Six Sigma Case Studies : Reducing Sales Returns

Industry: Consumer electronics and high tech

Background

The client is a Fortune 500 company and considered on of the most admired corporations in the world. As a leading manufacturer of computers, the client partnered with TELUS International to provide inbound sales support.

While business was booming, the account continued to face challenges in terms of sales returns. Over the years, the queue had received numerous praises for consistently surpassing sales goals; however, sales returns were a constant problem. Over time, the inbound sales queue was consolidated into a single queue with a revised return rate target set to a record low of 4%. At the time, the account was averaging a 9% return rate.

The TELUS International Business Process Improvement team was deployed to address the challenge by way of a Six Sigma Green Belt project.

The challenge

The client’s aggressive business growth coupled with its current business model led to various challenges:

• Availability of complete, timely and relevant data
• Confusing and inadequate e-commerce tools
• Unavailability of debugging tools and decision trees
• Confusion with compatibility requirements of products being sold

Solution

The team took a three pronged approach to address the issues systematically:

Deployment of product specialists: Sales representatives with high-expertise on product specifications and parts compatibility were selected to become product specialists. They were responsible for:

• Providing adequate reporting and feedback for continuous improvement
• Providing assistance to sales reps having difficulty finding correct/compatible parts for the customer
• Conducting regular coaching sessions with agents for returns avoidance, proper item selection, and tools navigation

Order management: The top returned items were isolated for further review while real-time auditing of orders for accuracy and compatibility were put in place. Further, cancelled orders with wrong or average order value increased by $8.

Returns scrubbing: Timely internal scrubbing was performed on product returns to identify issues with order management. The top returned items and top drivers for returns were reviewed on a regular basis to provide data for continuous improvement and for agent coaching geared at returns avoidance.

Results

TELUS International helped attain a significant improvement in sales returns for the following three months after deployment of the new processes:

• Average weekly dollar value of returns decreased by almost $13,000
• Decline in returned revenue averaged 7%
• Return rate of items sold averaged 5.6% (even reaching the aggressive client goal of 4% during some weeks)
• Close rate improved by 1%