Marketing Management-II

Case Analysis

Eureka Forbes Ltd:

Managing the Selling Efforts (A)
I. Case Facts

EFL products targeted health and safety of consumers and their homes reflected a corporate
vision that embraced the customers as A friend for Life.

To increase the number of targeted calls relative to cold calls the company also began to build
a comprehensive customer database.
Their selling model was one of direct-sales through a network of home-groomed
EuroChamps who went door-to-door, making cold-calls, organizing demos, addressing
consumer apprehensions, helping them get the most out of Eureka Forbes products and
closing sales.
EuroChamps were recruited in a number of ways- recruiting sessions held through the year,
campus recruitments, career fairs, employment exchanges and EFLs Friend-Get-A-Friend
Scheme which was essentially a referral process where existing salespersons could
recommend friends for the role.
Training included the My first week at EFL session which included classroom training as
well as shadowing of current sales reps.

The Current System

The selection of the EuroChamps was not based on academic criteria. It is mainly
based on the subjective judgements of the people. Due to this it may be possible that
an efficient EuroChamp may not be recruited due to poor judgement skills of the
recruiter.
Training received was not apt and was certainly inadequate. They focused how to
increase the customers, but they ignored the art of responding to the customer
objections.
The commissions were directly related to the sales.
Less attention given to building customer relationships.
The job is a very high pressure job. Too much emphasis on target sales have led to
psychological pressure on the sales reps.

The New compensation system- Bettering the Best:

The New compensation system was designed to give award points to the sales person for
successful completion of various stages of selling process, like making a call, giving a demo,
closing the sale etc. The compensation was linked to the points scored by the salesperson.
The scheme also included daily recognition of the EuroChamp couple with a maximum
monthly reward of Rs.500.

II. Identification of Issues

1. The current compensation system at Eureka Forbes compensation rewarded was

directly depended on the number of confirmed sales by a EuroChamps
Achieving maximum sales was the sole objective, how it was achieved wasnt
emphasized upon
2. The new system faced a lot of criticism from managers and was very different from
the existing one.
Implementation of the new system would rely heavily on the leadership of his senior
managers and the sales management team that had come up through the ranks on the
basis of the old system might not be up to the task

III. Analysis of the identified issues

1. EuroChamps missed easy sales just going through the motions mechanically and
seemed focused on completing their demo.
2. Due to lack of proper training the EuroChamps repeatedly missed prospects
signalling their interest to buy
3. Demo equipment was damaged or not cleaned
4. The art of responding to customer objections had been neglected in EuroChamps
training

Option 1: Continuing the current system

The Current Compensation System

Pros
Result oriented as commission is impacted
by sales
Direct contact with the customer and no
limit on to the commission on can earn
Recognition of high achievers through
membership in exclusive clubs with awards
and paid holidays
Cons
How a sale is achieved was not focused upon
EuroChamps focused more on completing
the daily goals than addressing the concerns
of customer or building relationships
If a EuroChamps is not able to convert sales
he would lose compensation leading to low
confidence and forcing him to quit
Option 2: Bettering the Best

Bettering the best

Pros
Focus on individual processes of sale
Importance of every stage will ensure that
no unfair means are adopted by more
experienced EuroChamps
System would serve as a morale booster for
the team
Stage based reward system leads to rewards
even without sales thus improving
confidence of even those who arent able to
confirm sales
Lower attrition rate can be achieved
Cons
Focus will shift from making sales to earning
higher points
Non-performers would be rewarded, are
there no limits to points that they can earn
and are all points leading to monetary
rewards??
Might demoralize EuroChamps putting extra
effort to convert sales, may be old ones. If
new ones how?
Daily monitoring and tallying points
required considerable time in
paperwork.Cant you computerise these?
EuroChamps may inflate their record while
self reporting as it is impossible for a sales
manager to keep track of all elements of
every EuroChamps selling efforts. Limits
are possible
Current financial rewards linked to point
system are too small

IV. Recommended Solution

Considering the cons associated with both the systems and Goklaneys wish to move
EuroChamps away from worrying about how much they sell to how they sell so that the firm
emphasizes on customer retention and referrals over customer acquisition it is imperative to
implement a new system which avoids the limitations of Bettering the Best while still
retaining the idea behind it.