Consultant scores with mathematical modeling.

It's not necessarily easy to see how advanced mathematical principles could help make printed sales circulars more successful at lower cost. But that's just what happened at Lowe's Inc. and Staples Inc. after they brought in QualPro Inc., a Knoxville, Tenn., firm specializing in what it calls multivarible testing, or MVT[TM] Lowe's, for instance, says it saved more than $50 million in advertising costs in a targeted campaign, while boosting sales.

QualPro (www.qualproinc.com) got its start in 1982 by working with manufacturing companies, says its founder, Dr. Charles Holland. Since that time, it has worked with more than 1,000 companies--many in the Fortune 500 and in all types of industries--and claims an impressive track record in bringing improvements. In fact, Holland said in an interview, if QualPro doesn't think it can generate five times the company's costs for its work in the first year, it won't take on an assignment.

Holland concedes that the mathematics, which uses matrix algebra, is "fairly complex." This allows the effects of each and every variable in a process--up to 20 or 30 or even more--to be studied independently of any other. "The key thing is having balanced and orthogonal matrices" to understand the importance of critical variables, he says. "We can do more classical experimental design after that."

According to QualPro, roughly 53 percent of the ideas and variables it tests don't have a significant impact on a process, 22 percent actually make it worse and about 25 percent improve it. Holland says those numbers have essentially remained the same over the past 16 years, and the company has completed close to 14,000 projects.

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Holland has just released a book, Breakthrough Business Results with MVT (John Wiley & Sons, $29.95), which chronicles many of the projects the firm has worked on over the years.

QualPro's first step is an assessment: does the company have good processes and decent measurements, and what is the potential for improvement? "It needs to be tied to a financial payback," Holland says. "We go out and look at processes, and pick up varying elements and ideas. When we conduct an overview with the company, we will get a whole lot more. Within a matter of days, we come up enough things to investigate that it usually staggers management."

Holland started the firm after leaving a job as quality division manager for the weapons production plant at Oak Ridge, Tenn. He says that in the early years, "we typically came in and showed manufacturers how to [improve], and tried to make them self-sufficient." A push into service companies began in the 1990s, and now about 60 percent of clients are in service industries, he says; unlike manufacturers, "they want breakthroughs--they want sales to increase in the next quarter, they want real bang for the buck."

Interestingly, it was quality expert and business legend W. Edwards Deming who helped launch Holland and his company. Holland says he sent some of his employees to Deming's quality seminars, and then went himself, in 1982. "He took a liking to me, and he used to tell people, 'Charlie Holland knows what he's doing,'" he says. Indeed, Deming's referrals were responsible for most of the company's assignments in the early years--not exactly a bad way to build a business.