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Paola Valdez

International Sales Management


Biomed

1.-The current compensation system was salary, plus commission, plus bonus. Should the
compensation system shift to accommodate the change in sales methods and primary target
markets? If so, how? If not, why not?
Yes it is necessary to design a new compensation plan; some measures need to be taken to
change the employees behavior according to the new strategy, for example: they reward the sales
representatives by providing a bonus of 3 % once the representative achieves the target, reason why the
employee would do anything in their hands to close the sale at any cost like for instance to give up to
60 day credit to the customers and negotiating the prices with the customer as they would prefer.
The expenses on which the sales representative incurs visiting the customers is not enough,
any other expenses they incur for more than TBH 380 per day means has to come out of their pockets,
which means they would avoid reaching out to those customers and this affects negatively all the
system. The company should reimburse all costs for losses and reasonable expenses incurred while
doing their job.
On the other hand, in addition to salary, commissions, bonuses and on the job expenses they
receive benefits as: medical insurance and contributing 7% in their provident fund as Thai Drugs
employee. Keeping the compensation plan with a few modifications would allow setting goals to each
sales person and reward upon reached performance, therefore the compensation plan should be as
follows:

Sales reps used to call any customer where they thought they could increase sales volume, the
compensation plan should not be tied to volume sales, the salary is the reward for the job of selling
products, and it represents stability for the employee. Other Benefits (medical insurance, 7% provident
fund) should remain the same as well. Commission should be given based on how much more they sell
over the given targets (meaning if the goal is selling to 5 customers per day, the commission should
apply after they sell more than 5); paying a higher commission on the selling of focus items adjusting
the design to the different territories assigned, because income and education levels varies among
cities. And finally, the bonus by quarterly target achievement quotas based on how many new
customers they bring to the company, how many times they achieve the target during those 3 months

and well management in cash flow movement, because they used to give the bonus to almost all
employees, meaning that goals were too easy to obtain.
2. Previously, the sales force served primarily as order takers, the new role would be to conduct
actual selling activities, how should the company train its sales representatives to make the
adjustment?

The training is highly necessary because they used to work without any emphasis or specific
discipline. Explaining to them the importance of their role is mandatory, since they are the single
contact point with the customer as well as who turns the product in profitability.
The training should be focus on making them understand their primary role and goal,
marketing strategy and product knowledge should be discussed. They are putting less pressure by
taking that function from them, therefore they should make emphasis on that and explain they want to
put less on them to obtain more in sales and that they want them to concentrate on sales only. The
motivation should not only by based on monetary incentives but also non-monetary incentive
programs, by always giving them opportunities to grow within the company and obtain better positions
based on their performance, selecting monthly the best employee, offering capacitation programs for
free in order for them to increase their knowledge and abilities, investing money in tools that makes
easier the selling process and analysis of information, offering a day a month off and paid if obtaining
the

goal,

resulting

all

of

this

in

the

motivation

of

the

team.

3. When revising the performance evaluation system, what input measures would be affected by
the change in selling strategies? How would they be affected?
Every outcome is the result of its inputs. Every effect has its corresponding causes; in this case
the following input measures should be taken based on the new strategy and how evaluating the sales
people will vary:
The levels of spending for instance, because the employees hardly considered the cost of the
products, transportation costs and ordering costs aiming at maximize THB contribution. They also
need to combine price decreases in unit contribution with increased volumes on an order-by-order
basis to ensure profitability; it says on the text that the management would notified the costs set to
assist them in negotiating and staff would need to be fully train.
Same thing when providing the credit they wanted to the customer, which was a huge obstacle
for financial decisions of the company causing effect in the cash flows.

The company would need to expend also on software programs, equipment, materials to
facilitate the work of the employee, and the employees would need to learn how to use it, for example:
It is needed to install a system to build customer loyalty and focus the entire sales organization on the
customer.
The company should provide also the CEO with a dashboard to measure progress in real time.
It is also necessary measuring customer-facing time and use internal support to create more. One of the
major reasons for low sales outcome was territory management. Sales representatives were not
allocated any territory to work within. Hence management should have properly schedule and
compensated sales representative work so that they collect data form market about industry and
competitors to help organization marketing and sales strategy in the future.
In other words: communication skills, negotiation skills, relationship building skills, product
knowledge, market knowledge, prospecting skills, self- management, reducing costs, problem solving,
selling skills based on prospecting calls, leads development, deals in the pipeline, account management
calls, customers inquiries and complaints should be measure, if sales management invest time in
coaching and training on the input measures it can make a big difference on sales results. All of these
measures would affect positively, since they vary from what was being measured in sales people
performance before, by making sales reps to concentrate more on the sales.
3. When revising the performance evaluation system, what output measures would be
affected by the change in selling strategies? How would they be affected?
Companies need the discipline to use meaningful metrics that track performance and inform
sales decisions. Done right, this creates a clear sales course, reduces risk and, most importantly, flags
opportunities.
By taking those measures it implies that they wont only be evaluated on how much they sell
and hence they wont relay on selling the products at any cost, they would need to change their
strategy on how to approach to the customer and considered other elements making sure that the

interests of the company matches with their own goals.


By better illuminating its sales funnel, the company would be able to achieve an
industry-leading bid win ratio and improve its account management. Shifting to a well-trained
team to qualify leads, pitch in with outbound selling and help close deals can add as much as
30 percent back to a rep's day. All of the measures are to obtain the following results: linking

compensation structures with business goals such as penetrating new markets, winning new
customers, overall sales made including new and existing customers, sales profitability, sales
quotas, market share and growth, sales by region and by types of customers, customers
loyalty, providing better customer service, getting to know better the product and market.
5. When revising the performance evaluation system, what non-selling activities would be
affected by the change in selling strategy? How would they be affected?
The sales team will need to expend more time on non- selling activities in order to understand
their goals and achieve them, meaning that they would spend less time on selling while they are
working on those activities:
Training/Coaching, meetings: for many organizations, training and learning is a daily activity,
since they have to refocused their selling strategies and learn how to use other operating systems, as
well as understanding how their performance will be evaluated, they will spend a lot of time on it and
management should keep control of it.
Recording Activities (paperwork, reports): some reps spend way too much time doing this and
some organizations add way too much manual, repetitive process to reps so that theyre taking way too
much time between sales calls and visits. On the other hand, comprehensive and accurate data is
critical to understanding whats going on in the market, how reps are performing and how/where to
help them improve, etc.
Also their functions would require from them to actively spend time on creating a relationship
with the customer, traveling to meet the customer. In a positive note, they wont have to deal with
order processing anymore, which also took time that they could have spent on selling activities.
6. How can the climate of the company, especially in the sales department, be altered to facilitate
the implementation of this new selling approach?
The disadvantages of changing the whole evaluating system on performance and selling
strategies are many, there are people who do not feel ready to take on new roles, there are people who
do not feel well when peers are changed from their group because they feel that losses friends and
some people do not enjoy the fact that other people are promoted, provokes jealousy or envy or having
to re-train on everything learning, all new things can be frustrating, but the training helps also for them
to feel identified with the company in a certain level.

The key is to generate interest among the employees, and for them to understand that besides
their own goals, the whole team has a common objective. Commitment with the personnel is
mandatory; the goal is to be accomplished like a team. In that order, it is necessary they feel that they
have a leader; many of the companies policies need to be explain and communicated, more rules need
to be set, not leaving all choices open for the employees. Doing meetings, where all personnel share
their thoughts and inquiries, so that they feel more comfortable and taken into consideration could also
help.
Delegate commitments and for them to feel committed to the company: The sales force acts as
a link between a company and its existing and potential customers. On the one hand represents the
company to customers, offering them to the latter information, advising and clarifying their doubts
therefore they are very important for the company and they should now it. To be shown that the
welfare of the company means benefits for them as well and that the new strategy was taken to offer
them a better future within the company and their professional life.

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