Six Sigma Returns to CRM
During the height of Six Sigma's popularity some subject experts said that what it could do for the shop floor it could do just as well in the sales office. As the economy contracted, the dialogue about using this statistical business improvement methodology for CRM initiatives largely disappeared.
Now it's back, and its proponents say the idea is more relevant than ever. "What it has taken people time to really grasp is that CRM is a process," says David Silverstein, president of Breakthrough Management Group. "If your goal is to increase your win rate with customers, that's a process. Once you define your objectives, Six Sigma applies. A good CRM system will really help with the data collection and analysis."
According to Michael Webb, president of Sales Performance Consultants, companies are applying Six Sigma to sales and marketing processes, looking for those characteristics of an opportunity that have the greatest chance of success, or those leads that show the hallmarks of quality. Some engage the discipline to provide statistical reinforcement when driving customer price increases from planning through to execution, showing where customer pushback is actually less damaging than the field fears, driving up net profits. "[Six Sigma] should be able to say what kind of customer needs the product or service I offer," he says.
But Six Sigma doesn't always work out as planned. "There have been vaunted Six Sigma consulting teams brought into sales departments and a few months later had to be asked to leave because they were doing more damage than good," Webb says. The solution, he says, is to remold the analysis and process improvement that accompanies Six Sigma into the revenue and benefit structures that sales and marketing are accustomed to working with. "The only way you can influence [sales and marketing] is to do something that's in their interest," he says. "You have to create value for the customer."
Much of the statistical groundwork is already in place, and much of the analysis already being performed at companies with aggressive CRM strategies, whether or not they call it Six Sigma. "It's not about getting to a defect level where you are winning 99.99 percent of your deals, it's about increasing the probability of winning," Silverstein says. "People get a little too hung up on Six Sigma's origins. A good CRM strategist would already be doing many of these things."
CRM author and strategist Dick Lee says that despite the new attitudes, Six Sigma remains a poor fit for the front office. "In Six Sigma the thrust is to eliminate every possible deviation from the norm. If you try to do that in a call center, you're going to abuse the daylights out of the people calling," he says. While he agrees that many of the statistical principles employed by the Six Sigma/CRM advocates are valid and already in use, he believes the brand is being extended beyond its true meaning simply because it carries weight. "[Six Sigma consultants] are running out of manufacturing engagements, and they're selling the cachet even though the methodology doesn't work in the front office."
Six Sigma experts will not be dissuaded. "Manufacturing people for the past twenty to thirty years have been in an environment of continuous improvement, they know it's a better way. For sales and marketing, continuous improvement hasn't been a focus at all," Silverstein says. "Once sales and marketing people understand that it's all about processes, applying Six Sigma to sales and marketing becomes natural."
Six Sigma: What Went Wrong?
A 60 percent failure rate suggests that process change requires behavior change.