McGraw Hill Case Study. Grant Senter and James Paulsen Baylor University. Identification of the Issues. Sales Process Sales force Structure Compensation Sales Training . Sales Process. Campus Plan All about numbers and opportunity for revenue No deep thought process
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Grant Senter and James Paulsen
Salesforce Structure The cons of a “generalist geographic approach” often limit the product knowledge the sales representatives have, make it difficult for reps to master broad product lines, and pose a coordination issue. Consequences:Decreased salesMissed opportunities Decrease in customer satisfaction The current structure does not present the level of value that our clients are seeking. McGraw Hill needs to slightly restructure the sales force to ensure that there are resources available to help with McGraw Hill’s broad range of products.
Organizations sales training:
Oxy Chem- 5 months
IBM- 9 months
Reynolds and Reynolds- 6 months
No current E-Learning Modules in place to keep sales representatives up to date on products benefits, features, etc.
Compensation PlansSales representatives will no longer have to achieve 95% of quota to receive additional compensation from their 50k base salary. Sales representatives will operate on a straight base salary of 60,000 and will be able to receive bonuses ranging from 1-10% of your current salary. The bonus is based off the group performance of a district manager’s sales team. This includes the product specialist. This method encourages team work, collaboration, and friendly competition amongst groups. The top performing team in each region will receive the 10% bonus off of their base salary.
-Sales training will be given more of an emphasis as the new sales training program will be 3 months long for recent undergraduates.
Experienced Sales Professionals will have a training process of 2-3 weeks.
E-Learning modules will have to be completed quarterly and will cover every aspect of the sales cycle. Sales professionals will be trained on products, the proper sales process, and additional learning
Revenue & Profit
Make sure new sales reps pass certification to enter the field
Expected Decrease in Turnover- 1,000,000
300 reps with the bottom 20% not making quota: Currently: 60 x 50,000= 3,000,000
New plan: 60 x 60,000= 3,600,000
60% reps hit quota:
Currently: 180 x 70,000= 12,600,000
New plan: 180 x 60,000= 10,800,000
12.6 million – 10.8 million= 1.8 million
10% reps over 100% quota:
Currently: 30 x 100,000= 3 million
New plan: 30 x 60,000= 1.8 million
3 million – 1.8 million= 1.2 million
Total Savings= 2.4 million dollars
Impact on Revenues= 1.5 million dollars
Savings: 2.4 million dollars
Expenses: 2.32 million dollars
56.4 million -2.77 million dollars=
Increased Profit: 53.63 million dollars
Compensation- 9 million
Sales force structure-15 million dollars ( 50,000 increase per sales rep)
Up front expenses:
18 Product Specialists- 900,000
Total Expenses= 2.77 million