In a recent blog entry, Michael J. Webb, coauthor with Tom Gorman of Sales and Marketing the Six Sigma Way, says that an important management system for senior executives is one that measures the costs of production. Webb adds that executives must know not just the total cost of production, but also the costs of the stages of their production, including the costs of marketing and selling their products.

“Sales and marketing organizations need this every bit as much as production manufacturers,” says Webb. “Unfortunately, sales and marketing organizations typically are not even aware that such a system is possible, much less of the profound effects it could have on management decision-making.”

In Webb’s estimation, examples of this are playing out right now in marketing departments near you. The marketers’ goal? To increase the quantity or reduce the cost of the leads they produce for their sales force. For example, they may do so by offering incentives to individuals who agree to talk to a salesperson. How are the results measured? Increased quantities of leads or reduced costs per lead.

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