Eureka Forbes Ltd

Case Analysis

Submitted By: Aditya Thakre

Roll No: 150101007
Section D

Eureka Forbes had a direct sales approach for its customers without the
involvement of middlemen. They marketed themselves as sellers of clean air
and safe drinking water. They targeted customers at home as it gave them
ample time to demonstrate and present to the customers.

Target Customers :
1. Households in 400 A-level cities (population>10000)
2. Monthly income that matches the typical price of its products
Eurochamps Profile
Young men in their early 20s from lower middle class, preferable speaking
English and the local language. Should promote the Friend for Life
philosophy. The compensation was directly linked with the sales and the
variable component of their salaries was based on the sales figures that the
achieved. Being financially needy made them driven to thw task and the age
made them enthusiastic. There was no academic criteria for selection. Just
that they shold be convincing, extroverts and have good presentation Skills.
Eurochamps Tasks
They were needed to perform extensive presentations / demos and were also
trained for customer objection handling.. They needed to sell the product as
a concept that the customers needed the product, i.e. creating the need for
the product in the minds of the customers. They performed the
demonstration at home, which gave enough time for a customer to make
purchase decision. They gave a feel of Try and then Buy to the customers

Analysis of evaluation and Compensation

Their territories were defined, however due to lack of monitoring methods
the territories were prone to overlap between two eurochamps. No customer
database was present to track the customers. A major part of the salary was
through commissions on sales, the company thought this would drive them
to sell more and more products. A large number of the salesforce came
through friend referrals and the own your own bike campaign was also
attracting the youth to join the company as eurochamps.
Issues faced
Inadequate training of the new recruits was a major issue. There was less
attention on relationship building with the customers. The experienced
eurochamps were not willing to carry new recruits along with them for
training. Thus no proper hands on experience was imparted to them. Also,

there was another problem with it: In India, two men entering the house in
the middle of the day was not considered appropriate, where the housewives
would be alone in the afternoon. There were also cases of poaching by other
firms and internally by other eurochamps also. No women candidate was
there in the salesforce as it was not considered appropriate for women to
knock the doors of strangers.
New processes
The new training process aimed to give a feel good factor to the eurochamps
about themselves. It was designed to improve the spirit and morale of the
candidates, thereby improving sales productivity and overall quality of the
sales. Point based system was launched where each activity would generate
some bonus points. Eg a knock on the door would earn 5 points, a demo
would earn 100 points and so on. There was clarity on different stages of the
sales process and how the points were to be earned. Daily recognition of
performance was done which promoted low attrition rate in the company.
There was an improvement in sales productivity and sales quality too. But
this process had its own disadvantage too non performers with no actual
sales but with substantial points could also get rewarded. There was no
established method to prevent eurochamp fro overstating their efforts.
Manual form was filled which could have been easily manipulated.
The annual quota was 60 product demonstrations, at least 10 sales per
month, and 50 customer contacts per day. This included cold calls and door
knocks, demonstrations and sold by friend sales force.

Exhibit 1 Analysis

Year
98-99
99-00
200001
20012002
20022003
20032004

Sales of
Incom
Total
products
YOY%
e
YOY%
Turnover
YOY%
2390 96 2586 2791
16
248
26
3039
17
3187

14

346

39

3533

16

3451

438

26

3889

10

3822

11

502

14

4324

11

4112

5.9

616

22

4728

Job is physically demanding involving lots of travelling and long hours. Its
also psychologically demanding as lots of negotiations, customer handling
takes place. Demoralizing and insulting responses. Pressure to sell more and
more as 2/3rd of income is through sales incentives. These reasons make
Euro Champs drop out after 1 yr on an average
EFL should train team leaders to be able to recognize the signs of
frustrations. Introduce an attractive TA package which adequately
compensates travelling efforts. Introduce psycho-therapist services to be
able to handle frustrating and insulting responses beter. Change
compensation structure which focuses on other aspects of jobs too and
reduces pressure.
Base salary is scaled against length of service, total sales, and average sales
over the last 6 months. A contingency compensation scheme based on
number of units sold could be invoked in the event of marriage or
hospitalization. Confirmed EuroChamps who maintain contact with or
retrained a customer 3 months and 6 months from date of purchase can earn
an additional Rs. 30 and Rs. 40, respectively. Payment under this plan,
termed the Friendship Chain, can not exceed Rs. 600 per month.
An averagely successful salesman earns two-thirds of his monthly earnings
through commissions. This emphasis has an automatic sieving effect: anyone
who cannot learn to sell does not get commission and hence earns less and
exits very quickly.
Issues with Eurochamps
Eurochamps missing an easy sale
Missing simple cues
Unclean and damaged demo equipment
Responding to customer objections is neglected in training
Possible Reasons:
Improper training from seasoned reps and team leads
This can be due to stringent targets/ lack of time to senior reps
Senior reps have no incentive to train new reps who would
encroach on their targets subsequently
Steps Taken by eureka Forbes :

New system Bettering the best was introduced

Compensation is dependent on successful completion of various stages

of selling

Objectives:

Improving productivity

Increasing daily demos

Enhancing Customer engagement time

Providing a diagnostic tool for HCRC