Increasing sales and customer satisfaction

Lean and Six Sigma originally focused on manufacturing, but the economic benefits of using these techniques in areas such as sales and marketing now equal – and in some cases exceed – manufacturing gains. Lean Six Sigma techniques can increase sales by improving customer satisfaction and facilitating better understanding of the voice of the customer (VOC).

For instance, one of our students recently completed a Lean Six Sigma Black Belt project for a service company. The data came from a VOC survey the client sent to 1500 of its active customers, and based on analysis of the results, company management began to deploy an intensive program to improve the capability of their inside and outside sales force.

Initially, the company was struggling with stagnant sales. The needs assessment was followed by a blind survey of the four top executives in the company that included questions rating the quality and frequency of calls by phone representatives and price competitiveness. With the exception of the questions relating to price, the results of the analysis showed that the focus should be on training and improving sales personnel. This result from the VOC survey accurately matched the general perception of the management team that it was necessary to increase customer satisfaction to achieve sales growth.

In another case study dealing with customer satisfaction, Lean and Six Sigma were applied at an auto dealership to improve the weekly new vehicle ordering process. Initially, the dealership ordered new vehicles based on a pre-established pattern. Now, however, the dealership analyzes its sales and customer feedback to adapt its product offering to customer requirements and improve its own performance; because of this success, the dealership is also applying Lean and Six Sigma in its service departments.

In fact, the success of Lean and Six Sigma at the auto dealership was one of about 42 Lean and Six Sigma projects implemented in a regional network of dealerships to improve the Sales and Service Customer Satisfaction Index (CSI). This effort involved the creation and training of an interdisciplinary team of 10 members over a period of 18 months. At the end of the 18 months, 86 percent of dealers participating in CSI Sales projects and 76 percent of dealers participating in CSI Service projects had improved their ranking. In the most successful project, a dealership that ranked near the bottom for CSI in Sales and that ranked last in the network in terms of Service jumped to number one in Sales and eighth in Service. And although individual dealerships had varying degrees of success, the many positive results clearly demonstrated the potential of applying Lean and Six Sigma continuous improvement tools and methods to drive change and improve performance in CSI. In addition, the project showed the importance of developing employees with a combination of strong change management and data analysis skills. We believe that this approach may be applied successfully to many other functional areas such as sales management, inventory and replacement parts.

A common mistake of companies adopting continuous improvement efforts is to stop developing their skills before fully realizing the benefits. This results in implementations where companies fail to sustain improvements. While the allocation of resources is always scarce, the need for effective problem solvers never diminishes and should be a priority in any business environment.

The University of Michigan has provided Lean and Six Sigma training and certification for more than a decade. More than 10,000 students have been certified through our programs.

For more case studies and information, visit: http://interpro.engin.umich.edu/

Biography

Dr. Luis Garcia-Guzman, is an Assistant Research Professor in the Department of Industrial and Operations Engineering at the University of Michigan Ann Arbor. He holds a Six Sigma Master Black Belt certification and is an instructor for courses in Quality Engineering, Simulation, and Lean Six Sigma.