SBI Cards

Mr Yashwant Goel was appointed the new ASM of the Kolkata territory for SBI cards. Kolkata already had 2 ASMs managing the sales in the city. SBI cards operated under the SSP system (Sales Service Provider), wherein instead of using direct sales agencies they tied up with entrepreneurs as channel partners who provided them with infrastructure and manpower in return for a retainer fee. An ASM headed each SSP and was responsible and accountable for the performance and productivity of the SSP. Kolkata had two SSPs running by the name of Ivangel and Capricon. Ivangel was the oldest of its SSPs, which started out in 1999 since the inception of the company and commencement of operations in the city. Currently Ivangel contributed the lions share in the number of cards sold per month with was almost 55%. It had the largest share of sales force under it with 45 SEs (Sales Executives). Capricorn was incepted in August 2001 and had been consistently increasing it numbers both in terms of FOS (Fleet on Street) and number of cards sold. At present it contributed to almost 30% of the number of cards sold in Kolkata whereas the strength of its FOS was 23. The other contributors in the sales pie were from other channels like branch sales (from the Banks branches) the Internet, the Helpline and existing customer base through various sales promotion schemes. The company SBI Cards was a joint venture between GE Capital and SBI whose only business was selling credit cards. The other players in the market were all banks who didnt have dearth of funds to invest and pump into another of its product line extension. SBI Cards on the other hand, though belonging to cash rich parent companies had to fend for its own funds which is why all its marketing, sales and operational activities had been at a frugal scale and it was known to be a highly cost conscious organisation. As has been the case with other organisations geographical source of revenue contribution, in the case of SBI Cards too, the eastern region contributed the least, which is why there were high expectations from the Kolkata territory to deliver the muchneeded numbers. Mr. Yashwant Goel, 26, joined the company 2years ago and was in charge of Allahabad prior to his transfer to Kolkata. He was awarded one of the best performers awards for notching the highest sales in a quarter in the fourth quarter of 2008. He was an extremely organized, dedicated and ambitious manager. The sales of Kolkata market had been on a decline since December 2007 whereas other metros and major non-metros where SBI Card had its operations were delivering numbers and meeting, at times exceeding, targets. Industry grapevine revealed that other credit cards were doing well in Kolkata, which meant that there was a market and there was tremendous potential for SBI Cards as it was one of the cheapest cards available and Kolkata was known to be a price sensitive market.

On joining office at Kolkata, the outgoing ASM, Mr. Subrat Pani, told Yashwant that in order to increase the scale of operations with a view to pump the market with SBI Cards, Yashwant was given the responsibility of opening a new SSP and heading its operations. Within a month of joining, Yashwant started Personal Touch but it had been almost 2 months since its inception and PT registered a sale of only 20 cards which was disastrous when compared to Ivangel with 125 cards a month and Capricon with 98 cards a month. Moreover the average number of FOS of PT was hovering around 12. The attrition rate of sales force had also been increasing in the past 6 months, and Yashwant felt that this was one of the prime reasons behind increasing costs and lower growth rate in sales in the city. The biggest problem facing him at the moment was sourcing the right kind of manpower and retaining the same. Although he had been placing catchy ads in the leading dailies every fortnight and received desired response, he ended up being able to recruit only 6-8 people who fit the bill. In sheer desperation he was compelled to take on 8-10 others who were not that good but he had to bridge the gap between the number joining and the number leaving every fortnight. His experience in sales taught him that attrition of salesmen was a common problem in most sales driven organisations and PT was no exception to the rule. A glance at the attrition data of Ivangel and Capricon revealed that they too suffered from problems of high attrition but since they were huge in size, it somehow never affected their output greatly. He knew that PTs success and his KRA (Key Result Achieved) was dependent on the survival of PT for which controlling attrition and retaining the right people was critical. He observed that while recruiting and interviewing, whenever he came across a truly promising candidate his bio data showed past experience in selling credit cards for some bank. He was unable to recruit the person because it was corporate policy not to recruit anyone at SE level with prior experience in selling credit cards for any organisation in India. (This decision was taken jointly by the company heads and the fraud control department) Given the nature of selling credit cards, which was a high pressure job, where sourcing the right prospect and converting the same required high selling skills, and pay comprised a large variable component, most salesmen quit within 6 months to a year and joined rival agencies to sell credit cards of another bank. In this way, most of the salesmen would revolve around the clout of direct selling agencies of most credit card companies in the city.

He tried targeting salesmen with prior experience in selling financial services like loans, mutual funds etc but he did not get a desirable response because they preferred selling a portfolio of financial products for most agencies to earn a greater variable pay. Others who came from more educated and affluent backgrounds applied for the posts as a means to earn some pocket money during vacations or while preparing for higher education. They would generally sell the products to a known set of people and once that was exhausted they would quit. In order to attract a large number of such people, PT would have to dole out more in terms of pay package which due to a host of considerations (few of which are mentioned above) it was not in a position to do. He considered other sales channels for e.g telemarketing to fill in the numbers but he felt that the nature of these channels was secondary and complementary to the core channel. If the core channel wasnt performing then investing into the secondary channels would not be a prudent managerial decision. Moreover while setting targets both weekly and monthly, he tried showing juicy carrots by way of lucrative bonus but he saw that most of the bonus earners instead of delivering numbers regularly, held back application forms to show at the end of the week or month to earn the bonus. Many others also traded application forms between themselves so that one of them earns the eligibility for a bonus and then share it between themselves. Whenever he would catch them indulging in these unfair practices they would be sacked. This led to some good performers being made to leave which also depleted his precious resource of good manpower. At the end of the day he would often remember the words of his ex boss 70% of a sales managers job is sourcing and retaining the right manpower and if he isnt able to do even that much then he has lost the battle. Yashwant wants to win the battle and the war- but how? Can you suggest the strategy to Yashwant ?

Target Kaise Karu

6.00 A.M. Jan 29, 2009. Vikram, ASM of Nestles was tossing in bed restlessly. The ringing of the phone jolted him out of his disturbed sleep. It was Mr. Kohli, RSM at the other end. The inevitable question followed What is happening? When and where will you end at? There was a long pause before Vikram replied, There is a problem 4 or 5 lakhs he said trying to visualize what was running across Kohlis mind. Vikram was promoted to first line manager at a relatively young age of 27 years after 5 years of outstanding performance as a sales rep in Karimnagar in Andhra Pradesh. Having tasted success in a market that was growing year after year, he was bubbling with enthusiasm when he took over as ASM of Vikasnagar in April2007. Little did he realize that the bubble would burst in 2 years. The territory had not grown at pace with the potential. Companies like Amul and Nestle were doing well. Whats going wrong was the thought that occupied Vikrams mind every waking moment. Vikasnagar had 3 reps Raghunath, Vincent and Gaurav and sales had grown from 243.6 lakhs in2007 to 264.0 lakhs in 2008. Demand generation in the territory could be better, felt Vikram. In fact even this sales was high because Vikram used to spend the last 2 days of the month at Vikasnagar to close sales. Vikrams team of sales reps had diverse strengths. Raghunath, 34 years old with 11 years of service in the organization, had an academic bent of mind and used to spend considerable time with top retailers. Vikram admired his capacity to get close to retailers. Retailers had not taken up the new introductions in a big way. Vikram planned these calls with Raghunath and was trying to make some headway. Vikram always used to demand orders after Raghunath finished his discussions with retailers. Vincent had joined the company 7 years back. He was close to his stockist and retailers. Vikram felt that Vincent could stretch a little more and capitalize on his contacts. Detailing was not Vincents strength, but he had his own way of getting across to his stockists. Vikram was a strong believer in the management dictum Build on Strengths and he used to feel that Vincents strength of striking instant rapport with all his customers would help build the companys business in the territory. Gaurav, 25 years, had been in the territory for the last 2 years only. He joined as a sales rep almost at the same time as Vikram. Gaurav was an admirer of Raghunths knowledge and Vincent s smooth approach during his 2 years association with them. Gaurav to a large extent was a blend of Raghunath and Vincent. One with the knowledge and friendly approach. Gaurav had the potential to develop into a very good rep and future ASM, but he needed to work hard if this had to be realized. Hemant was based at Rajgir, an upcountry market 100 Km from Vikasnagar. Hemant, 26 years of age, was 4 years old in the company. He had not missed budget in the last 18 months. Hemants parents were in Mumbai and he was under pressure to seek transfer to Mumbai. He never missed an opportunity to press his demand. Vikram did not have a specific reply and used to be evasive in his replies. Hemants territory had grown by 11%in 2007 and 14.5% in 2008. Cadbury was a strong No.1 in the market.

Sunil was based at Jagrutnagar a small industrial town with a population of 2 lakhs, 50 Km from Vikasnagar. Vikram used to visit key customers regularly with Sunil. Sunil used to always demand for additional inputs to these customers. Though price of the product was high it was not always a deciding factor. A few companies like Amul, Parrys and Cadburys had big share in the market. Jayant was the rep based at Hussainnagar, an upcountry market, situated 140 Km from Vikasnagar. Jayant was 28 years old, hard working and ambitious. Jayants had grown by 19% in 2007. Hussainnagars economy had started looking up in the recent past. Consumer durables, 2wheelers, cement, steel, furniture and a number of such goods and services catering to the middle class had started doing well in the last 3 years. Especially after Hussainnagar had become the headquarters of the new district carved out of Rajgir, Jagrutnagar and Vikasnagar districts. Jayant was interested in self-development and used to read quite a lot. Mr. Kohli, RSM, who is himself an avid reader of management used to help Jayant. Jayant constantly kept in touch with Mr. Kohli for this purpose.

PROFILE OF FLMS TERRITORYCUM.DEC.1999 (Rs-lakhs) Name Primary Target Sales %Gr Secondary Stockholding Sales 2008 2008 Sales As on 2007 2008 01.01.2009 Vikasnagar 243.60 264.0 258.0 6.17 228.0 24.16 Hemant 82.80 90.0 91.2 10.14 84.0 7.25 Sunil 72.00 79.20 84.0 16.6 75.6 6.86 Jayant 57.60 69.60 68.40 18.75 60.0 6.08 Total 450.00 482.80 501.60 11.4 447.6 44.35
Represented by Raghunath, Vincent & Gaurav

QUESTION :
1. What is going wrong in the territory? 2. Indicate 5 areas where Vikram is not clear about his role. 3. Suggest an implementable action plan for Vikram.