barro stichney inc

8/12/2019 Barro Stichney Inc

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Sales Force Management

Barro Stickney , Inc.Case Study Analysis

Group Members:

Faryal Saulat

Mira Tahseen

Murad Mir

Shehroze Wasif

Marketing 1


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Introduction

The company was started by John Barro and Bill Stickney, who started off as a small

manufacturing company initially. They started a partnership in their own rep agency 10 years

ago. A few years later they decided to hire another salesperson, as their business was expanding.

Therefore J.Todd Smith joined the business as was enthusiastic to work with these two, as he

already had a good experience with them. Both Barro and Stickney believed that Smith had

potential and determination, as proved by his past record of making sales of over $2 million.

Hence he was made a part of the partnership share. Just like Smith, Elizabeth Lee was also hired

because they needed someone who could keep tract of records. All these partners had a family

like atmosphere and their major key was that they had a big group of networking, where they

could interact with people. Through this they made the decision of actively participating with

Electronics Representative Association (ERA).

Now was the time when all the members of the organization had to discuss and make future

plans for expansion. They had to think about whether BSI should or should not expand its

territory and increase the sales force. This would be essential while making future strategies.

Moreover they had to take into account whether to increase the number of principals. Currently

their largest principal of BSI was R.D Oceans while Franklin Key Electronics was their initial

principal which contributed to 15 percent of BSIs revenues.


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Employee profile

Characteristics of the 4 sales people in the company:

Barro Stickney J. T Smith Elizabeth

Proactive Dependable Tenacious Cheerful

Energetic Thoughtful Enthusiastic Hardworking

Gregarious Thorough Experience Dependable

Social Curious $2 million sales Helpful

Taking new

challenges

Handle territory

assignment

Resource

allocation

Qualitative and Quantitative facts

BSI ranged over Pennsylvania, New Jersey and Delware area They purchased a small house and converted it into present officer It was located in Camp Hill, capital of Pennsylvania BSI held a 5 o clock meeting to discuss as future planning Meeting took about 60 to 90 minutes. R.D Ocean was BSIs largest principal


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It accounted for 32 percent of BSIs revenues Franklin Key Electronics was BSIs initialprincipal and had remained a consistent

contributor of approximately 15 percent of BSIs revenues.

Each member received an agenda and supporting data for the upcoming meeting todiscuss the issue of expansion.

It was an ambitious agenda that would determine the future of the company. Meeting was to take place at Bill Stickneys vacation lodge in the Poconos. Other principals of BSI included Swanson, contributing 14% revenue Moore 11%, Horizon 10%, Dickens 10%, Knox 5%, Butler 3%. Salary BSI pays is between $15,000- $25,000 plus bonuses Bonus was given on the basis on sales achieved. 0% commission to $500,000 sales. 20% commission to $0.5 million sales 25% commission for next $0.5 million sales 30% commission for next $0.5 million sales 40% commission for above $2 million. Total incremental expenses include $24,000.

Problems

Barro Stickneys position is such that it enjoys a stable position in terms of sales volumeand profitability yet it is having difficulty in managing two of its largest accounts-R.D.

Ocean and Franklin Key Electronics. This was probably because the workload was not


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being managed and the immense potential that existed was not being matched by the

required sales effort.

BSIs new income is only 7.9% of its revenues. This is a clear indication of highexpenses. They need to control their recruitment and training costs especially since their

major accounts; R.D Ocean and Franklin Key, are the accounts which are not difficult to

sell. The nature of the operations demanded being efficient and proactive of dimensions

like high training and better management of the sales force effort. Both were missing in

this case.

The company is unable to meet its sales projections probably because there were issues

with sales forecasting. A big company like Barry Stickney should employ both objective

and subjective forecasting techniques but there is no mention of the use of such tools in

the case. Collecting data on the difficulty of selling for each principal versus the revenue

each generates was a matter of concern for the company and the right amount of effort

was not being invested here which is a reason why sales projections were not being met.

BSI was giving good commissions to keep its workforce motivated but this was not beingtranslated into their performance as they were not working hard enough. The company

was taking less work from its employees which can eventually affect the yearly sales that

are generated. Moreover, the company was unwilling to assume the cost of hiring an

additional sales people and adamant over operating through a team of just four people.

According to the exhibits however, commissions for the major accounts are less than the

smaller accounts which refutes the main purpose of pursuing major accounts.


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Market saturation was estimated for both the companys principals which meant thatthere was no room for new entrants, dynamism was dying down and so was the drive of

remaining competitive as far as this company was concerned. The company could not as

a result decide if it wanted to increase or maintain its principals. Swanson was a product

category that was neglected by the company. Their competitor took advantage of this and

captured their market share. Hence the companys market position has been negatively

affected by this as their products are being replaced by the competitors computerized

electronic equipment.

Franklin Key wanted BSI to take over their unattended account in Virgina but there were

many problems which were making taking this decision extremely hard. None of the

companys workers wanted to work there not only because the decision demanded

relocation but probably because large military accounts meant more work and a more

aggressive yet different sales approach. This meant taking responsibility and going an

extra mile which none of the workers were willing to do as this was asking for greater

attention and service too. Moreover, the company was confused between the dilemma of

hiring a new, local sales person with greater information and transferring existing

employees. The state was far away which meant that transportation and management

would have been more difficult.

Core problem

The core problem identified in this case is that they were expanding without taking into

account whether they would be able to meet their expenses or not. They had high non


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selling expenses, which led to decline in profits. Hence they are not focusing on how to

be able to cope up with this expansion.

Recommendations

The company should improve its sales force management efforts. They should focusheavily not only on establishing a secure backbone for the company by employing an

aggressive, skilled sales team but also take steps to retain it.

Larger commissions and discounts should be offered and to get rid of the attritionproblem, the company should keep the workers motivated by keeping their interests as

their top priority and ensuring they are sufficient monetarily.

Training and mentorship are the two principals which can form a solid foundation of anycompany. The companys key focus should be these two parameters so that the whole

workforce is on the same page and can work together as one cohesive unit.

To counter the dilemma of maintaining or increasing, it is recommend that the company

must retain the current principals and should take advantage of Swanson and Dickens as

they are the most favorable points on the difficulty vs. revenue table.

Reaching out to the Knox and Butler will promise high commission but there are chancesthat this might be offset by higher risk.

barro stichney inc

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