Your Marketing Process Must Address Every Step

Your Marketing Process Must Address Every Step

Six Sigma is about process control. It is not about stifling creativity, but facilitating and channeling it effectively.

Almost all marketing functions involve processes intended to influence a purchase decision. Let’s explore a common marketing communications channel – product packaging.

Most marketers of retail products consider packaging to be an integral part of the marketing arsenal. Bringing that packaging to life on a shelf requires a process. Here are some of the elements:

Graphics design. The package usually must conform to some overall guidelines that preserve and promote the brand identity, perhaps including color, font, etc.

Packaging specifications. The package must survive shipment and still look good on the shelf.

Product features and benefits. Most packaging will list the product selling points in a manner consistent with the brand and company messages.

Labeling. Labeling requirements may include weight, UPC codes, certificate of origin, etc. Food packaging may require a nutrition disclosure label.

While this is only a brief listing of elements involved in a retail package, it helps to illustrate the many processes and sub-processes involved.

Each of the processes above presents a chance for error.

One simple example involves the bar code. I was involved with a new product for one of the largest retailers in the world. We checked that the code numbers printed directly below the actual vertical bar codes on the packaging were correct. However, we did not use a scanning device to see if the numbers matched the bar code itself.

In fact, the bar codes did not match the numbers – incurring a large cost to re-mark the packages.

This is a good example of what can go wrong when a process does not undergo Six Sigma scrutiny to ensure quality. We should have started with the most basic of all Six Sigma mantras – understanding the process and all of the elements that constitute its successful conclusion. In this case, a strong understanding of the bar code development process would have helped avoid the costly redesign.

Build an “Improvement Loop” into Your Programs

Build an “Improvement Loop” into Your Programs

“Process Improvement” is a fancy way of saying that we want to continue to achieve better and better results from our efforts.

Experience is a great teacher – but only if we listen. To assure that we listen, Six Sigma provides us with an “Improvement Loop” called DMAIC, which stands for:

-       Design

      Measure

-       Analyze

-       Improve

-       Control

Follow this simple process, and you are guaranteed to continue improving your programs and your results. Let’s explore each of these in more detail.

Define. If we want to assess our results, we first must identify what we are trying to achieve. This is the essence of the Define stage.

Perhaps unexpectedly, this can be painfully difficult. Marketers may be uncertain of how to quantify the desired end result, or commit to finite goals.

Do we want improved customer satisfaction? Higher unaided recall of the product or brand? More traffic to the homepage?

The better you define your goals, the easier it will be to achieve them!

Measure. Now we can begin measuring how well each goal is being met. This begins with base-lining, or measuring how well the goal was met previously. This is the only way to know if your program improves the result.

“Measures” may include physical counts, research analytics, surveys, simple and/or complex observations, etc.

Analyze. Measurements usually consist of raw data. The Analyze stage converts this into relevant information to determine how well we performed against goals.

Improve. In the Improve stage, we test tactics (often referred to as Designs of Experiments, or DOEs) to determine if holding certain program elements constant while varying others will improve performance. Adjustments are based on data analysis.

Control. Once gains are made, we want to ensure we don’t slide backward, by monitoring key metrics and establishing reports that alert us to any drop in performance.

With controls in place, we can refine our goals in the Define stage, and start the loop again.

Volumes have been written on each of these stages. At this point, it is sufficient to understand that our process seeks continual improvement toward defined goals using measurement, analytics, improvement techniques and control reports. This process has broad applicability across many segments of business.

The Six Sigma Story – Quality Actually Costs Less

The Six Sigma Story – Quality Actually Costs Less

“…our quality stinks!”

–      Motorola executive Art Sundry

We have talked a lot about the application of Six Sigma to Marketing. This is a good time to take a step back and consider the origins of Six Sigma, and how this contributes to its value as a Marketing manager’s power tool.

Six Sigma was developed at Motorola in the mid-1980s as a way to improve manufacturing quality.

At a time when most American companies believed that quality cost money, Motorola realized that done right, quality improvements would actually reduce costs.  At the time, the company was spending as much as 20 percent, or $800 million to $900 million annually, correcting errors.

An engineer, Bill Smith, had studied the correlation between the field life of a product and how often that product was repaired during manufacturing.  He concluded that a defective product that was fixed during manufacturing was almost certain to have other defects that were missed until it was in the hands of the customer.

He also concluded that when the product was manufactured error-free, it rarely failed afterward. Once the company realized that its foreign competitors were making error-free products, Motorola began its quest to improve quality in earnest.

This led to the development of Six Sigma, which focused on the use of measurements to anticipate problem areas, not just react to them.  In other words, Six Sigma would allow business leaders to be proactive rather than reactive.

Motorola’s new standard became defects per million opportunities. Previously, the standard was defects per thousand opportunities.

Proof of its value materialized when Motorola applied Six Sigma to its Bandit pager, which hit the marketplace with a life expectancy of 150 years. 

Within four years, Six Sigma saved the company $2.2 billion.  From there, Six Sigma spread like wildfire to other industries – and beyond the realm of manufacturing.

The potential to improve results and eliminate wasted effort in Marketing makes Six Sigma a must-have for decision-makers.

Rationalization Optimizes the Marketing Mix

Rationalization Optimizes the Marketing Mix

With controls in place, the Marketing team can work toward optimizing its mix of programs to produce the best results.

The top performers may be worthy of additional resources. Your short-term metrics will quickly tell if those additional investments are justified.

Oftentimes the more difficult task is to eliminate or rationalize programs that are not producing sufficient return on your investments.

We have seen companies become wedded to programs or themes that have outlived their usefulness. Only by honestly reviewing impartial metrics can Marketing managers guide the decisions that must be made.

Once again, Six Sigma processes provide the necessary tools. Comparing Z scores will quickly identify those that are lagging.

At this point, the first step should be an honest evaluation of whether simply changing tactics could bring them into compliance.

For example, if a program hits the right general demographic but generates low returns mainly because it reaches too few potential consumers, could simply switching to different media channels change the outcome?

Decisions will be based upon many factors in addition to ROI and Z scores.  Other common discriminators include overall cost, long-term commitments, management affinity, segment coverage requirements, goal coverage, and the use of financial tools such as net present value, internal rate of return, and payback period. 

I recommend starting with these five important questions:

1. What business goal(s) does the program seek to affect?
2. What business goal(s) could the program affect (if optimized)?
3. How do you know the goal is being affected – how do you know you are being successful?
4. How do you measure the long term performance of achieving the goal?
5. How do you measure the short term (in-process) achievement of the goal?

Rationalization of this type will reduce waste and increase the return on investment.  This result alone often pays for the investment in the Six Sigma management process.

Set ‘trigger points’ to control your results

Set ‘trigger points’ to control your results

Controlled Investments represent the apex of the Six Sigma Marketing hierarchy.  Once we have rationalized and improved investments to create the ideal marketing mix, we must maintain this new level of return.

Controlling a process means setting up reporting limits to signal when those investments are going “out of control.”   Out of control means a process is yielding results that are not within the expected range. In other words, you’re not getting the results you want and expect.

This is normally a process of management by exception rather than active analysis.  In other words, we don’t necessarily need to know that the process is in control – we expect that.  Instead, we only want to know when the process has crossed the boundaries of acceptable levels.

This information is critical to the management process so that we are clearly alerted to take action to maintain our hard-fought gains when necessary. 

In order to report more completely on a group of activities, we may use a “dashboard.”  Just as a car dashboard gives a driver data on how the car is performing, the marketing “dashboard” reports important data on our marketing programs.