Keshav Dewan FT163109

Milford Industries (Part A)

Problems with Capital District and salespeople
There were some major issues with the Capital District and the salespeople as given in the case.
As suggested on page 4, the previous district manager, Sam Goldberg, displayed very poor
performance. There was low morale among the salespeople. Lack of control in the capital district
was a major concern and the sales people were undisciplined. The Capital district had a high
turnover when the overall turnover of the Milfords Industries was low. Salespeople had
performed awfully in the 1982. As per Exhibit 2, Capital district saw sales of about 5.7% of the
nations potential sales, of which only 4.8% was managed by Milford. The sales growth in the
district was only 6.5% i.e. very low when compared to the regional or country average.
Sales force organization and deployment
As per the Falzaranos memo on the salespeople, Refer Exhibit 7, four of them seem to be really
problematic. Sonny Caplan, devoted most of his time to open large accounts, with poor results.
He neglected the existing clients and gave them less or no attention. Willingness to work was
missing. Second, Doug Eaton, due to age he is slow and not very healthy and is stubborn to give
up on his territory. Zeke Gibson is disinterested in Milford and more focused on his side business
while Tom Furness had domestic issues and lack of concentration on work. So clearly the
Salesforce was messed up.
Current deployment and information as calculated from Exhibits 2,3,4,5,6,7 can give some
interesting insights:

Age and experience wise, Eaton is the oldest and Alderson is the youngest salesperson
Durfee is the only Female employee.
Eaton has the highest salary and commission while Alderson has the lowest
But the salary to commission ratio for is best for Durfee and worst for Gibson.
Expenses claimed most by Caplan and least by Gibson.
Considering the expenses versus compensation data given in Exhibit 4, the most
expensive employee is Eaton while Alderson is the least expensive employee.

Recommendation for Oates to eradicate the above problems

If I were Mr. Oates, the main focus will be to eradicate main reasons of the underperformance in
the district and the problems listed above. Low employee morale, High turnover and poor
efficiency will be my main focus areas. But to achieve my goals, I will first utilize the data at
hand to draw insights on the current situation and what can be done. Measuring performance of
each salesperson would be my first step. Consider Exhibit 1 to 7 data I will draw following
insights:-

Milford Industries Case Write-up

Keshav Dewan FT163109 Section A

Keshav Dewan FT163109

For this let us consider the Exhibit 1 data, Comparing the 1982 and 83 sales for first half,
improvements in terms of growth was shown only Durfee, Harlow, Caplan and Alderson.
Sales Ratio (82 vs. 83) shows best growth by Alderson and worst by Furness.
On Active to Potential accounts ratio, Durfee was the best with 9% while Gibson was the worst
with only 7%.
Sales and active accounts ratio shows Harlow as best as Alderson as worst in terms of growth.
Sales per call gives Eaton as best and Alderson as worst in terms of growth.
Sales per expenses ratio show Alderson as most profitable employee while Eaton as least
profitable.
Consider the buying power index Eaton has most favorable while Harlow is the least.
So going on with these insights I would ask Gibson to quit and split his territory among Alderson
and Durfee.
I will deploy sales people according to their selling strengths in the product line. Refer Exhibit 5,
I will calculate all the specific product line data and assign people across territories accordingly.
Durfee has been the best in stationary woodworking and masons so will be given more of that
domain territories. Similarly Harlow has the best sales in stationary metal woodworking, while
Burke in portable power and hand tools, and Eaton in measuring instruments.
Apart from the above measures, I will start training programs for the sales persons to acquire
new strengths and develop niche areas.
I will introduce new compensation and attractive commission schemes to drive the sales targets.
I will increase employee engagement activities to boost the morale of the employees.
I will also interact and bond with the salespersons personally to create a personal relationship
and boost morale and employee satisfaction.

Milford Industries Case Write-up

Keshav Dewan FT163109 Section A