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Energy Master Controls, a manufacturer of heating and air-conditioning control systems for commercial properties, has the following compensation program. Reps are paid a $3,500 draw per month, with straight commission paid on a point system and a bonus based on quota performance. The SmartMeter, Energy Master's newest product, does much the same thing as the older Flex- Meter but 30 percent faster and with greater accuracy. The point system is shown in Table 1
Table 1
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
The VP of sales says the problem is a compensation plan problem. How would you fix it?
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
The VP of sales says the problem is a compensation plan problem. How would you fix it? Free
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Compensation of the sales people includes $3,500 as fixed draw amount along with bonus and straight commission plan. The commission plan is based on point system and quota performance. Bonus is paid to the sales people only when quota for each product is met. Besides this, the sales people need to accumulate 1,035 monthly points.
Bonuses of the employees are tied to their team performance that seems difficult to accomplish. Furthermore absence of rewards for individual performance decreases the motivation of employees and hinders their performance.
The company could fix the issue by adopting a plan where individual performance would also be added to the bonus. This plan would create a healthy competition within the team members and increase their motivational level. Hence, it would increase the performance and productivity of employees..
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Salespeople are paid more than just about everyone in the company. This compensation difference can create jealousy, particularly among those who don't trust salespeople anyway and think salespeople just play golf and entertain their way to the big bucks. How can you combat these misperceptions? Does it really matter what others think about sales, or will the need to serve customers and thereby serve the company be enough?
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453811-16-10QP AID: 3806 | 18/05/2015
RID: 7798 | 28/05/2015
Compensation of any profile depends on the policies of the company and factors like the importance, nature and responsibilities of the profile in an organization. As it is known that sales drives the business and is the core activity to generate revenue, the compensation of sales people is somewhat higher in organizations. This should however not lead to jealousy and incompetency, as the companies must pay equitably well to all its employees. Also, the pay seems to be higher as they derive hefty incentives on the sales made.
The sales persons are in direct touch with the customers they represent companies directly and work with a focus to satisfy the customers. Some sales people even operate in a 24*7 environment just to meet the customer's expectations.
Every individual have different perspective but the company's efforts should be to provide fair, transparent and equitable compensation structure for all its employees.
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Energy Master Controls, a manufacturer of heating and air-conditioning control systems for commercial properties, has the following compensation program. Reps are paid a $3,500 draw per month, with straight commission paid on a point system and a bonus based on quota performance. The SmartMeter, Energy Master's newest product, does much the same thing as the older Flex- Meter but 30 percent faster and with greater accuracy. The point system is shown in Table 1
Table 1
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
The VP of sales managed to get the product specialist idea approved by the CEO, even though the CEO argued that the salespeople were just too lazy to make the effort to sell the SmartMeter. "Lower the compensation on it to the territory reps, and everyone will sell the FlexMeter at its lower price," the CEO says. "The best way to get more SmartMeter sales is to cut compensation on the FlexMeter to 20 points." What do you think should be done? Why?
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
The VP of sales managed to get the product specialist idea approved by the CEO, even though the CEO argued that the salespeople were just too lazy to make the effort to sell the SmartMeter. "Lower the compensation on it to the territory reps, and everyone will sell the FlexMeter at its lower price," the CEO says. "The best way to get more SmartMeter sales is to cut compensation on the FlexMeter to 20 points." What do you think should be done? Why? Free
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Company is selling two products that are nearly similarly in features and usage apart from their speed. Lowering the compensation tied to the sales of these products would not influence their sales. As from the performance and number of calls made it can be seen that the sales persons have made maximum number of calls to sell smartmeter which even exceeded the quota of calls to be made. In case of flexmeter they have not even made the number of quota calls needed but still managed the number to be achieved.
Therefore, instead of changing the compensation plan, the company needs to strengthen their internal communications and partnerships. The company together with sales persons needs to identify the reasons of customer selection of smartmeter over flexmeter even when it has better speed.
The company needs to offer customization to meet the customer needs. They can design a compensation plan that would motivate all the team members to sell the optimum mix of products to achieve success. Only tying the incentive to a particular product might lead to sales person only fulfilling their number quota instead of meeting and satisfying customer's needs.
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What is the role of the geographic salesperson in a national or strategic account? Assume that you were a NAM.. What would you do to ensure the support of geographic reps? How would that support differ if you were a product specialist and worked in a team situation? As a product specialist, how would you get the support of the account manager?
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Consider your own experience in group work at school. What makes groups effective? How can you translate what you have learned about group work into working as part of a sales team? Reread "Sales Technology 16.1." What do you think are the characteristics of effective sales teams that have to operate virtually? Could you use any technology tools to collaborate in school work groups more effectively?
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Reread the chapter-opening profile of Kristen Scott and "Building Partnerships 16.1." What have they done to make their performance easier in working within their organization? What are some other things you can do to build stronger internal partnerships?
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Energy Master Controls, a manufacturer of heating and air-conditioning control systems for commercial properties, has the following compensation program. Reps are paid a $3,500 draw per month, with straight commission paid on a point system and a bonus based on quota performance. The SmartMeter, Energy Master's newest product, does much the same thing as the older Flex- Meter but 30 percent faster and with greater accuracy. The point system is shown in Table 1
Table 1
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
The company is planning to create a new position called product specialist. This salesperson will work with territory salespeople and will have a sales quota for SmartMeter only. The product specialist salesperson will work with one sales team (8 to 12 salespeople), and once a territory rep has identified a SmartMeter prospect, the rep will bring in the product specialist. How should the compensation plan be adjusted? Why?
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
The company is planning to create a new position called product specialist. This salesperson will work with territory salespeople and will have a sales quota for SmartMeter only. The product specialist salesperson will work with one sales team (8 to 12 salespeople), and once a territory rep has identified a SmartMeter prospect, the rep will bring in the product specialist. How should the compensation plan be adjusted? Why? Essay
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Many wise people, such as Steven Covey, say to worry about the things you can control and not to worry about the things you can't control. What does that mean for a salesperson, when so many promises a salesperson makes are actually fulfilled by someone else?
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Energy Master Controls, a manufacturer of heating and air-conditioning control systems for commercial properties, has the following compensation program. Reps are paid a $3,500 draw per month, with straight commission paid on a point system and a bonus based on quota performance. The SmartMeter, Energy Master's newest product, does much the same thing as the older Flex- Meter but 30 percent faster and with greater accuracy. The point system is shown in Table 1
Table 1
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
Compare the performance of Smith and Longoria. What are some possible explanations for the poor SmartMeter sales?
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
Compare the performance of Smith and Longoria. What are some possible explanations for the poor SmartMeter sales? Essay
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Answer Rick's questions as if you were Karen. To help you with your answer, consider that she and the service reps are in Kansas City, distribution is in St. Louis, and the corporate office (where credit, payroll, and other such functions are located) is in San Francisco. Regarding KHR, would it matter to your answer if they were a new customer versus a long-time customer? Why or why not, and if so, how?
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Energy Master Controls, a manufacturer of heating and air-conditioning control systems for commercial properties, has the following compensation program. Reps are paid a $3,500 draw per month, with straight commission paid on a point system and a bonus based on quota performance. The SmartMeter, Energy Master's newest product, does much the same thing as the older Flex- Meter but 30 percent faster and with greater accuracy. The point system is shown in Table 1
Table 1
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
Evaluate the district's sales performance. Draw conclusions ("Just where are we doing well? Doing poorly?") but don't fix anything yet. Justify your conclusions.
Reps are paid $5 per point, or $5,165 plus a bonus of $500, if they sell quota for each product, for a total of $6,675. The total number of points to reach each month is 1,035, but reps have to reach quota for each product to get the bonus. Tables 2 - 4 show the performance of the district.
Table 2
Table 3
Table 4: Total Sales Calls
Evaluate the district's sales performance. Draw conclusions ("Just where are we doing well? Doing poorly?") but don't fix anything yet. Justify your conclusions. Essay
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It took you four months to find a job, and you were almost out of money when you finally landed your position. But today your boss asked you to do something unethical. You aren't sure what the corporate culture is yet because you are new at the company. How do you respond?
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Some companies are using contact management software to observe salespeople's activities and to supervise salespeople more closely. Some salespeople, though, are not supervised closely-as long as they close enough sales, the company is satisfied. To what extent should salespeople be allowed to manage themselves? What risks do you take as a sales manager when you allow self-management among salespeople? How can you minimize those risks?
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A sales manager gets one too many complaints about pushy salespeople, poor follow-up after the sale, and a lack of customer care, and wonders if the compensation plan is to blame. What can a manager do with compensation to promote greater customer service? Are there other ways to motivate good customer service?
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What should or could Rick do to help her? Assume her sales performance is pretty good and he doesn't consider firing her an option.
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A company that rents office equipment to businesses pays its salespeople a commission equal to the first month's rent. However, if the customer cancels or fails to pay its bills, the commission is taken back, even if the customer cancels 10 months later. Is this policy fair? Why or why not? Why would the company have this plan?
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Reread "From the Buyer's Seat 16.1." As a salesperson, what are the implications for how you might sell to Ben? How could you help Ben sell to others in his organization? Is his approach something you would welcome from your prospects or worry about? Why?
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Your company pays straight commission based on gross margin and you have the ability to determine price, thereby influencing gross margin. The product, though, is standard and changes are not made to it when it is sold. What should determine how much you charge someone?
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An experienced salesperson argues against salaries: "I don't like subsidizing poor performers. If you paid us straight commission, we'd know who could make it and who couldn't. Sure, it may take a while to get rid of the deadwood, but after that, sales would skyrocket! Explain why you agree or disagree with that statement.
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