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    1) Analyse Case Facts and Identify The Problem Area

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    aakash.nsit
    FedEx is facing increased competition and is integrating its express and ground sales teams through a project called ARISE. This will require redesigning the compensation plans for the sales force. Currently, the express and ground plans have some differences. Express plans have quarterly sales goals and provide 70% salary and 30% incentives and bonuses. Ground plans have more difficulty signing clients and consider package yield in addition to revenue goals. They provide 82% fixed salary. The new compensation plan should provide 75% salary and 25% incentives with goals for both express and ground contracts. When designing the sales process, decisions need to be made regarding changes to sales force, territories, training, reporting, and staffing.

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    1) Analyse Case Facts and Identify The Problem Area

    Uploaded by

    aakash.nsit
    6K views3 pages
    FedEx is facing increased competition and is integrating its express and ground sales teams through a project called ARISE. This will require redesigning the compensation plans for the sales force. Currently, the express and ground plans have some differences. Express plans have quarterly sales goals and provide 70% salary and 30% incentives and bonuses. Ground plans have more difficulty signing clients and consider package yield in addition to revenue goals. They provide 82% fixed salary. The new compensation plan should provide 75% salary and 25% incentives with goals for both express and ground contracts. When designing the sales process, decisions need to be made regarding changes to sales force, territories, training, reporting, and staffing.

    Original Title

    Sales Force Integration at Fedex

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    FedEx is facing increased competition and is integrating its express and ground sales teams through a project called ARISE. This will require redesigning the compensation plans for the sales force. Currently, the express and ground plans have some differences. Express plans have quarterly sales goals and provide 70% salary and 30% incentives and bonuses. Ground plans have more difficulty signing clients and consider package yield in addition to revenue goals. They provide 82% fixed salary. The new compensation plan should provide 75% salary and 25% incentives with goals for both express and ground contracts. When designing the sales process, decisions need to be made regarding changes to sales force, territories, training, reporting, and staffing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    6K views3 pages

    1) Analyse Case Facts and Identify The Problem Area

    Uploaded by

    aakash.nsit
    FedEx is facing increased competition and is integrating its express and ground sales teams through a project called ARISE. This will require redesigning the compensation plans for the sales force. Currently, the express and ground plans have some differences. Express plans have quarterly sales goals and provide 70% salary and 30% incentives and bonuses. Ground plans have more difficulty signing clients and consider package yield in addition to revenue goals. They provide 82% fixed salary. The new compensation plan should provide 75% salary and 25% incentives with goals for both express and ground contracts. When designing the sales process, decisions need to be made regarding changes to sales force, territories, training, reporting, and staffing.

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    1)Analyse case facts and identify the problem area.

    This case talks about FedEx corporation, its growth from 80’s and the current
    concerns and competitions faced by FedEx. They started overnight delivery
    of packages through a dedicated air network. This service was in high
    demand till improved SCM and JIT demanded for lower cost ground
    deliveries. Along with the express and ground delivery services(after
    acquiring RPS) they also provided other services such as: less than truck
    load, niche services, non step ground services for private clients, consulting
    services for logistics, transportation and other SCM needs. The company was
    considered as highly innovative company. However due to increased
    competition by other competitors FedEx is now thinking of integrating its
    express and ground sales force teams. For this they have initiated an
    internal project called ARISE which included marketing and sales unit and
    customer facing IT units of ground and express to be combined. They require
    a single account executive offering both air and ground delivery services i.e.
    needed single value proposition for both express and ground package.

    Thus current concern faced by executives and management of FedEx is


    project ARISE and redesign of compensation plans of the sales unit force.

    2)What should the compensation plan for the sales force look like ?

    The compensation plan of an average account executive should be


    comprised of 75% salary(fixed) and 25% incentives(variable). Also, monthly,
    quarterly, and annual incentives and bonuses based on goals achievement
    should be carried out. Revenue goals may be set different for express and
    ground contracts, but basic structure of the sales force should remain
    equivalent. Percentage compensation on the basis of revenue achieved
    (annually) can also be one of the options that can be included in the
    compensation plan.

    3)Why are the express and ground plans different ?


    For express plans:

    Sales goals occurred on a quarterly basis. The minimum performance to plan


    that qualified for a bonus was 96% of one’s planned sales objective. In
    addition to the cash incentives, account executives also competed for sales
    awards e.g. President’s Club was awarded to top 5% of account executives.
    Their major compensation consisted of 70% salary with an additional 30% in
    incentives and bonuses.

    For ground plans :

    The customer base was small unlike express. Also signing new clients was
    somewhat difficult. Here package yield (average revenue per package) was a
    key component of a ground account executive’s sales objectives in addition
    to total package revenues. These people had some ‘activity targets’ like at
    least 4 lunches and one entertainment per month with existing or potential
    customers. Their plan comprised of 82% from fixed salary. In order to qualify
    for incentive compensation, they had to reach a minimum of 50 % of their
    plan.

    4)What is designed sales process in terms of sales force?

    The design of the sales process should be comprised of :

    1)Compensation

    2)Structure

    3)Skills

    In terms of sales forces, following decisions needs to be taken before


    designing the sales process :
    1.Sales force changes.

    2.Territory changes

    3.Trainig course changes

    4.Special reporting

    5.Staff to fire.

    These decisions would help to formulate the process in terms of sales force.
    The design should also be done keeping in mind the size and structure of the
    objective of the concerned company.

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