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Milford Case

Milford Industries is the world's largest manufacturer of tools and accessories, with $540 million in sales in 1982. Harry Oates has been promoted as the new District Sales Manager for the Capital District. There are issues with the previous manager including poor management, high turnover, lack of control, and poor salesperson performance. Oates analyzed the district and identified three salespeople - Sonny Caplan, Doug Eaton, and Tom Furness - as underperforming. He developed new performance metrics to evaluate and rank the salespeople to improve performance and allocate territories appropriately.

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Nitin Goyal
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346 views

Milford Case

Milford Industries is the world's largest manufacturer of tools and accessories, with $540 million in sales in 1982. Harry Oates has been promoted as the new District Sales Manager for the Capital District. There are issues with the previous manager including poor management, high turnover, lack of control, and poor salesperson performance. Oates analyzed the district and identified three salespeople - Sonny Caplan, Doug Eaton, and Tom Furness - as underperforming. He developed new performance metrics to evaluate and rank the salespeople to improve performance and allocate territories appropriately.

Uploaded by

Nitin Goyal
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MILFORD

INDUSTRIES
INTRODUCTION
World’s largest manufacturers HARRY OATES
of tools and accessories  Promoted as new District
Sales of 1982 amounted to Sales manager for Capital
$540 million District
 Hardworking Individual got
promoted in 3 years
3 Types of Sales Force
 Industry
 Private
 Commercial ($210 million in
82’)
Problems in Mild fords Industry

 Poor Management by previous district manager o Low moral.


 High turnover, when Milford’s turnover in low.
 Lack of control and discipline.
 Poor Performance by district salespeople.
 Sales were lower than its potential, for instance the district has 5,7%
of the potential sales in the nation, though the district only
accomplished 4,8% of Milford’s sales
After look at the district’s eight salespeople,
Oates found three problematic:
 Sonny Caplan – The results about his performance were not good
enough. He dedicates most of his time to open larger accounts,
without much success. Besides that, neglects some routine servicing
to existing clients and gives them little attention.
 Doug Eaton – He is slowing down because of his age and health
conditions
 Tom Furness – Recently he had some personal problems that were
affecting his performance Recommendation .
 The primary reasons for this underperformance are low employee
morale, high turnover and poor efficiency
Performance Metrics

 The performance metrics of sales agents has been developed on parameters namely:
Performance
 Efficiency
 Business
Finally these metrics should be assigned weightage and accordingly the sales agents are
ranked and suitable territories be allocated.
Performance
1. Sales H1 (83) to H1 (82)
2. The ratio compares sales in first half year sales in 1983 to that of 1982. This indicates the
performance of the sales agents. This would indicate the potential of the agent and the
ability to harness sales potential in an area. Higher the ratio better it is.
3. Sales/Active Account :This measures the sales skills of the agent, how far is the salesman able
to push his products to his clients. Higher the ratio better it is.
4. Active/Potential Accounts This compares the activity of the salesman, also measures
whether the sales agent is able to convert potential in to actual sales. Higher the ratio better
it is.
5. Sales per unit area of Territory This ratio measures the amount of sales over per unit area of
territory.
KEY PLAYERS

 EATON : Oldest person, not a quitter


 BURKE : Solid performer, sometimes lazy
 DURFEE : Solid performer, usually inactive at large stores
 HARLOW : Active supporter and advocate
 FURNESS : Facing Domestic Issues
 GIBSON : Uninterested, side business
 CAPLAN : Lack the willingness to work
 ALDERSON : Hard working, new recruit and calm
Commercial Sales Force Structure

National Commercial
Sales Manager (1)

Regional Managers
(3)

District Managers
Salespeople (103)
(12)
Capital District
Performance Indicators

Sales/Expense Active/Potential

224.39 0.6145

160.00 Active/Potential
0.4067
0.3477 Linear
0.3044
(Active/Potential)
82.43
49.44

EATON FURNESS GIBSON CAPLAN EATON FURNESS GIBSON CAPLAN


Performance Indicators

Sales per call Net Contribution

1.6429 535.86

1.1349 1.1915
351.3
322.04
0.7273 246.14

EATON FURNESS GIBSON CAPLAN EATON FURNESS GIBSON CAPLAN


Performance Indicators

Contribution Per Call

0.4784

0.3268 0.3426

0.2034

EATON FURNESS GIBSON CAPLAN


Weights According to Various Parameters

Parameter Weightage Eaton Furness Gibson Caplan


Most Sales in
1983 25% 2 1 2 4

High Margin
Sales 20% 1 4 3 4

Active/Potential 15% 3 4 1 2
Sales per call
(1982) 20% 4 2 3 1
Contribution per
call 20% 4 2 3 1
Score 2.75 2.45 2.45 2.5
Eaton Burke Durfee Harlow Furness Gibson Caplan Alderson
experience 1 3 6 4 5 2 7 8
commision 1 2 3 4 5 6 7 8
expenses 3 5 4 2 7 1 8 6
sales ratio 7 5 3 4 8 6 2 1
accounts 6 4 1 2 3 8 7 5
sales/active accounts 3 6 2 1 5 4 7 8
sales / calls 1 2 4 5 3 2 6 7
sales /expense 7 4 6 6 3 5 2 1
% of US retail sales 1 2 4 8 3 7 5 6
sales contribution 1 2 3 4 5 6 7 8
market penetration 5 2 5 7 5 4 1 3
buying potential vs sales 4 5 3 1 6 2 7 8
Stationary Metal Working 4 5 2 1 2 6 4 3
Stationary Wood working 4 7 1 2 3 6 5 5
Portable power 4 1 3 5 3 3 2 2
Hand tools 3 1 6 5 5 3 2 4
Mansosn 4 7 1 3 4 2 6 3
Measuring instruments 1 5 2 3 4 2 5 4
Recommendations

• Caplan and Furness should be put under probation.


• Major metric to assess Caplan’s performance should be improved contribution
margin as well as conversion of potential accounts into active accounts
• Furness’ major metric should be improved sales in the second half of 1983. The
major reason for his poor performance is his personal issues. For this Oates needs
to motivate him rather than pushing him to further distress as his historical
performance has been good.
• Gibson should be made responsible for mentoring and training other salespeople
like Caplan. This would help reduce training costs and also allow younger
salesforce learn from his experiences/contacts
• Eaton should be left on his own and instead given a newer area to prove himself.
THANKS!

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