When a $1 billion European business pondered the need for a multi-million dollar CRM system and if its sales force would really use the system, an executive put the company on the right course by suggesting Six Sigma could help find the answers.

By Steve Crom

When the division president of a $1 billion European business was confronted with the cost of implementing a new customer relationship management (CRM) system, he asked: “What is the business case for implementing a CRM system that costs millions? How can I be sure that when it is in place, that salespeople will really use it?”

Key questions. But the business began moving on the right track when the vice president of information management wondered if Six Sigma could help answer the questions.

Explaining Performance Gaps

In this business, as in most, 5 percent of the sales force consistently out-performed the rest. They were selling the same products, in comparable markets, following the same pricing policies. If the objective of a CRM system is to help improve performance, why not use the Six Sigma DMAIC approach to understand what accounts for the positive deviants and make their strategies accessible to the rest? The idea was that during the course of the project it would become evident whether automating parts or all of the sales process was warranted.

Organizing the Six Sigma Effort

Green Belt projects were chartered, each covering the three central processes of the full sales cycle:

The questions to answer were:

• Which accounts should the sales representative visit?
• Where should the sales representative spend his/her time?
• What are the biggest opportunities per account?
• Who are the key stakeholders in each account?
• How should a sales representative’s time be divided across opportunities?
• How should the sales representative plan and conduct his/her interactions with key stakeholders?

The goal was to apply DMAIC to answer each of the above questions, without assuming that information technology would be part of the solution.

Discovering Common Information Needs

Working in parallel and reviewing progress between the sales process teams, the Six Sigma teams discovered that each process needed the same information, even though they were working on different time horizons. Territory planning is done on an annual cycle, account planning quarterly and sales call planning on a weekly and/or daily basis. However, the inputs for each process is account specific:

• What is the potential by account?
• How much of that potential does the business already have?
• What is the profile of each stakeholder by account?
• What interaction has the business had with each stakeholder?
• How do those interactions relate to the sales cycle?
• How can the opportunities be broken down into sales projects with specific, measurable objectives?
• What is the best way to schedule those projects across accounts in a given territory?
• How can the business measure progress and take corrective action as needed?

Rather than each team developing its own data capture and reporting system separately, the team leaders recommended that an integrated sales process be supported by a common system and database. The contribution of Six Sigma was to provide a customer-focused approach through which the sales representatives (the customers, in this case) would discover for themselves the need for a more systematic, structured approach to selling. This is the answer to the question of how to ensure that a new system, once developed, will be used.

Common Terms and Language

Having been through the DMAIC process, each team had clear operational definitions of the inputs, processes and outputs they needed. Every manager will agree that clear system specifications are among the most difficult challenges in developing any system, including CRM. The Six Sigma approach gave everyone a common language. This is especially important in bringing together sales people from nine countries across Europe. Particularly helpful were the establishment of:

• The business case for improving each sales process
• The definition of a defect
• Operational definitions for inputs and outputs
• CTQ breakdown trees
• Process yield
• Process maps

The use of statistics led to new ways of segmenting accounts by stakeholders rather than by product or geographic lines which, up to that point, had been the conventional wisdom.

The Business Case

By using a Six Sigma approach, the business case was made on improving sales processes rather than on implementing new technology. Each of the sales process projects quantified the expected benefit of the new processes they designed and piloted. By focusing on behaviors and practices first and foremost, and enabling technologies second, this pan-European company started to see benefits long before the technology was implemented.

The key opinion leaders picked to be involved in these sales Green Belt projects convinced their peers of the benefits of the new processes. After all, the new processes were designed with their input. This started the process of convergence toward common processes across the nine countries involved. This was a huge benefit during the CRM implementation as key opinion leaders saw the benefits of common “best practice” processes. Without Six Sigma, the idea of standard processes would have been a show stopper for any CRM effort.

Conclusion: Points Worth Emphasis

Improving sales processes through Six Sigma is a powerful precursor to any CRM effort. Points worth emphasis are:

• Pick key opinion leaders to lead defined sub-processes that make up the overall sales cycle.
• Use DMAIC to give them insights into how selling takes place today.
• Let them discover the commonalities across European markets that on the surface appear very different.
• Insist on clear definitions of the qualitative aspects of selling.
• Use the notion of sales projects to measure effectiveness.
• Educate the key users to design for their own benefit common processes that can work regionally.
• If warranted, automate the processes once they have been optimized and standardized.

The result is both a clear business case based on process-related performance measures and reduced CRM implementation costs due to more standardized processes and clear specifications. Most importantly, Six Sigma puts the salespeople rather than the information management executives in charge of what everyone will argue has to be a business effort to succeed.

About the Author: Steve Crom is the managing partner of Valeocon Management Consulting. He has more than 20 years of experience helping clients achieve breakthrough results. Mr. Crom has worked with clients such as Johnson & Johnson, Zurich Financial Services, Airbus, Siemens and many other Fortune 1000 companies. Based in Germany, he is fluent in English, German and French. He can be reached at [email protected].