Measuring Marketing

While most Six Sigma work is aimed at reducing defects and deviation, you can use the same measurement tools to measure the effectiveness of marketing. 

Yahoo!'s Redesigned Home Page
Faced with accelerating competition from Google, Yahoo! decided to redesign their home page. But instead of using gut-feel and conventional wisdom, they counted clicks.

On the internet it's easy to set up two pages that are slightly different, direct traffic to each one, and then count which one gets used more. That's the essence of all measurement in marketing. Which ad works best? Which media works best? Which headline, message or call to action works best? According to Businessweek's October 9, 2006 article by Justin Hubbard:

Conventional Wisdom
The Data Says
Users want news, not gossip Nope, they want gossip
Users want a minimal, Google-style page People will use mail, messaging, and news if buttons are available and in the right place.
Position of the search box doesn't matter. Moving the search box a little can raise or lower searches by millions of clicks.

OfficeMax Tweaks Its Retail Space
Like supermarkets, that focus on herding customers to higher priced goods, OfficeMax is changing how and where it displays products "by scientifically understanding how customers interact with our stores".

Kenneth Change of the New York Times reports that computerized cash registers provide a "wealth of knowledge about what people are buying." OfficeMax found that people were buying 3-ring binders, but skipping smaller quantity dividers located nearby and opting to walk to another part of the store to buy dividers in bulk. OfficeMax moved the bigger packages of dividers close to the binders and sales increased.

DOE Enhancements to Marketing Measurements 
While traditional marketing contrasts two choices for a single factor at a time (e.g., two headlines), it can take awhile to get the answers you need. Using Design of Experiments, you can compare two, three and even four factors at the same time. In a print ad, you can compare headlines, body copy, media and pricing all at the same time and let DOE sort out the best of all four.

Here's My Point
Improving operations by reducing defects and variation can dramatically boost the bottom line, but so can measuring the effectiveness of your marketing. One headline can out-pull another by 10-to-1. One offer can out-pull another. One price point can deliver more than another. And you'll never know unless you measure the results.

Rights to reprint this article in company periodicals is freely given with the inclusion of the following tag line: "© 2008 Jay Arthur, the KnowWare® Man, (888) 468-1537,"

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