Six Sigma

Lowes Misses the Mark

By Ron Pereira Updated on July 12th, 2007

A few months ago I blogged about how a company called Qualpro was (and is) claiming its MVT methodology was far superior to Six Sigma.  One of their success stories was Lowes.  Their angle was that since Home Depot is a “Six Sigma” company and struggling (sacking CEO’s, etc.) MVT is the secret to any CEO’s issues.  From Qualpro’s website we read the following statement about Lowes:

Lowe’s experiments using MVT® on an advertising piece cover resulting in tens of millions in increased sales and lowered costs. Using MVT® to test the effectiveness of the front cover of a weekly advertising piece, Lowe’s experimented with 29 different ideas. Many of these ideas had plagued advertising and marketing managers for years as to what techniques were effective. Final results were that Lowe’s was able to move away from the theoretical and generate demand curves based on actual sales data. The front cover project clearly indicated savings in the tens of millions and additional sales are estimated to also be in the tens of millions. All total, Lowe’s reduced advertising expense by $50 million while increasing sales.

Fast forward a few months and it seems all is not so rosy at Lowes after all according to the latest news.

In addition to reporting a 6.3% drop in first-quarter same-store sales and a more severe 12.1% fall in earnings, Lowe’s lowered expectations for the full year to $1.99-$2.03.

Let me be clear, I am not happy Lowes is struggling and I am not here to bash MVT.  That would be too easy.  Instead, I want to point out that what goes around comes around.  Consulting firms should celebrate successes… but they should also be very careful how they compare themselves to their competition.  I know some really good consultants who would never, I repeat never, disparage a competitor.  It’s like the old rule… never bash your current boss to a potential boss as this says a lot about your character.  Qualpro should learn this rule. 

For the record, I intend to study MVT a bit in the coming months as I am sure there is some good in the methodology… even if its inventor’s marketing strategies make me sick. 

  1. Mark Graban

    May 24, 2007 - 10:35 am

    Are you confusing correlation with causation? Just because Lowes store sales dropped, doesn’t mean it’s a problem with MVT. Maybe sales would have dropped more without it (there are probably macroeconomic factors at play). How did Home Depot sales do in comparison? (I’m too lazy to look right now).

  2. Ron

    May 24, 2007 - 12:53 pm

    Ahh… great points Mark! You are sounding like a closet Six Sigma guru. I need to check on Home Depot… for the record I just bought a new grill from Home Depot this past weekend. Is that even relevant here? Probably not.

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