Eureka Forbes Managing the Selling Effort

Managing Customer Value Delivery

Eureka Forbes: Decision Sheet

Key problems that triggered change:

• EuroChamps missing easy sales
• EuroChamps missing customer cues
• EuroChamps not responding to customer objections and queries
• EuroChamps carrying unclean and damaged demo equipment
• Territory conflict between senior and junior EuroChamps
• High attrition rate

Benefits of new compensation scheme:

• Points for each step of the process will enable better understanding of the components of sale
• It will ensure that all steps in a sale are followed
• Less pressure inducing than a pure sales target
• Daily recognition will increase the morale
• Financial rewards will incentivize performance

Disadvantage of the new compensation scheme:

• Points can be scored even without conversion to sales, but similar points will be treated at par – hence sales objective may take a backseat
• High risk of inflationary self-reporting since managers can monitor only sales and not door knocks etc.
• 2-3 hours of extra paperwork, additional training required
• Financial rewards too small for the effort

Conclusion and Recommendation:

• Training alone will cater to the problem of EuroChamps’ selling strategy shortcomings. The new system simply captures a binary variable (yes/no) on whether the step was performed or not. The effectiveness of the step is not recorded, and is difficult to monitor, especially since it is self-reporting.
• Conversion rate is not factored into the points system, hence sales are given less importance in this system. Sales should still be evaluated as a separate metric (not using points), along with points for other calls that didn’t finally convert to sales.
• Since it is self-reporting, values need to be imbibed in the field force so that they do not resort to cheating or misreporting.
• The territory clash problem is still unresolved. The targets for the EuroChamp should take into account the realistic potential of the households in the territory. Thus, either the territories should be sized such that the targets are achievable, or the targets need to be revised based on territory. Clear territory boundaries need to be defined to ensure that poaching of customers between EuroChamps does not happen.