AMARILLO BRILLO INDUSTRIES

 

Amarillo Brillo Industries is one of the larger manufacturers of tools and accessories in the world.  The company sells hand and power tools to B2B customers through three different sales forces.   One of these sales forces is the commercial sales force.  This group calls on retailers, including department stores, hardware stores, and discount stores.

 

Commercial sales reached $525 Million in 2018.  The commercial product line consisted of the following products:

1. Stationary metalworking power tools
2. Stationary woodworking power tools
3. Portable power tools
4. Hand tools
5. Masonry tools
6. Measuring instruments

The national commercial sales manager, Ukaipha Heep, had three regional managers who reported to him.  These supervised 12 district managers who were responsible for 103 sales representatives.  The Waco district consisted of eight sales representatives.

Heep was under pressure from the CEO of Amarillo Brillo to improve the performance of the Waco district.  Heep was not convinced there was a problem, but the CEO suggested he take a look at other information, external to the firm, that might shed light sales force performance.

In complying with the CEO’s request, Heep recently had learned something new.  He had recently attended a seminar at which the speaker talked about a Buying Power Index.  The buying power index (BPI) reports current data by metropolitan area, state, and region. Statistics such as retail sales by merchandise category, personal disposable income, and five-year projections are included in the survey. The BPI identifies these market factors and correlates them with the area’s potential for these factors, and then combines the factors and their potential into a weighted index. The index is based on the area’s share of the nation’s disposable personal income, retail sales, and population.  Heep was particularly interested in the speaker’s summation of the BPI – “larger numbers suggest more market potential.”  Simply put, the larger the index, the greater the buying power in an area.

 

Given the following information, develop a performance evaluation program for the eight sales representatives in the Waco district.  As you are doing this, you have been asked to evaluate the performance of the eight sales representatives.  Your analysis should conclude with the following:

1. Using the data in Tables 1-7, develop a Sales Performance Plan (conceptually), that is based on the information provided in this scenario. Specifically, what metrics would you use and provide a one sentence description that expresses your reason for choosing each metric.  What does the metric tell managers?  Once you have that, give consideration to other information you would like to have to conduct an objective, thorough performance assessment.
2. Based on your Sales Performance Plan, evaluate each sales representative and create a summary rank ordering (based on quantitative and qualitative information) of the eight Waco district sales representatives with appropriate rationale for your ranking.
3. What corrective actions (positive or negative) based on your analysis, would you take? Provide some insight into leadership skills and change management skills that would be useful in communicating your corrective actions.

 

TABLE 1

Sales performance: Waco district – 2018

 

Sales Rep	2018 Sales (000)	Percent of District	First Half 2018 Sales	Percent of District	2018 Active Accounts	2018 Sales Calls
Madden	4600	0.182	2200	0.182	205	1120
Lill	4000	0.159	2100	0.174	310	1350
Johnson	3750	0.149	1650	0.136	160	1470
Hunt	3250	0.129	1700	0.140	120	1525
Caballero	3050	0.121	1350	0.112	220	1075
Dunn	2800	0.111	1300	0.107	130	940
Moore	2220	0.088	950	0.079	307	1210
Davis	1550	0.061	850	0.070	458	1640
TOTAL	25220		12100		1910	10330

 

TABLE 2

Compensation and Expenses

Waco District – 2018

 

Sales Rep	Salary (000)	Commission (000)	Total (000)	Expenses (000)	Total (000)
Madden	60.3	38.4	98.7	8.1	106.8
Lill	56.1	36.1	92.2	10.8	103
Johnson	51.9	35.2	87.1	8.3	95.4
Hunt	54.1	33.5	87.6	7.9	95.5
Caballero	53.9	32.2	86.1	11.4	97.5
Dunn	55.3	31.2	86.5	6.5	93
Moore	49.5	28.8	78.3	12.9	91.2
Davis	47.5	26.9	74.4	11.3	85.7
TOTAL	428.6	262.3	690.9	77.2	768.1
AVERAGE	53.58	32.79	86.36	9.65	96.01

 

TABLE 3

Territory Data

Waco District – 2018

 

Sales Rep	Number of potential Accounts	Buying Power Index	Land Area (sq. Mi.)
Madden	504	.9407	1806
Lill	525	.8142	9045
Johnson	185	.5790	1301
Hunt	139	.4345	61
Caballero	358	.9061	4239
Dunn	427	.4798	6524
Moore	883	.7159	24070
Davis	933	.7945	28738
TOTAL	3954	5.6647	75784
AVERAGE	494	.7081	9473

 

 

 

 

 

 

TABLE 4

Dollar Sales by Product

Waco District – 2018

 

Sales Rep	2013 Sales (000)	A	B	C	D	E	F
Madden	4600	140	735	1335	1790	140	460
Lill	4000	40	160	1800	1800	0	200
Johnson	3750	265	750	1240	750	370	376
Hunt	3250	260	585	910	1035	165	295
Caballero	3050	215	520	1035	945	90	245
Dunn	2800	85	335	950	1035	170	225
Moore	2220	0	220	705	835	175	220
Davis	1550	45	215	545	880	30	80
TOTAL	25220	1050	3520	8520	8870	1140	2100

 

TABLE 5

Percent Dollar Sales by Product

Waco District – 2018

 

Sales Rep	2013 Sales (000)	A	B	C	D	E	F
Madden	4600	3	16	29	39	3	10
Lill	4000	1	4	45	45	0	5
Johnson	3750	7	20	33	20	10	10
Hunt	3250	8	18	28	32	5	9
Caballero	3050	7	17	34	31	3	8
Dunn	2800	3	12	34	37	6	8
Moore	2220	0	10	32	40	8	10
Davis	1550	4	14	34	35	5	8
TOTAL	25220

 

TABLE 6

District Performance

Amarillo Brillo Sales – 2019

District	Buying Power Index	2018 Sales (000)	Percent 2018 Sales	First Half 2019 Sales	Percent 2019 Sales	2019 Sales as % of 2018 sales
Waco	5.66	25200	4.8	12065	0.0443	0.479
2	8.43	48250	9.2	27105	0.0995	0.562
3	8.58	51700	9.8	30590	0.1123	0.592
4	9.43	42200	8	18710	0.0687	0.443
5	11.51	69100	13.2	34465	0.1266	0.499
6	5.83	26950	5.1	15590	0.0573	0.578
7	3.99	21900	4.2	9825	0.0361	0.449
8	10.64	40850	7.8	21090	0.0775	0.516
9	10.71	58950	11.2	30525	0.1121	0.518
10	8.43	52100	9.9	27040	0.0993	0.519
11	12.21	66600	12.7	35210	0.1293	0.529
12	4.58	21200	4	10080	0.0370	0.475
Total	100	525000		272295
Average	8.33	43750		22691.25

 

 

TABLE 7

PERSONAL DATA

1. Davis – Joined sales force in 2003. Is 25 years old. Before she arrived, her territory was a problem.  Is not very aggressive in her sales approach.  Has opened and re-opened many new accounts, most of which are small.
2. Lill – He is a solid performer, but refuses to sell our most profitable products. Has been with Amarillo Brillo, and in the same territory, for fifteen years.  Is in his early forties, has the classic sales personality, but is somewhat lazy.
3. Moore – He is thirty one and has been in his territory for two years. Appears unwilling to work hard, concentrating on opening large accounts, but not being very successful.
4. Johnson – Has been with Amarillo Brillo for five years. Aged, forty two, she came from a smaller competitor.  Appears to be active with smaller accounts, but not very active with larger accounts.
5. Madden – A long-term strong performer. At age sixty two, he has been with the company for thirty one years. He is slowing down due to age and health.  His territory was decreased two years ago and he reacted violently.  Is popular with buyers.
6. Caballero – At one time was a solid performer, but is now having severe problems. Is drinking heavily. Eight years of experience with Amarillo Brillo.
7. Dunn – Appears to have other interests besides Amarillo Brillo. Other interests have made him financially sound.  Has been a good performer for twenty years.
8. Hunt – A plugger. An average guy in his late thirties who has been with Amarillo Brillo for twelve years.