Reference no: EM132308479

Currently, Action Ambulance follows the standard model in the industry, using its account managers, who in addition to serving current customers, spend some of their time trying to develop new accounts. At conferences, the account managers meet with representatives of health care providers who are con- sidering switching ambulance companies and with their current customers to land more of their transportation business. Cur- rently, the account managers have no goals for landing new cus- tomers or increasing sales and are paid straight salaries with no commissions.

Woronka has considered retraining the company’s existing account managers to use more aggressive direct-sales techniques. Even though doing so is the least expensive option, he is concerned that the managers may not have the skills or the motivation to become part-time salespeople. Adding to their job duties also runs the risk that they will spend less time providing quality service to existing customers.

Woronka wonders whether hiring a full-time sales representative to generate new sales would be worth the additional cost, which he estimates would include $100,000 in salary plus a commission and 30 percent for benefits. “Many people say that you can’t sell ambulance services,” he says, “and that we are crazy to want to do things differently.” If Woronka hires a sales repre- sentative, that person would report directly to him, which creates another potential problem because he has no sales experience.

Another option is to hire both a sales representative and a sales manager, whom he estimates would be paid $150,000

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in salary. That would add to the company’s cost structure, but the sales representative and the two current account managers would report directly to the sales manager, giving Woronka more time to focus on his duties as CEO.

If Woronka decides to hire a sales representative, he won- ders how he should design the job. How many sales calls should the rep make each week? How much should he expect the sales rep to generate in new sales each year? What type of base salary and commission structure should he establish? From a broader perspective, how would potential customers perceive a sales rep- resentative selling ambulance services in an industry that tradi- tionally has not used sales reps?

1. Should Woronka retrain the company’s existing account managers or hire a sales representative? Should he hire a sales manager? Explain the advantages and the disadvan- tages of each option.

2. If Woronka hires a sales representative and/or a sales man- ager, how should he design the job? What system should he put in place to make sure that the sales representative produces results?