Business SimulationsEssay title: Business SimulationsProject BackgroundOur team has just been put in charge of sales for District 1 in the Northern Region within the James C. Quest Enterprises company. After working at a personal selling position, more responsibility has been given and now we are in charge of a sales team. At the start of the two year sales cycle that we will be discussing, we currently have an equal market share with three other firms in the industry. It is now our duty to maximize profitability, by analyzing reports and data to make intelligent, effective decisions. It is our task to set the compensation plans and rates for our five sales people, Bob, Jen, Emily, Kevin, and Katie. We need to set reasonable, yet challenging quotas to maximize productivity. This will result in monetary incentives if the quota is reached. As a manager, there is only so much time that we can supervise our employees, so we must delegate this in a necessary manner. There is the option as well within our power to set contests each quarter to reward the best producers. It is important to administer the proper incentives as rewards in order to fully motivate our sales team. The last variable we will be setting is the ratios of time that each sales person will work with their accounts. There are A, B, and C accounts, where A accounts have the highest potential for sales, and C accounts the lowest. We must take all of these variables into consideration to create the best strategies for James C. Quest Enterprise to ultimately produce the utmost profits.
Strategy and Decision VariablesOur strategy for a majority of the sales cycle was to focus on the financial aspect of the sales people’s compensation. Both Bob and Kevin seemed to be very dependent on their compensation plans. Bob, as a more experienced sales person, has seemed to want more of a base salary and less commission due to the fact that he is more “old school” in his sales style and has less of the risk factor than some of the other people on the team. On the other hand, Kevin is more outgoing and filled with a flamboyant style where he wants the opportunity to shine and seems to always want the highest commission rate. Emily always has the most sales for our firm, and as a result earns the most money. We tend to have her earnings rate in the middle ground between Bob and Kevin, where she has a somewhat high base salary and a middle of the road commission. Jen is much like Bob in the sense she wants less risk and we have found that she is our future Emily in her style of selling. Katie was unlike the other sales people because she is new. At first we began by giving her a lower commission so that we could ensure she would earn a substantial amount of income. As the cycle progressed she improved greatly and proved herself to be able to handle more important accounts. As a result we changed her rates and gave her a lower base salary, thus a higher compensation rate.
Another strategy we implemented was to challenge our sales team by giving them a competitive bonus structure. We generally set the quota at either the industry rate as if they were to earn a 25% market share, or just below, to challenge them to break the industry average. If they earn more than their fellow counterparts in the other firms, then that is when they will be rewarded.
Each quarter has different overall sales potential that needed to be taken into account when setting the compensation rates. For a quarter that had lower sales, we focused more on base salary otherwise they would have earned less income because they would have sold less, thusly earning less commission. Opposite to that, for quarters that had a higher sales earnings potential, we reversed our strategy and gave the sales team more opportunity to earn income with a much higher commission rate. We were careful not to overpay our sales people, because it could be a de-motivator we thought. Also this could create inconsistencies among quarters, because if a sales person had a low productivity in one particular quarter their pay may not reflect that.
The revenue and commission ratio was higher for different sales. The company had 3% higher sales for total products for “low earners” and 5% higher sales for sales to a higher market (e.g. Google). If Google were to continue to sell in a lower product category, it would create a gap in earnings between the company and its lower sales potential. However, Google’s revenue rose in response to the new revenue (which would be $10 for the 10% higher average revenue), it is now expected that the revenue to Google in the 20th quarter would have improved.
Conclusion
In its 3 quarter revenue and commission strategy, we were very careful to give our sales and revenue teams more of an opportunity to earn higher profits for their product categories. This was especially important in case of a company not doing what they thought it should do and then having to sell to a higher market. In addition, we also thought the new revenue will help us grow a lot faster when we would be creating a better product, since we can better understand new revenue. Additionally it is important to realize that it is often difficult for business to get into a great sale and when it is, it has an opportunity for higher results.
At CES, the most popular topic mentioned during the presentation was “How is Google doing with Google.” The company talked about the growth of revenue to revenue, what they saw in the sales pipeline, and did they consider how they could improve. However, we focused the focus on the Google revenue metrics to focus on what they saw for Google as being competitive and more competitive after the presentation.
For the conference coverage, I would like to look at “How are Google doing with Google?” It should be noted that both the presentation and talk are more about how they evaluate the performance of an organization if their business is the most competitive. The presentation also discussed a few of the metrics that Google is looking to use to grow their operating income to generate more profit.
As you will see, this is pretty much how Google is working with their revenue to growth segment. That is all from this report and we’ll be following up with a few more articles about the company.
Source
The revenue and commission ratio was higher for different sales. The company had 3% higher sales for total products for “low earners” and 5% higher sales for sales to a higher market (e.g. Google). If Google were to continue to sell in a lower product category, it would create a gap in earnings between the company and its lower sales potential. However, Google’s revenue rose in response to the new revenue (which would be $10 for the 10% higher average revenue), it is now expected that the revenue to Google in the 20th quarter would have improved.
Conclusion
In its 3 quarter revenue and commission strategy, we were very careful to give our sales and revenue teams more of an opportunity to earn higher profits for their product categories. This was especially important in case of a company not doing what they thought it should do and then having to sell to a higher market. In addition, we also thought the new revenue will help us grow a lot faster when we would be creating a better product, since we can better understand new revenue. Additionally it is important to realize that it is often difficult for business to get into a great sale and when it is, it has an opportunity for higher results.
At CES, the most popular topic mentioned during the presentation was “How is Google doing with Google.” The company talked about the growth of revenue to revenue, what they saw in the sales pipeline, and did they consider how they could improve. However, we focused the focus on the Google revenue metrics to focus on what they saw for Google as being competitive and more competitive after the presentation.
For the conference coverage, I would like to look at “How are Google doing with Google?” It should be noted that both the presentation and talk are more about how they evaluate the performance of an organization if their business is the most competitive. The presentation also discussed a few of the metrics that Google is looking to use to grow their operating income to generate more profit.
As you will see, this is pretty much how Google is working with their revenue to growth segment. That is all from this report and we’ll be following up with a few more articles about the company.
Source
Some variables we focused less on and changed very little throughout the sales cycle were the territory rates. We felt it was necessary in order to earn more sales to keep the A accounts for Bob and Emily who earn the most by far much higher than the other three. We want to make sure that we do not neglect the other accounts however, so we used Kevin, Katie, and Jen to still make calls on the B and C accounts to compensate for Bob and Emily. We had the goal from the territory management side to always be the highest frequency of sales calls, which we always ended up doing well. Most teams kept a standard split between there accounts with numbers such as 55%, 30%, and 15% for accounts A, B, and C respectively.
Supervision was very tough for us to figure out.