belts. which addresses product quality and customer needs. O’Connell: Four years ago we got our first CEO from outside the company. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. one each for growth. [A show of audience hands finds that more than half believe their corporate culture is not yet conducive to Six Sigma.We were a company in crisis and needed some discipline for managing the business.] Wiersema: How do we market Six Sigma in our organizations? What is the value proposition? Cunningham: We used TQM. He brought Six Sigma with him. we were weak in capital usage. Decision-makers used capital for free and were evaluated only by their P&L. from General Electric. cost management and cash management. For instance. What got your companies started with Six Sigma? Cunningham: Timing was critical for us.

who see that Six Sigma is a process for thinking and solving problems.” but they changed their attitudes about Six Sigma once they saw the results. and not so much a tool in itself. We select green belt candidates with leadership potential. Cunningham: Six Sigma wasn’t new to us. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. the average initiative went away after three years. and the top executive pushed executives to launch projects. ISBM & CBIM 44 . and multimillions in accounts receivables. We convinced management that marketing needed Six Sigma. how do you package Six Sigma? Is it for everybody? Will marketing embrace it or is it analytics for nerds? Clampitt: We found that everyone going through the program has been successful. When you have good coaches on projects. At 3M. but Six Sigma is not going away.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Roundtable Panel Wiersema: But we have to ask. The manufacturing group always used it. Then skeptics turned into believers. O’Connell: We had executives clinging to a lot of “tribal knowledge. saving a million dollars in inventories. people can’t sit and wait it out. Wiersema: How do you roll out Six Sigma? O’Connell: There are as many models as you want to adopt.

We shifted some spending to events to improve how we build the customer experience. Choose projects than genuinely further the business. we learned we weren’t getting results from what we thought was a good direct marketing program. And leadership turf issues did stand in the way. Wiersema: You have to determine what is the right project for your company. Then you need a leader to challenge the religious zealots and the laggards who do nothing. You have to go upstairs. Cunningham: If the project doesn’t improve the customer experience and advance the interests of the business. Cunningham: For example. O’Connell: Don’t be afraid to kill high-visibility projects that are not working. bringing the people who are obstacles into the solution works. And. Responding to Audience Questions Q: How do you keep Six Sigma from becoming a religion. so wrapped up in tools and tech rather than the objectives? O’Connell: Six Sigma must be driven for business strategy. around obstacles. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Roundtable Panel Clampitt: People did resist Six Sigma by shooting holes in data and disagreeing with interpretations. stop it. ISBM & CBIM 45 .

Roach CEO Breakthrough Marketing Technology pamela@breakthroughgroup. Breakkthrough Marketing Technology. ISBM & CBIM 46 .com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pamela Roach Banquet address: Delivering What Customers Value The “Quest for Excellence” Pamela J.

The unique report will enable you to directly compare your Marketing and Sales process capabilities to a composite of your peers. applied as needed. use of customer data. Each participant’s business will be profiled with its individual statistics. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. co-sponsored by ISBM. • This is a free introduction to ProMetrix . Six Sigma is a way of thinking and making decisions based on facts. will allow you to compare your marketing performance to other firms. communications effectiveness. ISBM & CBIM 47 Our current study.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pamela Roach 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 doesn’t necessarily translate into Marketing and 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. • The study addresses a sampling of critical marketing competencies: market selection. Breakkthrough Marketing Technology. including the ROI impact of its marketing strategy. the report will highlight opportunities for improvement. clearly defining a problem before you try to solve it. Whether or not your business is Six Sigma driven. a software-based diagnostic that identifies the ROI impact of marketing and sales underperformance. the ProMetrixSM SV Benchmarking Study. SM . with emphasis on top line growth • Tool usage is flexible. robustness of sales process. and sales channel productivity.

each segment with its own supply chain. • Fostering a win/win employee attitude. • Intensely competitive marketplace. Where do we participate to capture share? • Voice of the Customer attempted to identify special candle effects customers wanted. • Competitions like this can help create a pro-Six Sigma culture change by inspiring employees.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pamela Roach A Case Study: AstorLight® A project contending in the prestigious 2000 America’s Quest for Excellence: the “best of the best” Six Sigma Plus projects throughout the various Honeywell business units. • We faced tight budget constraints. Breakkthrough Marketing Technology. it transforms from a top-down to a bottom-up commitment to continuous improvement. ISBM & CBIM 48 . “Everyone said. ‘We want something new. 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). • Wide dispersion and types of retailers. when Six Sigma gains traction in an organization. with the wax business far upstream from the consumer. but we don’t know what it is. Our approach: We started by segmenting the value chain. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. Our challenge: Delivering 12% annual growth in a commodity market—industrial wax for candles—in a market forecast for 7-10% annual growth over five years.’” We always hear that in markets. • Six Sigma competence reduces the risk of the company missing potential merger synergies.

• Both approaches worked. researching retail offerings. • The success of a differentiated value proposition in a product category thousands of years old shows that in any market. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. The approach was bias-free. qualitative and focus group research on a shoestring with employees from other Honeywell business units and their friends. VOC led the way to high-margin commercialization: customer interviews. • We employed a critically important Six Sigma tool:FMEA. you can charge the retailer more and capture more cash from the retailer. ISBM & CBIM 49 . a failure its mode its effect by analysis in a cause-effect manner. there’s always an opportunity for technology and differentiation. Customers linked quality candles to quality ingredients. Breakkthrough Marketing Technology. • We learned that men appreciate candles and special effects. But when you know there are.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pamela Roach Forming the team: The results we sought indicated the kinds of experts needed. 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 and company inputs required We addressed risk affecting our brand and partners • We tested sensitizing consumers to our ingredient brand with a radio personality endorsement and an Internet campaign to the cottage industry making high-end candles. • The retailer will never tell you that there are customers willing to pay more. FMEA provides an early warning on problems and trigger points for contingency plans.

• 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.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Pamela Roach We created what’s 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. ISBM & CBIM 50 . Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. Breakkthrough Marketing Technology. 13% revenue growth in 9 months from new products. • 21% revenue growth in six months. and new behaviors. long-term supply contracts were negotiated. new insights. • We beat time and dollar targets.

ISBM & CBIM 51 . Clancy Chairman & CEO Copernicus Marketing Consulting kclancy@copernicusmarketing.com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy Keynote address: Six Sigma Dreams Half Sigma Realities Kevin J.

We found that in 39 of 48 B2B and B2C categories. Far more brands are sliding toward commoditization than commodities are transforming into brands. Only 14% of companies on the Fortune 1000 list are growing faster than the GNP. brand equity is declining. but few companies are really doing it.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy The buzz today is all about Six Sigma marketing. Copernicus Marketing Consulting. ISBM & CBIM 52 . Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.

Find a market that’s at least 3 sigma above average in terms of potential profitability. and are often in the bottom decile of profitability. • SIC code/industry specialization is too narrow. Six Sigma approach is to analyze 50-250. • The counterintuitive. • The intuitive.” — Philip Kotler • Problems with the two most popular B2B targets. too heterogeneous a segment. • Heavy users are price sensitive and deal prone.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy 5 Best Practices to turn 6 Sigma Dreams Into Reality 1. • “If you nail targeting and positioning. everything else will fall into place. Copernicus Marketing Consulting. half-sigma approach is to make a decision in about 5 minutes.000 different targets to identify the ones forecast to be most profitable. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 53 .

• Examples: •Spending in the category •Current spending on your brand •Problems which if solved would lead the customer to switch •Price insensitivity •Responsiveness to your brand •Cost to deliver and serve •Opinion leadership/personal influence •Interest in new products and services •Cost to reach and impact with sales force and marketing communications Examine many different segment plans on the basis of profitability Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy Proxies for Profitability enable being approximately right rather than precisely wrong. Copernicus Marketing Consulting. ISBM & CBIM 54 .

and powerful that once launched. • WARNING! Need-state analysis (customers rate benefits and attributes)---the all-time most popular quantitative research for uncovering needs. It’s the discipline of solving customer problems. ISBM & CBIM 55 .2. •People hesitate to say anything that makes them seem superficial. • Marketing is not the discipline of giving people what they think is important. parity. one at least 3 sigma above average. •People will say that something is unimportant if they don’t know anything about it. or 3 words.e. it appears to be in the minds of marketing managers and not customers and prospects. phrases or sentences about your brand that you want to imprint in the heads of key stakeholders. • The best practice. or inferiority to a key competitor (next slide). succinct. cross-referenced to our brand’s superiority. Copernicus Marketing Consulting. • 1. problems and motivations---can be dangerous. 2. • Our study of more than 400 consumer TV and print ads found only about 7% communicate a raison d’être. it leads to a powerful brand. counterintuitive approach to positioning begins with a clear understanding of prime targets’ needs. Accept nothing less than a breakthrough positioning. and pains (i. which indicates the most potent attributes for competitively superior positioning.. services and brands are positioned at all. so clear. 2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy • Our new model of buyer behavior weighs benefits and attributes on three motivational dimensions. •“Dream detection”: the self-reported ideal •“Problem detection”: discrepancies between what they want and what they get •“Preference detection:” the attributes/benefits that predict an individual buyer’s preference • We rank attributes by motivating power. problems. if products. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. • In most companies. •Needs should not be mistaken for problems and marketing is about solving problems. motivations). •People do not want to admit that they are prices sensitive and in a company driven by price.

Copernicus Marketing Consulting.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. ISBM & CBIM 56 .

2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Kevin Clancy 3. the more they will change the implementation plan. and are shifting investments to alternative vehicles such as sports. 4. • But that won’t get you to Six Sigma if you don’t fix what caused the poor performance in the first place: weak targeting. best practice approach involves innovative model-based plans with empirical underpinnings. • Most companies develop marketing plans without any real knowledge of the relationship between marketing inputs and outputs. especially 30-second TV spots. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. • 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. positioning and media strategy. •Tactical plans derive from prior year’s failed plan. with a relationship to objectives weak at best. Develop a Three Sigma+ marketing communications strategy. • A Three Sigma marketing strategy creates more product awareness for less media spending. Use marketing science tools to develop better marketing plans. Obsessively and compulsively implement your marketing plan. the Internet and other non-traditional media. • Marketers today have lost confidence in traditional media. ISBM & CBIM 57 . 5. thereby integrating objectives. • Drag managers out of their separate fiefdoms to focus on implementing the strategy. Copernicus Marketing Consulting. events. strategies and tactics. • The counterintuitive. interactive kiosks. •Managements set objectives only remotely related to strategy. • Audit implementation to ensure conformity to strategy and plans.

Six Sigma Operations 3M Company jmoconnell1@mmm.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jean M.com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. O’Connell Director. ISBM & CBIM 58 . O’Connell Business Marketing at 3M Using Six Sigma: ‘The Customer Project Approach’ Jean M.

• Projects must be about the customer’s critical “Ys”—the customer’s “pain point” • Focus on improving customer processes and 3M/customer shared processes • Joint 3M/customer team membership and project ownership. Improve. Analyze. Control) •DFSS (Design for Six Sigma) •Understand and reduce process variation and product variability •Data Based Decision Making •New Product Introduction (DFSS) . Six Sigma is … • Initiative •Strong linkage to business goals and customer needs •Leadership development at core •Breakthrough improvement •Strong linkage to business goals and customer needs. ISBM & CBIM 59 . O’Connell At 3M.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jean M. Six Sigma is the driver behind all other corporate initiatives.reduces variability & gives customers what they want We’ve done more than 400 Six Sigma projects with customers to date. •Management reviews •Sustaining gains •Process and Financial results($$) • Methods and tools •Process thinking •DMAIC (Define. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. a solutions company that happens to make products. 3M. project champions on both sides • We do not put a Black Belt on a customer project until the person has done 2 internal projects. Measure.

ISBM & CBIM 60 . 3M. O’Connell The Roadmap Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jean M.

M.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jean M. ISBM & CBIM 61 . Juran • Has a Process Owner • Problem is of major importance to the organization. You’re forced to develop metrics. etc. But at the start. control plan. 3M. don’t let a lack of data stop you. even better if of major importance to both organizations •Clearly connected to business priorities • Clear quantitative measures of success •Baseline. O’Connell Mutual Y’s 3M’s Y’s Customer’s Y’s What is a Customer Project? • Improves a specific customer’s processes or products • Can improve 3M’s processes • Involves customers as active project team members • Is “owned” by the customers: metrics. • Reasonable scope – Able to Complete in 4-6 months •Project support often decreases after 6 months •Don’t want to “boil the ocean” Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. A good project … • Identifies a problem to be solved: “A project is a problem scheduled for solution” J. goals and entitlement well-defined (data).

O’Connell Key Success Factors Organizational integration • Joint Executive Commitment (Customer and 3M) • Joint Resource Commitment (Customer and 3M) • Customers on the Team Key Learnings Customer-owned metrics • Critical Customer Need and/or Pain • Data determine the price/value of solutions • Customer Owns Metrics & Control Plan • Building executive-level contacts is key Flawless execution • Enhances customer intimacy: first-hand voice-of• 3M Knowledgeable Experts customer and customer business direction/ • Customer Training strategy • Clear Expectations • Allows for leveraging of all 3M technologies • Deliver on Promises • Co-location solidifies partnership • Operational Excellence • Advantage in speaking common language with our customer “Six Sigma relies on creativity as well as fact. and it is relevant to product and merchandising . 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 what’s truth and what is myth. 3M. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Jean M. VP of Strategy and Performance Improvement for Target Corp.” — Michelle Moorehead... ISBM & CBIM 62 .

lapointe@marketingnpv. ISBM & CBIM 63 .2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Patrick LaPointe Six Sigma or Not: Building Better. More Accountable Marketing in Today’s Complex B-to-B Organizations Patrick LaPointe Managing Partner MarketingNPV pat. More Effective.com Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.

But the real heavy lifting occurs at the start of the chain. That is fundamentally the psychology of why Six Sigma has not penetrated marketing so far. though adept at persuasion. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. they struggle. Six Sigma has some formidable marketing enemies: Foot dragging. missing the context. • A 2002 Study by Hewitt Associates found that Marketing is a key participant in over 2/3 of inter-departmental conflicts within Fortune 500 companies. micro-scoping. • But in most organizations.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Patrick LaPointe Marketing success depends on a chain of factors that build credibility in the organization for the art and science of marketing. NOT an analytical one. MarketingNPV. When Six Sigma initiatives enter in the middle of the chain. leading to conflicting views over objectives. we must look at the role of marketing in the organization. and of the facts. • Marketing effectiveness is a cultural/organizational problem. resentment and passive-aggressive behavior. It all stems from fear of the unknown. of the known. Marketers. marketing’s role is poorly defined strategically and tactically. information hoarding. To address the enemies. • Marketing is not like the rest of the organization. fear that that numbers people will expose their limitations. ISBM & CBIM 64 . the broad-based understanding and the culture of the process.

politically-charged. the CFO. creating job satisfaction and a culture of performance and success • Elevate marketing accountability to earn the trust and confidence of the CEO. interpretation even more so • When measurement strategy is delegated. yet skill shortages are a commonly cited obstacle • Delegation • Selecting metrics is “big picture”. and others throughout the company Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005. 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.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Patrick LaPointe 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 it’s on the computer. MarketingNPV. it must be true” • Researchers/Analysts are poorly paid with little/no career path • Training in measurement is rare. ISBM & CBIM 65 .

MarketingNPV. not the symptoms. 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. Learn the language of marketing 2. 4. Institute for the Study of Business Markets Center for Business and Industrial Marketing © 2005.2005 Joint ISBM-CBIM Conference Six Sigma and Business Marketing Key insights from Patrick LaPointe 6 Common Six Sigma Mis-steps in Marketing • Launching outside of Marketing first. Embrace variability. areas marketing wants to discuss such as voice-of-the-customer and process mapping when presented in terms of marketing’s objectives. 4 Keys to Success for Black Belts Importing Six Sigma into Marketing 1. Start on common ground. ISBM & CBIM 66 . because marketing does not have the predictability of manufacturing and operations. Work the problem. 3.

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