MINICASE: WEST MIDLANDS RESTAURANT APPLIANCES
West Midlands Restaurant Appliances (WMRA), headquartered in Birmingham, UK, sells large, industrial appliances such as refrigerators, freezers, and dishwashers to restaurants all over Great Britain. For several years, the company has been second in UK market share to industry leader Thames Restaurant Services, but it has been gaining share in recent years.
WMRA is especially optimistic about catching Thames this year because of the rise of its star sales manager, David Epstein, an energetic 31-year-old who has been with the company since he was 22. Epstein is popular with the sales staff, but he also is aggressive and demands high performance. One of his initiatives is to make all salespeople accountable by strictly evaluating performance using ratios as well as purely objective measures. In particular, he has collected performance data for each of his seven sales representatives as follows:
Epstein would like to see an analysis of salesperson performance using the following ratios: sales growth, sales to quota, sales per account, average order, sales expense, calls per day, orders per call.
Most of the salespeople are happy to be evaluated, but a few are dubious and fearful of the consequences. Robert Smythe, for one, feels that his territory, which includes some of the more rural areas in western England is more difficult to sell in because there are fewer restaurants and he has only been a salesperson for about a year. In addition, one of Derek Francona’s largest customers recently went out of business, and he feels that his numbers slipped as a result. Both are close to quitting because they feel they are being evaluated unfairly.
Epstein wants to beat Thames very badly this year and feels that improving salesperson performance is the key. Therefore, his performance evaluation system is of the utmost importance.
Exhibit 13.2:
1. From page 433, use (current sales-previous sales)/previous sales to calculate sales growth and (current sales-current quota)/current quota to calculate sales to quota for each sales Rep. Use the formulas provided in Exhibit 13.2, on page 410, to assist in completing the remaining categories of the spreadsheet in the Data Used tab.
2. Rank order all of the sales representatives in each category, then summing the rank orders across for each representative, come up with a ranking. For example, Erin ranks 1st in sales growth, 2nd in sales to quota, 5th in sales per account, and 6th, 4th, 1st, and 2nd in the remaining category for a total of 21 (1+2+5+6+4+1+2=21). Doing a similar exercise for the remaining sales people results in a ranking, from best to worst.