Reference no: EM133298542

Sales Actions Software, Inc. sells time and territory management solutions targeted at small to medium size companies that cannot afford well-known brands of sales force automation (SFA) or enterprise software, such as Adobe Systems and Salesforce.com. Mary Collins, Sales Manager for Sales Actions Software, Inc., has been asked by the president to review and evaluate the motivational approaches used with the sales force. She believes the approaches used - social media messaging, sales contests, sales meetings, podcasts, newsletters, individual recognition, and targeted group sales training - make Sales Actions Software a desirable place to work. The president expressed some concern about how expensive a couple of the approaches were, however, such as sales meetings (because of the travel expense and loss of sales time) and podcasts (because of the production costs).

In the past few years Sales Actions Software has experienced annual increases in sales in excess of 12%, but the gross margins on the various products range from 5 to 18%. The wide variations in gross margins and the perceived high cost of selected motivational approaches led the president to ask Mary to review her budget and suggest ways to consolidate and reduce expenses.

Mary first separated the motivational approaches into financial and nonfinancial. She believed the financial motivators were "the cost of doing business" and included commissions, bonuses, and sales contests. In contrast, sales meetings, podcasts, recognition, and targeted group sales training were nonfinancial motivators. Because she believed the financial motivators represented "the cost of doing business" and were directly tied to sales, less emphasis was placed on reviewing them. Sales Actions Software holds one annual national sales meeting and five regional sales meetings. The national meeting is always held at an exclusive resort, usually in early June.

The last five years were held at Colonial Manor, Williamsburg, Virginia; the French Quarter in New Orleans; Harrah's Club, Lake Tahoe, Nevada; Disney World, Orlando, Florida; and the hotel Westin, Maui, Hawaii. The meetings start on Tuesday, last three days, and are considered an excellent way to announce new products and significant product line extensions. All of Sales Actions Software's top management and board of directors attend, with the daytime devoted to business discussions and the nighttime set aside for recreation, except for one evening banquet. The national meetings are attended by approximately 120 people, and the number in attendance has been increasing by about 10% a year in the last five years. The meetings are expensive and require a lot of effort to plan. In contrast, the regional meetings are somewhat more productive and much less expensive, primarily because of the lower transportation and lodging costs and the fewer distractions.

The effectiveness of both the national and regional meetings needs to be evaluated. Ms. Collins has reviewed the two types of meetings and is considering several alternatives:

• Change the format of the national meeting to include technical instruction, thus eliminating the need for regional meetings.

• Eliminate nighttime recreational activities.

• Hold meetings at less expensive locations, particularly national meetings.

• Send fewer top management personnel.

• Discourage relatives from attending national sales meetings.

• Make the national meeting a reward for superior sales performance thus limiting the number of attendees. The recognition approaches also needed to be reviewed. One program, referred to as "Pacesetters," recognizes the top-five pacesetters in each region. On a monthly basis the pacesetters, who are crowned the "Fabulous Five," are given recognition at monthly banquets, in the newsletter, and on the website. At the end of the year, a national "Fabulous Five," is identified and awarded a trip to company headquarters to meet with and be recognized by senior management. Other smaller programs include plaques, rings, and certificates for outstanding performance or identifying major new prospects. Two types of training are used - individual training using podcasts and group training at monthly and regional sales meetings. Collins was influential in adding podcasts as a training method and also heavily involved in developing recent group training content and approaches.

She is therefore finding it difficult to objectively evaluate these areas. The podcasts have been popular and frequently used based on the number of salespeople that have downloaded them. But the production costs are relatively high. There is no formal mechanism for evaluating their effectiveness. The group training topics included job descriptions, job analysis, sales techniques, and planning, and were directed more toward new recruits than experienced sales people. She sent out a lengthy questionnaire to evaluate these but the response rate was low. The reviews she received as well as informal feedback suggested the salespeople perceived the group training to be incomplete, inconsistent, and generally not very effective.

As Collins reviewed the various motivational approaches, she realized it was difficult to measure the effectiveness of any of the nonfinancial factors. Several senior managers argued it was foolish to continue spending on "frills," but Collins believed that in the software industry reputation and image are very important, not only in making sales, but also in attracting quality salespeople. In fact, Collins felt to some extent that an increase in the budget might be needed instead of a reduction, and that the more important issue might be how the budget is being spent instead of the size.

Question. What kind of system could be developed to evaluate the intangible, nonfinancial motivational factors, and how might it be implemented at Sales Actions Software?