Marketing Deep-Thinking, Part II

Dec 2, 2009

The idea behind a Six Sigma approach to marketing and improving your business strategies is that a company, small or large, understands its needs both internally and externally, and what it represents.

Improvement starts with communication, a thought process and mapping a strategy to strengthen your company’s abilities. This two-part series is written to enable you to take the first steps toward an improvedfinancial aftermarket business strategy.

Increased Satisfaction

The remarkable thing about Six Sigma is its ability to increase satisfaction for a number of different stakeholders in the business, including customers, employees, management and owners.

In an aftermarket business setting, you can establish your strengths and weaknesses within your marketing approach by reviewing your methods of presenting your company, its image, your verbal communication message, as well as your sales training process. There is no perfect rose garden, but there can be fast laps to improvement through the internal understanding of your needs base and how it affects both the internal and external process of marketing.

Therefore, the answer to the question, “What are your needs and what are my needs?” is ultimately the improvement of some business process, which then results in meeting the needs of one or more stakeholders. This is the bread-and-butter of Six Sigma.

Inevitably, the question arises, should Six Sigma projects focus on achieving benefits directly for your business, or on achieving benefits directly for the customer? While the answer depends on circumstances, any improvement to a business process usually benefits both the business and its customers.

For example, if you produce a hard product that has defects, customers will ultimately be unsatisfied, no matter how many times you inspect the products before shipment. This is because inspections are not perfect, and some percentage of the defective product will find its way to the customer.

If you do a Six Sigma project to improve product yield, it will have a positive impact by reducing inspection, rework, scrap, inventory and other associated costs. It will also have a positive customer impact, as the probability of shipping defects is reduced, cycle time is reduced, cost is reduced and the predictability of delivery is increased.

In the process, your marketing improves as well as your customer relationships.

This is where the notion of improving your needs and my needs comes into play. You’re improving not only your personal indicators to success, but each tier of development as well, which in turn produces a streamlined manufacturing, marketing and management process internally and externally.

Isn’t it obvious that it’s always good from the customer’s perspective to improve any process of the business? The real questions are, “Where is the urgency, where is the pain, and which problem should be solved first?” It’s not a question of whether a project benefits the business or benefits the customer. It’s simply identifying the most pressing operational problems, and fixing them once and for all.

Final Fixes

Six Sigma is an enterprise-wide strategy that recognizes problem areas within your business, defines improvement efforts and projects, and determines and implements data-driven breakthrough level solutions.

This translates to a predictable and repeatable way to improve business results that are then sustainable. After all, isn’t that what every aftermarket business truly wants?

To obtain the maximum benefit from Six Sigma marketing, you must link Six Sigma with the strategic needs of your business, whether it is manufacturing, services or supply chain management.

A tip is for the business to define sets of key goals and objectives for accomplishing the vision and operations plan. When you achieve these key goals and objectives, then you will have a clear strategy to solve critical problems by identifying the need to fix items causing disruption, harm or indecision in your manufacturing, parts distribution or aftermarket service business.

You’ll want to keep the following outline of goals and objectives in mind when you select your business improvement project utilizing the Six Sigma approach. The three major areas of concern in applying your personal situation to a Six Sigma attack and fix for improving your business are the Objective, Phase-in and Output.

The Objective Process: Under the Objective process you’ll want to link Six Sigma to your personal business priorities, work to achieve breakthrough improvement by understanding your needs, and that of your stakeholders, and then integrate into day-to-day business patterns the solution to the problem by streamlining your personal business framework.

The Phase-in Process: Within the Phase-in process you’ll benefit by understanding how each element of the Phase impacts your business and its attributes pro or con. Think and reflect by taking notes on the following: Recognize, Define, Measure, Analyze, Improve, Control and Realize. Determine how these individual strategies line up with your current business plan, strategies for growth and marketing process. Also, ask how the terms work within your personnel rank and file, and ultimately how your customers can further benefit from you doing your business homework.

The Output Process: Finally, reflect on the Output process. By projecting identification and launching timelines and processes, you’ll have solutions to the problem and be able to construct a written report. I highly recommend you apply a written validation to your findings and thus earmark a roadmap to continued improvement. The obvious then becomes apparent through implementation and financial benefits.

This is a breakthrough strategy that includes a Recognize step in the beginning and a Realize step at the end as part of the Phase-in process. The overall strategy is to find areas of your aftermarket business that are in need of improvement to meet your business goals—the Recognize aspect of the strategy.

This leads you to determine the problems you need to solve to improve the problem areas and thus Define projects. You can then determine a solution to your problem, implement the solution and obtain the subsequent benefits of your labor.

The Starting Line Approach

Start by assessing the higher level needs of your business using any knowledge obtained from the voice of the customer and the voice of the business.

The voice of the customer includes the needs and expectations your customers have for your products and services. The voice of the business represents all the needs and expectations of the business.

The idea is to assess both areas to identify your business, personal and personnel gaps-the areas where the expectations of the business and expectations of the customer are misaligned.

You may want to review the following as starter points of consideration:

  • Product returns or warranty costs
  • Customer complaints
  • Accounts receivable and invoicing issues
  • Cycle time or responsiveness
  • Ineffective or defective services
  • Yield and subsequent rework or scrap issues
  • Capacity and growth constraints
  • Excessive inventory levels
  • Marketing and company promotion
  • Human resources areas of concern
  • Budgeting and credit issues
  • Location and supply chain issues
  • Image and visual impact issues
  • The next great idea

Is It Worth Doing?

The Six Sigma effort is primarily aimed at cost reductions by eliminating waste such as scrap, inefficiencies, excess materials, rework, and so on that increase costs but add no value. You can translate this to areas of management, marketing, human resources, customer service and even supply chain distribution paths.

As a general rule, Six Sigma projects should produce a financial benefit, either directly or indirectly, through cost reductions, revenue growth, balance sheet improvement or accomplishing strategic goals.

Generally, cost improvements come from reductions in labor, inventory, material, scrap, excess equipment, space and so on. These are drains as is ineffective marketing, personnel choices, marketing decisions, high-priced services you incur as well as poor planning by not planning or not knowing which steps to follow in developing a plan, fix, or growth strategy.

Keep in mind that cost avoidance is not an appropriate metric for determining Six Sigma savings. If a process has been improved, you can’t make a projection into the future about what may have happened if the project had not been done.

Also, know that the vast majority of Six Sigma projects are straightforward reductions of costs that result in hard savings. A good way to estimate the potential value of a project is to imagine how much you could save if the problem was completely eliminated.

A solution that isn’t sustained over the long term has little value. That kind of solution can make you feel good for a while, but if the problem doesn’t stay solved, it will end up being a frustrating experience.

The how-to examples are first steps to taking control of your problems and being sure they get to a point of fixing. If done properly, this will provide additional data to better understand your aftermarket business and to make further improvements to your ongoing process of business growth and improvement.

Hopefully you’ve found an abundance of easy-to-use and readily available tools of thought and simple techniques to assure that your problem remains solved for the long-term from this two-part series.

As a professor specializing in motorsports and aftermarket business topics, this allows me to suggest that your first days to improvement start today by doing your business and personal homework-namely, defining your issues. Then attempt to better understand the way to steer clear of the negative and improve on the growth by knowing you can do it.

I welcome your comments to this strategy and how it can be a positive dynamic in your aftermarket business growth process. By reading this article, you’ve already taken the first step.