Case Study 4- Auto Parts Industry
The Company has developed a four-prong sales program, which requires the General Manager and the Sales Manager to concentrate more on sales, growing existing, and aggressively developing new accounts. This sales diversification program will depend on the contribution from a recently hired Sales Representative.
The Company has shown their seriousness by improving the basic sales collateral material – brochures, videos, and a redesigned website to support the sales force. The website has been revamped to channel feedback from customers. This source of information flow will be used to continuously improve their online experience.
The Company has designed a Sales Rep Agreement that establishes a more goals and objectives driven relationship on several fronts:
Sets mutually agreed on goals for existing and new accounts (1 to 3 years).
Requires the Sales Rep to sign a formal Agreement, which allows The Company to develop its own house accounts, but offers protection on an account-by-account basis, and defined territory.
Establishes better communications on the achievement of goals and new customer development – via regular e-mail, Skype conferencing, and regular meetings with the Sales Manager.
Requires the Sales Rep to record and chart the prospects they are working on to eliminate any duplication of effort by the Sales Manager and the other Reps. This will utilize new Customer Relations Management (CRM) software.
The Sales Rep will focus on ten SIC industry segments. A secondary list that contains seven other segments, which need to be market tested for penetration possibilities, have been added. Success in both the primary and secondary target markets are to be broadly shared with all the sales personnel so that the Company can transfer this knowledge across all territories.
The Sales Rep was asked to confirm the reasonableness and attainability of a personal $2.0 million sales goal in his territory by the end of year two. This goal correlates well with the expectations of the Sales Manager. It is important to monitor the Sales Rep’s progress in quotes activity, sales follow through, increased website traffic, and new prospects conversions. The new CRM software will greatly assist this process.
In order to achieve the sales goal, the Rep will require timely technical support to break through some of the accounts. This will involve both the Sales and General Managers.
It is essential that the new Sales Reps’ territory is respected by the other salespersons. Turning too many accounts into house accounts is a turnoff for members of the sales team, and should only be done with discretion and fairness.
The past practice, where an account developed through the website or customer service personnel should be turned over to the Sales Rep after six months, will be continued, but at a reduced rate of commission.
In situations where the Sales Manager plays a significant development and support role, commissions splitting in new accounts penetration, and targeted accounts will be established by the General Manager. While the Company needs to motivate the Sales Rep it should not do so by handing over accounts that were not a consequence of the Rep’s prospecting activity. Transparency and fairness in these cases should pacify any controversy.
The Sales Rep Agreement was reviewed, and changes made on controversial wording. The territory is now clearly specified and accurately charted. The CRM software requires weekly input from the Sales Rep on leads, quotes, conversion rates and follow up action. A clause was added that requires the Company to provide timely quotes, technical support, samples, and feedback as needed.
The changes proposed will facilitate the signing of agreements with other Sales Reps because this profession is used to certain industry-wide standards in their agreements. The wording now softens the quest to develop house accounts by the Company and demonstrates much more willingness to maximize cooperation and support.