STEPSMART FITNESS

SUBMITTED BY: GROUP 9

 5C’s Background Analysis
COMPANY CUSTOMER COLLABORATORS CONTEXT

● Manufacturer of ● Private clubs ● Big box retailers ● US health club

exercise ● Home consumers ● Sporting equipment industry was
● Universities retail chains highly fragmented
equipments
● Training facilities ● Online retailers ● No established
● 18% share ● Residential market leader
● Products:: Retail property managers
(65%), Private and ● Fee-based health
Institutional clubs
(7.7%),
Commercial
Products (29.3%)
● Product Line:
Cardio, Strength,
Technology, small
exercise
equipment
Problem Statement
● The BPI indicate that the purchasing power of the district was 7.49% but Stepsmart
was able to generate only 5.14% of the sales in 2011
● If Cooper succeeds in achieving the targeted revenues, then he’ll receive a bonus of
2% of the sales, but if he fails to achieve the target then it may lead to a loss of 50%
of salesforce

How to increase the sales and achieve the target of improving the sales by
7.49%? Would termination result in achieving the goals?
Alternatives
● Probation or providing guidance to its employees without terminating anybody
● Terminating Foster
● Terminate Concetta and Avery
● Hire New Salesperson
 Evaluation
Commercial Estimated
# of Buying Regional
Potential 2011 Active Power Population Commission Total Expected 2011 Calls
Salesperson Accts Accounts* Difference Index (000) Land Area Salary s Compensation Expenses 2011 Sales Sales Difference per year

Ellis 421 215 206 1.27 3,720 1,700 $ 93,753 $ 76,707 $ 1,70,460 $ 14,800 $ 19,91,493 2343150 351657 830
Barrow 515 275 240 1.80 2,995 5,543 $ 57,630 $ 55,370 $ 1,13,000 $ 23,900 $ 17,06,994 3321000 1614006 1,370
Hammond 250 230 20 0.8 4,703 200 $ 54,808 $ 50,592 $ 1,05,400 $ 17,918 $ 15,17,328 1476000 -41328 1,400
Foster 475 230 245 0.97 1,320 9,350 $ 48,807 $ 46,893 $ 95,700 $ 27,753 $ 14,22,495 1789650 367155 902
Gibbons 450 140 310 0.63 1,662 2,817 $ 48,600 $ 32,400 $ 81,000 $ 10,500 $ 13,27,662 1162350 -165312 955
Concetta 600 210 390 1.08 1,217 12,212 $ 32,960 $ 31,040 $ 64,000 $ 31,700 $ 8,53,497 1992600 1139103 820
Avery 560 304 256 0.94 599 35,385 $ 30,274 $ 27,946 $ 58,220 $ 29,400 $ 6,63,831 1734300 1070469 1,158
Total 3,271 1,604 7.49 16,216 67,207 $ 3,66,832 $ 3,20,948 $ 6,87,780 $ 1,55,971 $ 94,83,300 13819050 7,435

On analysing the number of active accounts, number of phone calls made per year, the difference between the expected sales and sales
made, the expenses done and the area covered, we see that,
● Concetta and Avery have performed very poorly, they have maximum difference between the expected sales and the sales made,
the maximum expenses, maximum difference in the active accounts and the potential accounts, even after doing a hefty
expenditure.
● Foster’ s performance is also on the same line after Avery and Concetta
Evaluation of Alternatives
Alternatives Pros Cons
Guidance to employees ● Increase efficiency of employees ● Cost of training the employees
● Increased productivity

Terminating Foster ● Due to his declining sales performance, he can ● He is an above average
be kept on probation or be terminated performer
● Sales performance decline was
due to personal problem
● He can be guided to achieve the
set target

Terminating Concetta and ● They are the low performers compared to others ● Avery has a strong rapport with
Avery ● Avery doesn't focus on innovative ideas to grow established clients
business ● Concetta know the product and
● Some clients were dissatisfied with Concetta easily communicate with the
clients

Hiring New People ● It will improve the quality of sales force and help ● It will increase the cost of
in improving the target at a better pace coaching and training the hired
people
Recommendations
As Cooper should get the “ the right people on the bus, the wrong people off the bus and the right people in the
right seats”
● Terminate Concetta and Avery, keep Foster on probabtion
● Duties of the sales team should be rearranged according to their performance
● They should be trained in the areas they lack
● Changes should be made in compensation program as currently additional opprotunities existed for
employees who exceeded territory performance:
● In number of active accounts
● No of calls per year
● Assign a larger area to Hammond
● Territory alignment is necessary
● Divide the territory of Barrow
● Hire 2-3 new employees to compensate for Concetta and Avery