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McGraw Hill Case Study Grant McGraw Hill Case Study Grant

McGraw Hill Case Study Grant - PowerPoint Presentation

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Uploaded On 2019-06-29

McGraw Hill Case Study Grant - PPT Presentation

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 ID: 760618

000 sales training million sales 000 million training process mcgraw plan dollars reps structure months quota current compensation performance

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Presentation Transcript

Slide1

McGraw Hill Case Study

Grant

Senter

and James Paulsen

Baylor University

Slide2

Identification of the Issues

Sales ProcessSales force Structure CompensationSales Training

Slide3

Sales Process

Campus Plan

All about numbers and opportunity for revenue

No deep thought process

Created the night before

Lack of real preparation

Relationship is lost

No Desire

5 minute meetings with professors

Bookstores are checked to be up-to-date

Goal: to get the professor “up to speed” on the latest offerings

Bottom Line:

Customers are not being appreciated

Sales Process is shorted in an effort to maximize revenue opportunity

Result of a poor training process and incentive structure

Slide4

Buyer Process

Slide5

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 sales

Missed

o

pportunities

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.

Slide6

The Candle Problem

Slide7

Slide8

Compensation Plans

Research:

“Once a task called for even a rudimentary cognitive skill,” a larger reward “led to a poorer performance.”

“In eight of the nine tasks we examined across the three experiments, higher incentives led to a worse performance.”

“We find that financial incentives can result in a negative impact on overall performance.”-Dr. Bernd

Irlenbusch

, London School of Economics.

Issues:

The current commission plan only allows for commission to be achieved if one achieves over 95% of quota.

The current plan is contrary to scientific research, does not promote a group mentality, and does not financially incentivize any sales activity under 95%.

Slide9

Sales Training

“Reps

are thrown into the field with barebones training

.”- Anonymous Sales Employee

McGraw Hill sales employees are moving from a generalist sales position to a specialist sales position requiring an in-depth knowledge of McGraw Hill’s technology products.

McGraw Hill sales employees are given 2-3 weeks of in-house training led by their manager. This is far below the standard.

Organizations sales training:

AT&T-6 months

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.

Slide10

RecommendationsSales Force:

Slide11

Sales Process

Starts with Training

Process: Develop a Relationship

Remove “check ins”

Become less concerned with maximization of revenue opportunities

Require and encourage conversation

Cascading Campaign:

Slide12

Recommended Sales Process

Slide13

Compensation Plans

Sales 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.

Slide14

Sales Training

-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

Turnover

Revenue & Profit

Slide15

Implementation Process

March

Make sure new sales reps pass certification to enter the field

Slide16

Financials:

Increased Revenues: 54 million dollarsSavings: 2.4 million dollarsExpenses: 2.32 million dollars56.4 million -2.77 million dollars= Increased Profit: 53.63 million dollars Revenues Training- 30 million dollars (100,000 increase per sales rep) Compensation- 9 million Sales force structure-15 million dollars ( 50,000 increase per sales rep) Up front expenses:Training- 5,000,00018 Product Specialists- 900,000 Implementation- 200,000Bonuses- 720,000Total Expenses= 2.77 million

Savings:

Expected Decrease in Turnover- 1,000,000

Compensation:

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

- 600,000

+1,800,000

+ 1,200,000

Total Savings= 2.4 million dollars

Impact on Revenues= 1.5 million dollars