case 1 sales force integration at fedex corporation: a case presentation example for marketing 458...
TRANSCRIPT
Case 1 Sales Force Integration at FedEx Corporation:
A Case Presentation Example
For Marketing 458 – Sales Management
Team Members:Doug VorhiesJimmy Buffett“Mac” MacNallyThe Coral Reefers …
Outline
Situation Analysis Assumptions and Missing Information Problem Definition Analysis of Alternatives Recommendations
Situation Analysis
Recent acquisitions of freight firms has lead to multiple FedEx Salespeople calling on the same account.
Need for unified approach to customers
Project ARISE
S.A. - Customers Large Businesses (GT $40,000/yr)
Contractual – lower price to customer. Small Businesses ($6,000-40,000 rev.)
Try for contracts – lower price to customer.
S.A. - Market Offerings
Overnight packages 1, 2 or 3 day delivery Money back guarantee on 1 day.
Ground Freight services for large and often heavy
packages.
S.A. - Competition
Overnight: UPS Airborne USPS
Ground: UPS Trucking firms
S.A. – Compensation
Express: Revenue Targets w/ Bonus at 96% of
goal Primary focus on existing accounts. Goals set by Corporate with adjustment 70% salary Trips/Pres Club as incentive
S.A. – Compensation
Ground: Revenue Targets + Activity Targets with
bonus at 50% of goal 60% of incentive based on SP F/C No adjustment 82% is salary Bonus financial incentive only
S.A. – Pkg Rev.
Revenue per pkgYear Overnight 2/3 Day Int'l Pref Ground
1999 14.34$ 9.93$ 41.87$ 5.36$ 2000 14.52$ 10.31$ 43.36$ 5.55$
Results for 2000 demonstrate that integrating the sales force may be problematic due to less revenue attributable to ground.-Express AEs might see comp. shortfall if quotas not realigned.-Ground AEs would see targets jump creating disincentive.
S.A. -Sales Force Structure
Two Units Express and Ground Express:
2,200 Account Executives (AE) Ground:
800 AEs. Both SF structures are hierarchical Multiple AEs call on client
No one AE as focus
WWS
Global
Local/Nat’l
Field
Inside
Inside Telephone Sales
Worldwide – 104 AcctsOver $10,000,000 Rev.
Global – 237 Accts$1,000,000 -10,000,000 Rev.
Local/Nat’l – 200 Accts$5000,000 - $1,000,000 Rev.
Field – 600 Accts$40,000 -$5000,000 Rev.
Inside – 60 Accts$6,000 - $40,000 Rev.
Inside Tel – 211 AcctsBelow $6,000 Rev.
Express Structure
National
Field
Inside
National – 59 AcctsTop 500 firms
Field – 616 AcctsMedium Size
Inside – 155 AcctsSmall Custs and Prospectingfor new business
Ground Structure
S.A.– ARISE Impact
Will make dealing w/ FedEx easier. Will integrate shipping systems Designed to improve customer ability
to ship via FedEx. Will give opportunities to integrate SF More consultative selling Move toward stronger relationship
Build importance of SF to customer
S.A. – Teams
Team selling can enable stronger service knowledge by bringing ground and express knowledge to benefit customer.
How to compensate. Role of inside sales?
SWOT - Strengths
Overnight industry leader (46% Share) Best on-time express performance High brand recognition Consultative selling combined with
Industry leading technology brings Innovative solutions to save customer money.
SWOT – Weaknesses
Two Sales forces leading to two points of contact for cust’s.
Two SF structures & comp systems. Two shipping tech systems. Weaker position in ground Duplication of some operations (e.g.,
2 sets of FedEx trucks ground and express.
SWOT – Opportunities
Market growth for O/N & Express O/N growth at 6-8% (Ex 2) Ground growth at 8-10% (Ex 2)
Cost savings from shipping systems integration (ARISE)
Build business when ARISE goes online. Cost savings when ARISE goes online. Cost savings from SF integration
SWOT – Threats
Commoditization of O/N business lead to reduced revenue.
Ground is commodity business. UPS stronger in ground. Customer confusion due to two SF. Customer confusion w/ two shipping
systems. Business is impacted by bus cycle.
Class Discussion The presenting team is to stop their
presentation at this point and give the class an opportunity to add to and discuss issues.
This is the time for the class to find what the presenting team has missed.
I will be evaluating the class on their analysis and ability to find problems or unidentified issues in the presenting team’s presentation.
Assumptions/Missing Info.
ARISE will be successful Top Mgmt support Economy continues to grow SF is not able to stonewall changes
Class Discussion
What have we missed.
Problem Definition
Problems: Different sales strategies Different comp plans Lack of coordination Reduced opportunity for relationship
building Multiple customer touch points creating
confusion Increased costs
Overall Problem
Need to integrate Sales Force to bring unified customer contact.
Alternatives
1. Integrate current sales forces into one2. Do not integrate but coordinate.3. Maintain Status Quo – not considered.
Alternative - Integrate Develop one point of contact One shipping system (versus two today) More focus on consultative selling Build Ground Services Business Compensation system for ground not
delivering. SF Goals individually set/Targets too low?
Alternative - Do not integrate but coordinate.
Maintain two SF’s but create coordination mechanisms.
Team Selling for larger accounts Set Ground goals at corporate to match
Express approach Move toward higher goals for ground. Create sales support specialists to do the
technical integration w/ customer systems.
Recommendation – Integrate! Model comp system after Express – less disruption
to revenue. But add “Yield” goal/incentive.
Redistribute territories where necessary Cross Train Train on ARISE Create sales support specialists to assist with tech
integration. Eliminate duplication in territories – eliminate
positions in SF if necessary – cost savings. Maintain salary plus incentive model. Cost savings can be realized from integration of
both SF and ARISE.
Class Discussion
What has the group missed in their analysis of alternatives?
Questions about process?
Other things for Class to Remember Team Presentation – Approx 30 Minutes of
presentation time (not counting questions). Individual 2 page (typed) case outline will be
turned in at the beginning of class by each student (presenting team excluded). Hand in 1 copy and keep one for yourself. You may discuss w/ your team but prepare
individually (we will check for copying). Presenting team to give 5 T/F questions (with
answers) to Dr. V. for inclusion on final exam. Send Dr. V. copy of team slides (via email).