MILFORD INDUSTRIES

Sales contribution per Customers

• World’s largest manufacturers of tools and accessories
• Sales of 1982 amounted to $540 million
Industrial
Commercial
• Industrial customers were large account 39%
43% Private
holder customers
• Commercial customers consisted of
departmental stores, hardware stores. 18%
• Private label customers consisted of
few large retailers

KEY ISSUE
• Poor performance of the district relative to the region and
nation
• Lack of control and discipline
• Insufficient information about the sales team
 Salesforce in District
Total Number
• EATON : Oldest person, not a quitter sales 1982 1982 of
Salespers (1982) avg % active calls per potential
• BURKE : Solid performer, sometimes lazy on ($000) district accounts year accounts
Eaton 1840 18.3 205 1120 504
• DURFEE : Solid performer, usually inactive at large stores
Burke 1600 15.9 310 1350 525
• HARLOW : Active supporter and advocate Durfee 1500 14.9 160 1470 185
Harlow 1300 12.9 120 1525 139
• FURNESS : Facing Domestic Issues Furness 1220 12.1 220 1075 358
Gibson 1120 11.1 130 940 427
• GIBSON : Uninterested, side business
Caplan 880 8.7 307 1210 883
• CAPLAN : Lack the willingness to work Alderson 620 6.2 458 1640 933
Total 10080
• ALDERSON : Hard working, new recruit, calm
 Total sales (1982) ($000)
avg % district Covered by SALES REP
Eaton Burke Durfee Harlow
Eaton Burke Durfee Harlow
Furness Gibson Caplan Alderson
Furness Gibson Caplan Alderson
6%
18% 6%
9% 9% 18%

11% 11%

16% 16%
12%
12%

13% 15%
13% 15%

Top 4 sales rep as per sales Bottom 4 sales rep as per sales
1. Eaton
2. Burke 1. Alderson
3. Durfee 2. Caplan
4. Harlow 3. Gibson
4. Furness
 active account/potential accounts call/sale

61% 138%

41%
88% 84%
35% 61%
30%

Eaton Furness Gibson Caplan

Eaton Furness Gibson Caplan call/sale

• Only Furness covered more than 50%

• Even though Caplan’s calling is high but
of the required accounts to cover
his sales are low, means either is not
• Gibson covered only 30% of the
calling the potential customers or his
potential accounts
calling skills are low
Salry & Expenses of the concerned
sales reps Total
Total Compensa
Total Compensa tion Plus Expenses/t
Compen Expense Total Expenses/sala   tion Expenses Expenses otal salary
  sation s salary ry Alderson 30800 15400 46200 33%
Caplan 26107 13333 39440 34% Burke 65600 15200 80800 19%
Eaton 51698 5867 57565 10% Durfee 56400 9800 66200 15%
Furness 29635 10489 40124 26%
Gibson 34827 4978 39805 13% Harlow 57000 9200 66200 14%
Other       AVG 19%
district
Sales
People 138204 32533 170737 19% • Alderson has the lowest sales and highest
Total expenses which is a concern
District 280471 67200 347671 1.016996181

• Caplan & Furness’s expenses are more

than other sales rep’s expenses that too
with low sales
• Average expensed of the 4 reps = 21%
 1. Is there a problem in the Capital District?
• Market was not covered by the Salesforce.
• Salesforce did not capture their assigned territories to the fullest.
• Salesforce not active.
• No proper supervision of the Salesforce
• Sales potential is 2100000 more than current sales which means each
salesperson’s sales potential to be increased by $262500 (average)

YOY Growth Sales potential in District vs Actual Sales

14%
Sales Potential District 12180000
12%

10%

8% Sales in District 10080000

6%

4%
1982
Year
2%

0%
USA Region District

1981 1982 average

1. Which salespeople are not performing, as they should? Is
the sales force organized and deployed properly? avg % district Covered by SALES REP
Eaton Burke Durfee Harlow
Furness Gibson Caplan Alderson
• Caplan is the poorest performer.
6%
• He has lowest sales and highest expenses 9% 18%
• Even though he covers only 8.2% of the district but 11%
he has covered only 35% of the potential accounts
16%
in 2 years. 12%

13% 15%

• The Salesforce is not organized properly

because some of them are covering more % of
district and some very low due to which all sales
rep’s cannot perform good.
• For eg 62 year old Eaton is covering 18% of the
district whereas this should be reduced and
given to other sales rep who have low district
coverage.
 1. What should Mr. Oates do as he takes over the district to
begin to eradicate these problems?

CAPLAN :
Performance Evaluation
• Give warning to Caplan that if he has to focus on existing accounts
• Sales target to be given to each
rather than waste time on large accounts
rep and commissions to be set
• Ask him to reduce his sales expenses
based on it.
• Number of calls made and new
EATON:
accounts opened to be evaluated.
• His district coverage should be reduced and divided among Caplan
• Sales expense budget to be
and Anderson.
given.
• Rewards and bonus to motivate
FURNESS:
sales reps.
• Since his past record is good he should be strictly warned to improve
his habits/behaviour and no drinking should be allowed during work
hours.

Gibson:
• He should be asked to open more large accounts