how to improve your revenue and profit - make your sales...

Make Your Sales Funnel Flow Faster

Adopting a Lean Six Sigma Approach to Sales and Marketing

or

How to Improve Your Revenue and Profit

15% This Year!by Applying Lean Six Sigmato Your Sales and Marketing

2006 © Copyright Sales Performance Consultants, Inc. 2


Agenda

Applying Six Sigma to Sales and Marketing

• Why Should You Care?• How Does it Work?• What Could You Achieve?• For More Information



Why Should You Care?



To What Extent Are You (or Your Clients) Troubled by Issues Such As:

1. Inadequate or poor quality lead generation

2. Marketing investments with no measurable return

3. Marketing, selling, and servicing departments operating in silos

4. Lack of true sales support

5. Salespeople acting independently from the company’s interests

6. Salespeople unable to close

7. Poor forecast accuracy

8. Hockey-stick order cycles (EOP discounts)

0 1 2

0 1 2

0 1 2

0 1 2

0 1 2

0 1 2

0 1 2

0 1 2



Case Study #1

$4,509 per week

An 88% improvement on sales!



Company: Technical Resume GroupSelling channel: WebsiteProduct: Technical Job Candidate Resumes

Customers: Employees• Looking for technical/managerial jobs• Provide resume information • No fee charged

Employers• Looking for technical/managerial

candidates• Pay a fee for resumes meeting their

criteria



Rolled Throughput Yield



Sales Website: Original State

Rolled Throughput Yield (RTY):RTY = (yield of pricing page) X (yield of signup page) X (yield of

orders) = .485 x .233 x .5= .056

Process Financial Model: Average visitors/week = 567 Average order value = $152.65Revenue = visitors/week X RTY X average order value

= 567 X (.056) X $152= $4,826/week



VOC for the sales process itself



2006 © Copyright Sales Performance Consultants, Inc.



Process Behavior Charts:After



Website: New State

New Rolled Throughput Yield (RTY):RTY = .084Process Financial Model: Average visitors/week = 567 Average order value = $196Revenue = visitors/week X RTY X average order value

= 567 X (.084) X $196= $9335/week


How Does it Work?


Make Your Sales Funnel Flow FasterSix Sigm

a

Layers of problems and solutionsBusiness problem

Are we doing the right thing?

Are we doing things right?

DMAIC & Six Sigma tools

Applied statistics

Lean



Apply Lean: Where the problem cause is known

• 5S (housekeeping)• Setup-Reduction• Kanban• Total Productive Maintenance• Cellular Manufacturing• Value Stream Mapping• Team Building• Kaizan



Apply 6σ: Where problem cause is unknownBy emphasizing processes, using a structured data-driven approach,

Six Sigma resolves business problems at the root-cause level.

• Qualify the problem• Quantify the problem• Assess Y• Conduct MSA• Identify all Xs• Analyze for root causes• Quantify impact of Xs • Reduce to the “vital few”

• Evaluate solutions• Select optimal solutions• Develop control plan• Implement control plan• Maintain the gains!

Measure

Analyze

Improve

Control

Pro

cess

Cha

ract

eriz

atio

nP

roce

ss

Opt

imiz

atio

n

Define

Courtesy of Six Sigma Consultants, Inc.



Sales and Marketing as a Production System



Types of Waste in Sales and Marketing

• Insufficient knowledge of customer wants/needs• Ineffective, unnecessary market communications• Unclear definitions for key terms

(for example: leads, qualified opportunities)• Targeting the wrong markets, prospects, and

customers• Asking prospects and customers to do things

they are not ready to do• Failing to align strategies and tactics to customer

value



Cause vs Effect

• Why do some promotional campaigns produce a 1.5% response, and others a 2% response?

• Why do some educational pre-qualifying seminars have a 15% conversion rate, while others have 20%?

• Why do some [fill in the blank] have a 20% close ratio, and others 30%?

[Fill in the blank: product lines, market segments, salespeople]

23


Why worry about this?

Promotional Campaign

Promotional Campaign

Educational Pre-qualifyingEducational

Pre-qualifyingClose RatioClose Ratio

500,000 pieces

X 1.5%= 7500 leads

X 15% = 1,125 opps

X 20% = 225 deals

X $50k = $11,250k

500,000 pieces

X 2% = 10,000 leads

X 20% = 2,000 opps

X 30% = 600 deals

X $50k = $30,000k

Minor improvements in conversion multiply their effect!

5% improvement5% improvement 5% improvement5% improvement 10% improvement10% improvement



Selling as a Production Activity

Selling Mining



The Problem

Sellers are From MarsThe seller focuses on what they want.

The “Sales Process” is preoccupied with their activities and goals.

Buyers are From Venus

Prospects focus on what they want. The “buyer’s journey” describes their

efforts to solve their problems.

Design the sales process to help the buyer move

through the stages of their journey.

The SolutionMotives of buyers and sellers

may repel each other.



Direct Marketing, Nurturing,Qualifying, and Hand Offs

Articles, speaking engagements

Multi-step direct mail, email

Landing page, opt-in

Conferences, seminars

Telephone interviews

Qualification criteria

Site visit, assessment

Custom proposals

Hand-off

Relationship nurturing

ABC

DEF

GHI

JKL

MNO

PQR



Baby Steps for Enterprise Relationships

What They Get

Website

Google Ad,Landing Page

Public SpeakingAdvertisements

White Papers

White Papers and Auto-responders

Little Module

Small softwareapplication that helps

part of the problem

Consult

Customized solutions (templates) for specific problems,

resulting in better data and decision making.

Phase 1

Enterprise Software Shared data => ROI in form of better, cheaper,

faster organization.Confidence in solution

Enterprise

ROI realized across enterprise –better, cheaper, faster

organization.



The Marketing and Selling Chasm

Sales

Marketing



Typical Challenges

• Resistance to Change• Marketing and sales not aligned• Cultural Assumptions/Norms:

– Competing sales reps– Sales reps picking the “shiniest” leads– Best accounts go to the “best” sales reps– Compensation practices

• Root causes rest in all of our minds – Harvard Business School: Case Study Method



How Can You Benefit?



Six Sigma Project Examples

• $5.5m annualized revenue in 23 new customer accounts

• Reduced defects in pricing by over 70%

• 50% reduction in cost of POS collateral

• Revenue increased $2.6 mCosts reduced by $2.9 m



Current State of Most Organizations: No Control



Traditional Approach: Work Harder!

LargeEffort

Find Win Keep

DiminishingReturn



Sales Process Improvement: Reduce Variations

LeveragedReturn

Find Win Keep LessEffort



What could you achieve?



More Information:

www.salesperformance.com August 2006www.SixSigmaSelling.com

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