The Quest for Quality:
By Yvonne Tocquigny
Applying Six Sigma Principles to Marketing
CEO, Tocquigny
3 Define
6 Measure
8 Analyze
9 Improve
10 Control
11 The New Marketing Organization

The Quest for Quality:
Applying Six Sigma Principles to Marketing
Yvonne Tocquigny Six Sigma principles prescribe an organization- return on every $100 invested in marketing.
wide set of processes, standards and The Marketing Science Institute reports that a
CEO, Tocquigny
motivations to improve performance, create 100 percent increase in marketing expenditures
efficiencies, decrease defects and reduce yields just a 1 percent increase in sales.
Yvonne Tocquigny is
variability. While these principles are And Nielsen reports a 95 percent new product
founder and CEO of
traditionally associated with industrial failure rate.
Tocquigny, a unique blend
environments, their application need not be
of consultancy and Measurement of performance is one of the
limited to that realm. This paper will
five fundamental phases of Six Sigma
marketing firm. Tocquigny specifically explore the potential for applying
methodology. And once a company begins to
specializes in providing Six Sigma principles to create efficiencies in
measure marketing performance, it may
measurable integrated marketing. This is critical at a time when
find, as the preceding statistics suggest, that
marketing solutions marketing is likely to perform poorly in large
the results data indicate a negligible return
that drive proven results. organizations, to wield little influence within
or even a negative return on the marketing
Over the past 25 years, them, and to be held in relatively low
investment. This information can be so
regard among their leadership. Less than 50
Yvonne has grown the firm surprising and disturbing in an environment
percent of Fortune 1000 companies even
into a nationally recognized of rigorous inspection and control that the
have chief marketing officers (CMOs). And in
agency that specializes marketing group may be tempted to sweep
organizations where there are chief marketing
in delivering measurable this bad news under the carpet and stop
officers 32 percent cited their relationship
marketing, as well as measuring altogether.
with the chief executive officer (CEO) as the one
developing proprietary tools
that most needed to improve, according to Increasingly, marketing departments are
to deliver metrics to clients. survey results published in the September 2005 finding that if they do not take steps to measure
She can be contacted at issue of cmomagazine.com. their results and create greater efficiencies,
yvonnet@tocquigny.com the finance group will be more than willing to
By applying a Six Sigma approach, marketing
do it for them—and may very likely respond
has the opportunity to lay a solid foundation for
by cutting the marketing budget. This should
improving what has, by any measure, been
come as no surprise, given that finance is the
astoundingly poor performance. It is not unusual
area that has access to a great deal of
today to see marketing investments that
spending-related data, is focused on tracking
produces a negative return on investments
and cutting costs, and is constantly working to
(ROI), or have a success rate that is close to
discover where resources could be better
zero. According to the June 2005 issue of
deployed. From the perspective of the marketing
Harvard Business Review, citing data from
department, it would be far preferable to seize
Copernicus Marketing Consulting:
the opportunity to set and execute on an
• 84 percent of programs are second-rate, agenda for improvement and thereby restore
leading to a decline in brand equity and its tarnished reputation within the organization.
market share As Tocquigny Chief Marketing Officer (CFO)
Pedro Laboy puts it in the white paper “Why
• 4 percent is as good as it gets for
advertising ROI Marketing Has Lost Its Clout… and What It
Can Do to Get It Back, it is time for marketing
”
• 74 percent is the less-than-stellar figure for
to “step up to the plate” and prove its value to
customer satisfaction
the larger organization.
Other measures are consistent with these
With that in mind, let us look at the current
findings. The Marketing Measurement
problematic state of, and potentially brighter
Association, for example, reports only a $58
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future for, marketing—within the context of the The Marketing Finance Connection and
five phases of Six Sigma methodology: Beyond. With the CMO under increased
pressure to demonstrate the validity of
• Define goals and deliverables
marketing expenditures, the marketing function
• Measure current performance
is inching closer and closer to the one area
• Analyze the reasons for defects from which, ironically, it has traditionally
• Improve the process to eliminate defects maintained perhaps the most distance: finance.
• Control performance Historically, marketing organizations have had
rather adversarial relationships with finance
teams, who have cut budgets and held the
Define purse strings. However, finance is the one
department within a corporation most likely to
Today’s marketing organization faces the
have the data that marketing needs to
challenge of defining its role within the larger
demonstrate the validity of its efforts and
organization in an entirely new way. Only by
expenditures. It is ultimately the definition of
doing so may it begin to provide the scope of
this data and the standardization of data
disciplined processes that will ensure consistent,
across organizations that will quantify the value
reliable data is available for evaluation in the
of the marketing organizations of the future.
quest for improved efficiency and performance.
And high-quality data will only be obtained
This redefinition of marketing within the
through an aligned vision and collaboration
organization comprises two important shifts in
“
with other company functions.
the positioning of marketing: the shift from
functioning as a discrete component to working
Marketing departments
There is the rub: Marketing groups have
as an integral part of the organization, and the
traditionally operated independently within the
shift from playing a tactical role to taking on one
are finding that if they
larger organization, according to their own ad
of increasingly strategic importance.
hoc styles; asking them to form closer, more
don’t take steps to
integrated relationships with other departments
From Discrete Component and groups is bound to meet with resistance.
measure their results and
But there is no escaping the fact that to be
to Integral Role
successful, marketing departments will have to
Marketing has traditionally been perceived as
create greater efficiencies,
become allies with finance. It is the only way
a discrete function within the corporation, but
they will be able to get the quantifiable data
its role is really far more encompassing than
the finance group will
they need to prove their worth.
that. When you consider that brand perception
encompasses everything a customer knows This new need for cross-functional “
be more than willing to do
about a brand, then it follows that everything collaboration and deeper knowledge is a new
that touches that customer is, essentially, challenge for the CMO. Finance is not the only
it for them.
marketing. While that may make it a challenge function blending with marketing. Sales,
to define exactly what marketing is, this much is customer service and even traditionally inward-
certain: There is a growing agreement among facing departments such as product
C-level executives that marketing should create development and operations are finding the
predictable streams of revenue growth. As part lines between their responsibilities and
of the enterprise-wide effort to increase marketing increasingly indistinct. It is no longer
customer value and reallocate capital to its possible to define the marketing function using
most effective use, marketers must set the clear boundaries of the past. Metrics
new goals for quantifiable success and find new must now be clearly tied to business goals, and
ways to achieve them. In this new environment the use of metrics must be standardized
of accountability, they must prove marketing across the organization, with the primary goal
operations represent a value center rather than being to provide insight and drive decisions,
a cost center. not to justify marketing programs.
3

The Groundwork for Six Sigma. Companies department of three (all trained to do little
more than produce spec sheets and trade
that hope to apply Six Sigma principles to
show materials) should be able to achieve.
marketing must first overcome an array of
“ structural barriers: • The marketing function tends to be siloed
into multiple groups—whether according to
The first order of • Many marketing departments that have
region, product line or other differentiator—
been performing a simple “marketing
that operate independently of each other.
communications” role are at a loss as to
business… is to begin to
Each works as an individual power unit with
how they can fill the broader, more strategic
its own set of defined goals, processes and
marketing role that is required to meet the
shift marketing’s role
standards, and each measures different things
goal of quantifiable achievement. They are
in different ways, making it virtually
staffed with employees trained to create
from that of a discrete
impossible to get consistent data or
tactical selling tools, which points to the
implement enterprise-wide controls.
disconnect between the traditional marketing
component in the
skills of the past and those that are needed • There is no mechanism in place with which
to fulfill results-oriented expectations. to communicate marketing’s goals to the
“
organization to a widely
company at large or to seek its alignment
• Even when marketing’s role within the
with and support for achieving them.
organization remains limited to providing
integrated function.
materials to support sales or customer
The first order of business, then, is to begin
services, the larger organization may have
to shift marketing’s role from that of a discrete
unrealistic expectations of what marketing
component in the organization to a widely
ought to be able to accomplish within that
integrated function. This will require
role and with existing available resources.
overcoming existing preconceptions about
Figure 1, below, shows one company’s wildly
ambitious vision of what its marketing the role of marketing, as well as replacing the
Defining the Role of Marketing: Matching Expectations to Resources
One of the challenges for any marketing group attempting to redefine its role in the larger organization is
the disjuncture between what may be expected of it and its ability to meet those expectations. Here is
what one company surveyed said it expected of its three-person marketing team:
1 gather customer/market segmentation intelligence
2 understand the voice of the customer and voice of the business
3 maintain expertise in regulatory issues, industry certifications, etc.
4 develop pricing strategies
5 help negotiate pricing with customers
6 attend sales meetings
7 develop state-of-the-art tools to effectively sell all products
8 work with customers to report on customer satisfaction
9 work with customers to determine product requirements
10 communicate customer product requirements to engineering
11 create a process for sharing information
12 develop and implement efficient, easy-to-use marketing processes
The moral? High expectations of what marketing should achieve must be accompanied by a
commitment to the resources, skills and training required to fulfill those expectations.
Figure 1
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siloed mentality with expectations of integrated to embrace functions such as business
operations, and implementing mechanisms to intelligence, research, customer satisfaction,
connect marketing and its goals with the rest of database modeling and data analytics in
the organization. Only by doing so may the marketing organization. The increasing
marketing begin to realize a strategic role of availability of Six Sigma marketing training
measurable value within the organization. will also help to provide marketing with the
skills to successfully shift its role to increase its
“
strategic importance within the organization.
From Tactical to
If marketing is only
Setting—and Supporting—Expectations.
Strategic Importance
Before positive performance improvement
Many people today still think of marketing
responsible for
can be achieved by marketing, both the
as research, communications and sales support.
expectations to be placed on marketing and
This is not the type of marketing department
communicating the value
the methods of measuring the fulfillment
that will fulfill the expectations of a Six Sigma
of those expectations must be defined. Only
organization. The function of marketing within
of a product to customers,
then can the marketing organization meet
organizations must expand beyond traditional,
the needs of the company and be viewed as
tactical roles. If marketing is only responsible
it is not operating at
adding value. For instance, rather than
for communicating the value of a product to
producing marketing materials that
customers, it is not operating at full potential
full potential and it will
communicate what the product team dictates,
and it will fail in producing the process
the marketing function must grow into
improvements that Six Sigma seeks.
fail in producing the
an organization that understands what the
customer values most, then help determine
Figure 2 shows the existing competencies of
“
process improvements
what price that customer is willing to pay.
a sample Six Sigma organization’s marketing
Marketers must ask how much it would cost
department, while Figure 3 shows the
that Six Sigma seeks.
to deliver that value. And finally, they must
expectations that the rest of that organization
help determine what the final product or
had of the same marketing department. This
innovation to be delivered to the customer
obvious lack of alignment, coupled with the
shall be.
absence of skill sets to fulfill expectations, must
inevitably lead to a painful failure of the
Too many times, it is engineers who define the
marketing organization. It is important to see
best product they believe they can offer to the
this as a failure to organize the right people
customer based upon what they are capable of
in the right roles.
creating—and who then determine the product
To expand marketing’s role, analytical and cost based upon what they think it would cost
process-oriented skill sets must be available to to manufacture it. Marketing is left trying to
marketing staff. That may mean restructuring create value for the customer and justify the
Sample Existing Sample Optimal Marketing Structure
Marketing
Structure • Provide • Conduct • Provide business • Help develop • Create
marketing competitive case and value value marketing
• Create research analysis, pricing analysis models propositions, communication
marketing analysis, cost (What are the understand tools to assist
• Understand
communication analysis benefits to our the Voice of sales force with
product features,
tools to assist customers in Customer and direct and
functionality • Determine
sales force with using our assist in pricing indirect sales
and customer market elasticity,
direct and products?) strategy for
values well plot product
indirect sales. products
enough to guide price vs. quality
new product by region and
development by segment
Figure 2 Figure 3
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cost. Great marketing begins with creating value • Which services will be outsourced and which
will be handled in-house?
for which the customer will be willing to pay.
• How does the data from one group dovetail
This gathering of “Voice of Customer” is one of
with the others?
the highest uses of the marketing function,
• What are the processes for evaluating that data
because it will lead to more relevant allocation
and turning it into actionable intelligence?
of resources. Yet few marketing groups are
These are all hard questions to answer for the
trained or prepared to handle this task.
typical marketer. A close alliance with the IT and
Developing—and documenting—data and finance groups will be crucial.
The Brand Value
decision-making processes. Marketing
Formula
executives must develop and support a major
Measure
IT competency in their organizations in order
Brand value =
to share information and integrate intelligence
Customer value = Marketing needs the right data to show that it
across different groups. They must be able to
Shareholder value is generating a measurable revenue stream. As
demonstrate proof of performance in marketing.
part of the process of identifying which data
Marketing’s value rests on
In order to do this, they must have the ability
should be measured and how it will be
its ability to create value
to report on “closed loop” processes. They need
measured, the CMO must, as described in the
for the organization. In this
standardized data so different products and
preceding section of this paper, seek alignment
quest, it is important to
functions within the organization look at the
both across the marketing groups and with
remember that brands and
same information in the same way.
customers, not products the other corporate functions. All of this
and services, generate constitutes, to put it mildly, an enormous task.
Marketing departments must gain an
long-term shareholder But ultimately, it amounts to figuring out what
understanding of what the rest of the
value. This is why it is so to measure, measuring it accordingly across
corporation expects of them, and especially
important for marketing to the enterprise and getting accurate results.
what the CEO needs, in order to help set
acquire the mindset and
overall expectations so that if they are met, the
skillset to go beyond
corporation will see positive business growth The Key Question:
playing a products/services
and success. Any disparity between desired
What to Measure?
sales support role.
functional capability and the ability to deliver
In its effort to begin measuring and improving
can be addressed by redefining the marketing
performance, marketing faces the challenge of
organization to have fewer boundaries,
defining which data exists, where it resides,
developing a collaborative culture that embraces
which data is needed, and how or if the data can
other functions in a defined way, and adding
be obtained. Across organizations, the quality
the skill sets and technology tools needed
and consistency of data usually varies. This can
to perform the tasks expected. A clear
make it difficult to assemble a baseline of past
understanding of and alignment on the
spending and performance across the enterprise,
processes that the marketing function will follow
because spending and performance have likely
must be in place. The processes by which
been measured differently, if at all. Marketers can
marketing will share information and collaborate
begin to address this by identifying appropriate
with other groups must be clearly defined.
metrics that relate to meeting goals for:
Once the marketing function has defined how
• revenue growth and gross margins
it can best serve the corporation, and once it
• customer lifetime value (CLV), profitability
has gained the strategic role and capability to
and cost
perform at that level, it is ready to develop
• brand awareness and perceived brand quality
and document the processes for handling data
• customer satisfaction
and making decisions.
• relative purchase frequency
• How will data be managed?
• acquisition rate and conversion rate
• How will data be shared so that collaboration
and efficiency are enhanced? Redefining the metrics. Traditional marketers
• What are the tools needed for doing this? have an abundance of metrics already. The
6

problem is that most of these are measures because a significant loss of customers
that relate to what the marketing effort can make a marketing campaign that gains
amounted to in cost or effort rather than actual new customers irrelevant.
results. When collected data is a ratio of cost
Long-term metrics represent a shift from
and effort to results, you have a greater degree
transactional marketing to relationship
of intelligence. The issue should not be what
marketing—in which the value of the customer
was paid for the marketing efforts themselves,
relationship is a more valuable metric than
but how those efforts contributed to achieving
the knowledge of a single transaction. This is
the overall company goals and to generating
a more complex metric to determine. There
new revenue.
is a valuable role for Six Sigma processes to
play in controlling the quality of the analysis.
ROI used to be the measurement every manager
It is that quality of analysis that will determine
wanted. However, this can be a relatively
the degree of real intelligence gained and
shortsighted way to view marketing progress,
ultimately affect the quality of the decisions
and other more enlightening views are
made to execute continuous improvement
emerging. In measuring ROI, a marketing
in marketing.
program is given a time window that defines
the start and finish of the effort. Measurement
The Importance—and the Difficulty—
takes place in this window, and this is what “
of the Benchmark
is reported as ROI for the program. Usually,
program results are reviewed quarterly.
Long-term metrics
If marketing is to be measured, there must be
This practice of program ROI measurement
past data against which to compare current and
misses opportunities. For instance, if the goal
represent a shift from
future activity. Given that there is frequently
of the marketing program is to acquire
not sufficient or reliably accurate data on past
customers, then the acquisition of a customer
transactional marketing to
activities and past results within marketing
has a greater overall value than the amount
organizations, creating a benchmark can be
of that customer’s first transaction, even though
relationship marketing—
difficult. The task of creating truly accurate
we may not see the payoff for acquiring a
and reliable data is exponentially more costly
customer for some time.
in which the value of the
than creating “approximate” data.
Short-term metrics versus long-term metrics. Therefore, unless there is a great deal of
customer relationship
By focusing on measuring the lifetime value discipline in the data recovery process, a Six
of a customer instead of the revenue gained Sigma-driven marketing team may begin
is a more valuable metric
from that customer’s first purchase, marketing with less-than-accurate data and thus produce
will get a better idea of the true return on measurements of dubious quality. In some
“
than the knowledge of a
the marketing effort that gained the customer. very large global organizations in which the
CLV metrics make it possible to determine marketing organizations are “siloed, there are
”
single transaction.
the maximum a company should be willing to few accurate and consistent records of exactly
pay for a customer, enabling marketing to what the enterprise has spent on marketing.
gauge its related costs in a more accurate and There is also no common understanding
forward-looking manner. of exactly what defines a marketing expenditure
for a group.
Another example of a long-term metric for
marketing to report is the defection rate Getting around these obstacles starts with asking
of customers. Given that a 5 percent increase some tough questions: Where do marketing
in customer retention can add as much as a costs stop and sales costs begin? Is the internal
25 percent increase to the bottom line, gauging dissemination of product knowledge to
defection is well worthwhile. Marketers must engineers, sales people and management
develop processes to measure it and define its considered the role of marketing or IT, or both?
cause. To borrow from Six Sigma terminology, Whose budgets should bear the load of the
what is the defect in the customer experience new, more subtle forms of marketing that bleed
that results in defection? It is important across an organization, or the costs of research
7

to understand the Voice of Customer (research across the organization; and developed methods
that will ultimately benefit research & development, to share the measurement data, he or she will
marketing and sales)? If data is also segregated have a good start towards developing the
into purchase information, billing information, fodder for analysis that is needed to begin to
customer service data and other function-driven improve processes.
buckets, there may be nomenclature issues to be
addressed so that definitions of what is being
“ Analyze
measured can be made consistent and useful to all.
Simply measuring performance will not
Unfortunately, many Get at the benchmark basics. The most
improve it. Increased marketing effectiveness
basic requirements for setting a benchmark and
comes from the generation of insight that
marketers, even within enhancing the overall ability to measure are:
leads to actionable intelligence. Having insight
into what works and what doesn’t work can
• a database of past marketing and purchase
Six Sigma organizations,
mean that expensive mistakes are not repeated
activity, which will facilitate the calculation
of CLV and painful lessons are not relearned.
are still using their
• data that provides the ability to segment
customers and prospects according to
instincts to guide major Toward Quantifiable Insights and
customer needs and purchase patterns
Understanding
• key drivers of brand equity, the value
decisions such as those
A profound understanding of the customer
of current brand equity and the value of
and the customer’s needs will lead to new
relationship equity (this data can be
relating to positioning and
business-building ideas that improve the ability
gained through research and calculations)
to achieve company goals. Gaining such
• benchmark against competitors
“
targeting. This is a Zero
understanding requires aligning the goals of the
These are all things that can be known. They enterprise organization-wide. To reiterate the
Sigma practice. may not be easy to attain, given the tough lessons of preceding sections of this paper,
questions outlined in the preceding section, companies can no longer afford for research to
but it can—and must—be done. operate apart from marketing, or for branding
to operate its own independent silo. Intelligence
Live by the integrity of the data. Excellent
and data must be easily available for everyone
marketing demands excellent product positioning
to access. Having a solid process in place
and customer targeting. One of the dangers
along with the tools to evaluate results will
lurking in marketing organizations today is the
make this achievable. Then insights will no
marketer’s “gut knowledge” of what is true for
longer be merely “hunches. ”
the customer, who the targets are, what they will
respond to and so forth. Unfortunately, many Careful analysis of marketing performance,
marketers, even within Six Sigma organizations, inspired by Six Sigma processes, allows the
are still using their instincts to guide major company to address many difficult, but
decisions such as those relating to positioning necessary, questions:
and targeting. This is a Zero Sigma practice.
• Which customers purchased before and have
When a marketing group “knows” who its best
not purchased again? Why? Which continue to
potential customers are, what they respond to
buy, and why?
and what types of media opportunities are the
• At what point are leads lost? When do they fail
most efficient to reach them, without current
to progress to the next sales level and why?
measurement through research processes, that
• What are the true “lost opportunity
is a problem that must be addressed.
costs” incurred as a result of less effective
marketing efforts?
After the marketer has defined what will be
measured to show progress towards a common • Where are the “defects” in the marketing
goal; cleansed the existing data so that there processes that result in lost sales, wrong
is a uniform, true picture of past performance; prospects targeted and customers treated
inappropriately?
created consistent measurement processes
8

Formal cross-functional processes and
• Where does “variability” occur in qualification
criteria for prospects, follow-up, pricing, agreements addressing how and when data
contract negotiation and service? will be analyzed are critical to the timely
assessment and response to data. When data
• How do we distinguish between productive
is processed into dashboards, groups can view
and non-productive activities?
tests to help identify the extent of improvement
The difference between true analytics and needed in each function to achieve the target
the simple reporting of results is the ability to results. More insightful cause-and-effect
identify and answer crucial questions whose scenarios can be developed, risk analysis
answers will lead to insight, process changes can benefit all teams and statistical inferences
and increased success. can enlighten beyond just the topic at hand.
Learning from past performance. Often, the
greatest insights come from observing poor Improve
performance, then making efforts to improve that
The main benefit of measuring marketing
performance over time. These lessons are
programs and processes is the ability to garner
an expensive form of education. In one sense,
actionable intelligence which can be used to
they become an asset belonging to the
optimize, or improve, performance and
corporation. However, each insight and lesson
processes. As data is analyzed and insights
comes with a price. The key is to learn the
are generated, possibilities for improvement are
lesson once and share the insight so that the
presented for many areas. Aside from
corporation doesn’t have to continue to pay for
improvements in the implementation of
each individual or group to learn it over and over.
marketing programs, there can always be
This approach of learning the lesson once improvements in tools, technology, processes
makes the argument for a corporate memory and skills.
bank, if you will—a record of best practices
“
and brand history, in the form of a marketing Change is Good
knowledge database—that is easily shared
The main benefit of
An agile marketing organization will embrace
throughout the organization to provide a shared
opportunities for improvement, even when they
institutional history of lessons learned. If,
measuring marketing
are disruptive to individual work groups (as
instead, the intelligence gained through analysis
they almost always will be) and even though
is scattered across the corporation, and hidden
programs and processes
they may be more expensive than business as
in the memories of current and former
usual. As analytic insights challenge marketing’s
employees, it will inevitably be lost and have
is the ability to garner
original “Plan A, the staff members who are
”
to be regained at great cost. As new staff is
flexible, open to new ways of approaching
added they should be able to access existing
actionable intelligence
problems and eager to try the next idea will
historical analysis through the marketing
quickly rise to the top as the most valuable.
knowledge database and build upon that
which can be used
information, rather than learn old lessons again. To realize true improvements in marketing
process, as new ideas are implemented, testing
Leveraging collaboration. The process for to optimize, or improve,
should be utilized to gauge their value, along
analyzing marketing performance within global
with modeling of different scenarios. When
“
organizations must be collaborative in order performance and
approached methodically, marketing tactics can
to ensure objectivity and accuracy, as well as to
be vastly improved on many fronts. Following
realize the full benefit of the data collected. processes.
are a few simple examples of how performance
The conversations that arise when marketing,
can be measured and marketing efforts improved.
sales, product development, finance and IT
gather to analyze data are infinitely more Customer perceptions (Voice of Customer)
productive for the organization than if only regarding brand, product benefits, pricing,
marketing was to assess it. Each function customer satisfaction and a number or other
can help the others to be more successful in qualities can be measured through survey or
this collaborative arrangement. focus group research. If you understand current
9

perceptions, and you also know what you would Targeting efficiency should be studied to
like future perceptions to be, that makes it understand which potential targets will make
much easier to achieve improvement. Messaging the best customers. How many of these
can be improved to make the marketing customers are there? What are they willing to
program more relevant or persuasive, or delivery pay for your product or service? How easy
mechanisms can be improved for more frequent is it to sell to them? Drastic improvements in
or noticeable exposure to the messaging. (If, marketing results can be seen through
for example, surveys show that your target does increases in targeting efficiency.
not respond to email, the program can be
These are just a few of many methods
improved by simply finding ways other than
“ available for improving marketing
email to communicate with the target.)
performance. Keep in mind that it may be
Controls should be Efficiency can be measured by tracking the necessary to iterate through the Measure-
number of responses to a marketing program Analyze-Improve steps until the optimal
implemented so that best within a given period of time. For instance, level of performance is achieved.
if a direct mail program is implemented to
practices are followed promote a product by driving the recipient to a
Control
Website for the purchase, it is quite easy to
“
and improved upon, rather measure the percentage of recipients who went When improvements are achieved, it is
to the Website, and whether or not they important to recognize and codify the
than reinvented. purchased once they were there. The higher the best practices that led to them. Best practices
ratio of purchasers to recipients, the more should be made available via the marketing
efficient the program is in getting the desired knowledge database or other appropriate
response. To improve such a program, method to everyone in the organization.
the marketer might try a number of tactics to Controls should be implemented so that best
increase the purchase percentage, such as: practices are followed and improved upon,
rather than reinvented. When improvements to
• offer development: communicating an
best practices are attempted, they should be
incentive to the targets to help motivate them
documented and analyzed formally to
to respond
understand why the improvement either did
• target refinement: altering the list of
or did not work out. The goal is to continue to
prospects so that those targeted are more
improve upon best practices so that
likely to respond in the desired way
performance gets better over time.
• message refinement: creating a more relevant,
compelling message for the target
The Necessity—and Challenge—
Customer Lifetime Value can be measured to
of Control
determine the maximum a marketer should
be willing to spend to acquire a new customer. Marketing departments often have a difficult
Once this is known, improvements in budget time maintaining a high level of control over
allocations can be made to increase marketing marketing activities and the best practices
efficiency. Perhaps more funding should be associated with it—to a great extent because
allocated to meet marketing goals, for example. there is no one person with this responsibility
Knowing the CLV will help determine where in the organization. Neither the CMO nor
the cut-off point should be for marketing spending traditional roles such as traffic manager or
to achieve desired results. Or, if marketing marketing director can possibly monitor and
spending is already high in relation to what is control all best practices down to the level of
known about the CLV, improvements will individual staff in each marketing group. Global
have to come from changes in some other corporations find it difficult enough just to
aspect of the program. control the use of the brand attributes, with
10

be able to make much better decisions in
marketers in different silos frequently giving
support of marketing’s overall goals. A
in to the temptation to tweak them to better
disciplined control of spending that allocates
suit their needs. But as brands become diluted
funds towards the most strategically important
through lack of standards control, the overall
efforts, and that carefully manages vendors
success of marketing execution will suffer.
and outside costs, can create significant
Assigning responsibility and imposing
savings for any company.
discipline. To ensure control over standards
The role of control within a marketing
and practices, new roles in global marketing
organization should also include the
organizations must be developed. These roles
implementation of preventative activities. Risks
must address the responsibility of ensuring
inherent in marketing activities should be
that the knowledge gained through process
evaluated on an ongoing basis, and scenarios
improvement is utilized and that true efficiencies
should be developed to address how the
are garnered until a real improvement is
corporation will deal with them, should they
achieved. This runs counter to the cultures of
occur. This helps the organization understand
many marketing organizations in which people
what parts of a process should be subject
have joined the field because they want to
to increased control in order to minimize risk
utilize their innate creativity. But the key is
and also to create a timelier response in the
to channel that creativity to areas where it will
“
event of a crisis.
be productive, and to place clearly defined
limits on which parts of marketing programs are
The marketing
The addition of control will present the greatest
open for new interpretations.
cultural shift for most marketing organizations.
organization of the future
For some, it will change many aspects of
Another aspect of assigning responsibility
the work process, and some people will not find
and imposing discipline is the need to establish
will be one that can
this pleasant. However, without controls in
processes and to make sure people adhere to
place it makes no sense to follow Six Sigma
them. Formal training that imbues everyone in
prove that its activities
processes through the other areas of marketing.
the organization with appropriate skills and
As a company shifts towards operating with
fosters in them a solid understanding of the
“
yield a measurable
Six Sigma principles in place, the control
importance of the company’s accepted
function is one that can be outsourced if needed
processes falls under the category of control.
value to the company.
to usher marketing into new ways of defining
This goes back to the concept of enterprise-
and improving what it does, for the good of the
wide alignment. The entire team must have
entire enterprise.
a true understanding and appreciation of what
the marketing department is trying to
accomplish and how its processes support that
The New Marketing
goal. Training on the importance of data, how
Organization
to understand data and why the organization
should trust the numbers is also important for
The marketing organization of the future will
anyone whose role includes marketing—which,
be one that can prove that its activities yield a
as noted earlier, is practically everyone in the
measurable value to the company. Toward
organization whose role touches the customer
this end, marketing organizations must reinvent
in any way.
themselves to become more aligned with
Control as a function of risk reduction. overall company goals and more data-driven in
The control function of a marketing department the pursuit of real improvement. The five
can create objectivity in the way marketing principles of Six Sigma methodology—Define,
dollars are spent, reducing the company’s Measure, Analyze, Improve and Control—serve
financial risk. When programs are analyzed and as an extremely useful context for marketing’s
assessed for their effectiveness, the CMO will efforts in this regard.
11

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