fedex sales force integration - example of how to do3

8/10/2019 FedEx Sales Force Integration - Example of How to Do3

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Case 1Sales Force Integration

at FedEx Corporation:A Case Presentation Example

For Marketing 458 Sales Management

Team Members:

Doug Vorhies

Jimmy Buffett

Mac MacNally

The Coral Reefers


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Outline

Situation Analysis

Assumptions and Missing Information

Problem Definition Analysis of Alternatives

Recommendations


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Situation Analysis

Recent acquisitions of freight firmshas lead to multiple FedExSalespeople calling on the sameaccount.

Need for unified approach tocustomers

Project ARISE


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S.A. - Customers

Large Businesses (GT $40,000/yr)

Contractual lower price to customer.

Small Businesses ($6,000-40,000 rev.)

Try for contracts lower price to customer.


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S.A.- Market Offerings

Overnight packages

1, 2 or 3 day delivery

Money back guarantee on 1 day.

Ground

Freight services for large and often heavypackages.


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S.A. - Competition

Overnight:

UPS

Airborne

USPS

Ground:

UPS

Trucking firms


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S.A. Compensation

Express:

Revenue Targets w/ Bonus at 96% ofgoal

Primary focus on existing accounts.

Goals set by Corporate with adjustment

70% salary

Trips/Pres Club as incentive


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S.A. Compensation

Ground:

Revenue Targets + Activity Targets withbonus at 50% of goal

60% of incentive based on SP F/C

No adjustment

82% is salary

Bonus financial incentive only


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S.A. Pkg Rev.

Revenue per pkg

Year Overnight 2/3 Day Int'l Pref Ground

1999 14.34$ 9.93$ 41.87$ 5.36$2000 14.52$ 10.31$ 43.36$ 5.55$

Results for 2000 demonstrate that integrating the sales force maybe problematic due to less revenue attributable to ground.

-Express AEs might see comp. shortfall if quotas not realigned.-Ground AEs would see targets jump creating disincentive.


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S.A. -Sales Force Structure

Two Units Express and Ground

Express:

2,200 Account Executives (AE)

Ground:

800 AEs.

Both SF structures are hierarchical Multiple AEs call on client

No one AE as focus


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WWS

Global

Local/Natl

Field

Inside

Inside Telephone Sales

Worldwide 104 AcctsOver $10,000,000 Rev.

Global 237 Accts$1,000,000 -10,000,000 Rev.

Local/Natl 200 Accts$5000,000 - $1,000,000 Rev.

Field 600 Accts$40,000 -$5000,000 Rev.

Inside 60 Accts$6,000 - $40,000 Rev.

Inside Tel 211 AcctsBelow $6,000 Rev.

Express Structure


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National

Field

Inside

National 59 AcctsTop 500 firms

Field 616 AcctsMedium Size

Inside 155 AcctsSmall Custs and Prospectingfor new business

Ground Structure


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S.A.ARISE Impact

Will make dealing w/ FedEx easier.

Will integrate shipping systems

Designed to improve customer abilityto ship via FedEx.

Will give opportunities to integrate SF

More consultative selling

Move toward stronger relationship

Build importance of SF to customer


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S.A. Teams

Team selling can enable strongerservice knowledge by bringing groundand express knowledge to benefitcustomer.

How to compensate.

Role of inside sales?


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SWOT - Strengths

Overnight industry leader (46% Share)

Best on-time express performance

High brand recognition Consultative selling combined with

Industry leading technology bringsInnovative solutions to save customermoney.


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SWOT Weaknesses

Two Sales forces leading to twopoints of contact for custs.

Two SF structures & comp systems. Two shipping tech systems.

Weaker position in ground

Duplication of some operations (e.g.,2 sets of FedEx trucks ground andexpress.


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SWOT Opportunities

Market growth for O/N & Express

O/N growth at 6-8% (Ex 2)

Ground growth at 8-10% (Ex 2)

Cost savings from shipping systemsintegration (ARISE)

Build business when ARISE goes online.

Cost savings when ARISE goes online.

Cost savings from SF integration


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SWOT Threats

Commoditization of O/N business leadto reduced revenue.

Ground is commodity business. UPS stronger in ground.

Customer confusion due to two SF.

Customer confusion w/ two shippingsystems.

Business is impacted by bus cycle.


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Class Discussion

The presenting team is to stop theirpresentation at this point and give the classan opportunity to add to and discuss

issues. This is the time for the class to find what

the presenting team has missed.

I will be evaluating the class on their

analysis and ability to find problems orunidentified issues in the presenting teamspresentation.


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Assumptions/Missing Info.

ARISE will be successful

Top Mgmt support

Economy continues to grow SF is not able to stonewall changes


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Class Discussion

What have we missed.


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Problem Definition

Problems:

Different sales strategies

Different comp plans

Lack of coordination

Reduced opportunity for relationshipbuilding

Multiple customer touch points creatingconfusion

Increased costs


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Overall Problem

Need to integrate Sales Force to bringunified customer contact.


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Alternatives

1. Integrate current sales forces into one

2. Do not integrate but coordinate.

3. Maintain Status Quo not considered.


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Alternative - Integrate

Develop one point of contact

One shipping system (versus two today)

More focus on consultative selling

Build Ground Services Business

Compensation system for ground notdelivering.

SF Goals individually set/Targets too low?


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Recommendation Integrate!

Model comp system after Express lessdisruption to revenue.

But add Yield goal/incentive.

Redistribute territories where necessary

Cross Train Train on ARISE

Create sales support specialists to assist withtech integration.

Eliminate duplication in territories eliminatepositions in SF if necessary cost savings.

Maintain salary plus incentive model.

Cost savings can be realized from integration ofboth SF and ARISE.


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Class Discussion

What has the group missed in theiranalysis of alternatives?


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Questions about process?


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Other things for Class toRemember

Team Presentation Approx 30 Minutes ofpresentation time (not counting questions).

Individual 2 page (typed) case outline willbe turned in at the beginning of class byeach student (presenting team excluded). Hand in 1 copy and keep one for yourself.

You may discuss w/ your team but prepareindividually (we will check for copying).

Presenting team to give 5 T/F questions(with answers) to Dr. V. for inclusion onfinal exam.

Send Dr. V. copy of team slides (via email).

fedex sales force integration - example of how to do3

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