1. AIM Consulting, LLC
Applying Six Sigma to Sales
All work is a process, including the
Improving Sales
sales function. Sales is more than
bringing together buyers and sellers
and hoping for magic. Sales is a
thru
structured process. Many successful
sales organizations have proven that
following a structured process
Six Sigma
increases sales.
A Gartner Group study found that
“… sales organizations that
Execution
continually improve sales processes
have a 25% greater chance of
achieving their sales objectives than
competitors that leave sales process
to chance.”
“Sales organizations that continually
Want to increase sales and profits? • Missed time windows improve sales processes have a 25%
Want to capture market share? How • Invoice errors greater chance of achieving their
can you challenge a sales organization • Damaged product sales objectives than competitors that
to simultaneously increase sales and • Out of code product leave sales process to chance.”
reduce costs? The answers may be • Incorrectly loaded trucks Gartner Group
found in the tools of Six Sigma (σ). • Out of stocks (at retail, in vending,
in the warehouse, etc.) Six Sigma builds on that philosophy
What is Six Sigma? • Shelf arrangement does not match
plan-o-gram
by adding an understanding of
customer requirements and the
Six Sigma is a process improvement • Equipment in need of repair measurement and continuous
methodology with roots in manufacturing. • A/R past due dates improvement of all aspects of the
Companies like Motorola and GE • Customer complaints sales-service chain.
popularized the approach with their • Lack of coordination and Necessary ingredients to increase
breakthrough results—saving literally communication between sales, sales force effectiveness are:
billions of dollars. The Six Sigma delivery, merchandising, and
approach focuses on consistent error-free support personnel 1. Understanding Customer
performance. The objective is to • Lack of understanding of how sales Requirements. What do customers
maximize customer satisfaction and contribute to the customer’s overall want? It’s simple. They want
minimize costs associated with errors and business objectives consistent product and service
rework, thus increasing overall sales and quality, error-free performance, and
These are just a few of the many help in meeting their business
profits. Six Sigma utilizes the basic tools
“errors” in a sales organization that objectives. If this sounds basic, it is.
of quality and advanced statistics.
cause customer dissatisfaction, Yet few sales organizations focus
Many managers ask, “What does this have contribute to lost sales, and increase their people, processes, and
to do with a sales and service the cost of doing business. measures on identifying and
organization?” Consider the potential satisfying customer needs.
errors and waste in a sales and service
system:

2. Improving Sales through Six Sigma Execution Page 2
Six Sigma starts with identifying Active direction and support by
these needs and developing structured
What’s the bottom-line potential the senior leaders. Without this, do
processes and measures to ensure for Six Sigma in a DSD not proceed. Leaders are needed to
consistent delivery of those organization? set high performance expectations
requirements. Let’s look at one area. Data from and to remove barriers that may
Progressive Grocer and an ECR exist in existing ways of thinking.
2. Structured processes. Many
organizations do not understand their Best Practices Report suggest that Project selection. Pick projects that
sales process. Many confuse sales 27% of an average supermarket’s will make a difference. Focus
training programs that teach skills sales are DSD, yet 90% of a chain efforts on processes that impact the
with understanding customer needs, retailer’s invoices are from DSD customer vs. isolated cost
presenting benefits, and handling organizations. All these deliveries reductions.
objections within the steps of sales and invoices cost the retailer and the
DSD organization money and Training. Employees must be
and sales management processes. trained on process improvement and
Six Sigma requires development introduce the potential for
errors…invoice errors, delivery other quality tools. Selected
and implementation of structured individuals must acquire Black Belt
processes for every aspect of errors, etc. Many DSD companies
have implemented hand-helds to and Green Belt skills to apply the
customer needs: statistical tools to analyze and
automate the check-in and invoice
• Document all sales and service processes, eliminating many errors. improve operations.
processes. Remove non-value But just layering technologies on top Employee involvement and
added steps and rework. of existing processes does not reward/recognition. Employees
• Document and improve all produce dramatic operational must share in rewards for their
supporting processes. Invoice improvements. The Design for Six contributions to bottom-line results.
development, truck loading, Sigma methodology and tools can
address these problems. By Flawless execution and control.
merchandising, etc. A fundamental of Six Sigma is
understanding the needs of the
3. Metrics. Currently, most sales customer and developing structured error-free performance. All
organizations only measure results— processes that meet those needs improvements must be “locked-in.”
actual sales. If the goal is to minimize while minimizing costs and Many organizations are successful
errors, managers have to measure and eliminating errors and rework, the at identifying improvements, but a
track performance against standards. entire value-chain realizes lack of discipline often returns their
There’s an old saying, “You get what improvements. These improvement performance to previous levels. Six
you measure.” Measurement creates equate to bottom-line results due to Sigma organizations are able to
focus. sales increases, cost savings, and lock-in the performance gains and
enhanced customer relations. continue to increase performance.
Six Sigma sales organizations
measure and improve the consistent The key question is…what would
execution of their processes. What changes like this and others be The tools of Six Sigma are not
does that mean in sales and delivery worth to your retailers and to your limited to manufacturing. Sales,
operations? It means measuring and bottom-line? Six Sigma service, and administrative
reducing or eliminating the errors in a breakthrough results come from processes can benefit from a
sales organization. challenging existing methods and systematic process that sets high
4. Control. One of the most designing processes that deliver expectations for improving
important principles of Six Sigma is results. customer satisfaction and bottom-
that of predictability or control. To line results. Competitive advantage
minimize costs and increase retailer can be created today by utilizing the
tools of Six Sigma.
satisfaction and sales, a sales
organization must deliver consistent
What’s required to implement
Six Sigma?
product quality and consistent service
excellence. Only through a defined There are important lessons to be
process, tracking and measuring, and learned from successful Six Sigma
continuous improvement can those organizations. Requirements
goals be achieved. include: