The South Korean K-pop band, BTS, is shattering linguistic boundaries and reshaping the global music industry. BTS became the first band in Billboard history to simultaneously top the Billboard Artist 100, Billboard Hot 100, and Billboard 200; and the sixth act to have four Billboard Hot 100 No. 1 singles in less than a year. A critical component of BTS's success has been the efforts of a vast network of very dedicated fans called the ARMY. How did BTS build and grow its devoted global fanbase? Could other artists or even businesses follow BTS's lead?
Rolex SA was one of the most successful watchmakers in the world. In recent years, the global demand for Rolex watches, especially the stainless-steel sports models, had dramatically increased, resulting in a supply shortage worldwide. The shortage in supply further increased the desirability of Rolex watches, leading to a significant increase in demand. High demand coupled with low supply increased prices in the gray and secondhand markets.
Kjell & Company was a Swedish retail electronics chain. The company's products consisted of home electronics and accessories. The company was noted for its excellent customer service and a fair "one-for-all" HR policy. Historically, the salespeople had been compensated by a fixed salary and a variable commission conditional on meeting a monthly sales quota. Anecdotal evidence suggested that the monthly-quota compensation scheme might have demotivated some salespeople toward the end of the month, as those who fell short early in a month simply gave up because they had no chance of meeting quota. Thus, to mitigate this problem, management proposed a shorter-temporal-horizon daily-quota scheme. The (A) case focuses on the decision faced by the CEO on whether to change the sales force compensation plan to a temporally shorter scheme and, if so, how to implement the change. The (B), (C), and (D) cases show the results of various metrics across different types of salespeople after the change in the compensation plan was implemented. The case series explores different ways to analyze data for inference about salespeople's behavior caused by a change in the compensation structure. Also, the case series shows ways to experiment with the compensation plan for causal inference.
Kjell & Company was a Swedish retail electronics chain. The company's products consisted of home electronics and accessories. The company was noted for its excellent customer service and a fair "one-for-all" HR policy. Historically, the salespeople had been compensated by a fixed salary and a variable commission conditional on meeting a monthly sales quota. Anecdotal evidence suggested that the monthly-quota compensation scheme might have demotivated some salespeople toward the end of the month, as those who fell short early in a month simply gave up because they had no chance of meeting quota. Thus, to mitigate this problem, management proposed a shorter-temporal-horizon daily-quota scheme. The (A) case focuses on the decision faced by the CEO on whether to change the sales force compensation plan to a temporally shorter scheme and, if so, how to implement the change. The (B), (C), and (D) cases show the results of various metrics across different types of salespeople after the change in the compensation plan was implemented. The case series explores different ways to analyze data for inference about salespeople's behavior caused by a change in the compensation structure. Also, the case series shows ways to experiment with the compensation plan for causal inference.
Nobel Ilac was a Turkish generic pharmaceutical company marketing more than 100 drugs in 20 countries and, as of 2017, had over 2,500 employees worldwide. Nobel had implemented a transformation strategy-more specifically, a customer segmentation plan-whereby the sales force had begun to use data to determine their call plans. As a result, it had improved sales performance, and its previously negative EBITDA had reached double-digit positive figures. Two key issues remained: 1) growth was not as high as desired; and 2) the sales force's voluntary turnover was very high. Given that the sales force was the only go-to-market channel, Nobel needed to do something to reduce employee turnover without affecting the positive trend in sales and profits. For many industries, personal selling is the primary and sometimes the only way that a firm can go to market. Hence, properly managing the sales force is a key to a firm's success. The case outlines the challenges of managing a sales force-in particular, how to decrease salespeople's attrition while also increasing growth.
Industry leaders should adapt to changes in the business context and consider different ways to grow. Advances in technology had shifted software demand to the cloud. As a result, Microsoft announced a strategic shift in direction from its existing 'Windows first' strategy to an 'AI/cloud first' strategy to capture the increasing demand for digital transformation solutions. In line with this change in the overall firm strategy, Microsoft had to come up with a viable go-to-market plan that would align its new commercial strategy with sales, partners, products, services, and customers in order to drive long-term growth without hurting current revenue or profits. The case outlines the challenges involved in transforming the sales strategy of a well-established firm to better serve customers.
Roush Performance manufactured and marketed factory-modified performance vehicles and high-end aftermarket automotive performance parts. Since its inception, Roush Performance had focused on building its engineering technology competency and diversifying its product portfolio to grow sales. Many of its engineers were proud to be on the forefront of technological innovations with the company. In contrast, Roush's marketing and sales divisions had a somewhat passive role. The sales culture was stagnant, and sales compensation, a key factor in motivating salespeople, had remained unchanged for 25 years. Sales compensation is one of the key elements in an organization's sales management strategy. It is used as a primary mechanism to motivate salespeople and represents the lion's share of a firm's expenditures. Sales organizations have to constantly update their compensation practices to continually motivate their salespeople as the firm's sales strategy changes to adapt to evolving market conditions. In 2018, Roush's growth was down, and its salespeople had become shortsighted and complacent. A new sales compensation plan seemed necessary to better align salespeople with Roush's goals. The case outlines the challenges of designing a new sales compensation structure that can better motivate salespeople. The case focuses on salespeople but can relate to other employees and, thus, applicable to general HR management.
Qualtrics was an online survey research platform and since the beginning, the company had relied entirely on an inside sales model-sales done remotely without face-to-face contact with clients. The low-cost inside sales model, along with an emphasis on a strong sales culture, had helped Qualtrics to grow rapidly. However, it needed to prepare for the next phase of its growth. The company decided to diversify its product portfolio and target different types of customers (enterprise clients). In accordance with this change, it recognized the need to revise the inside-sales-only model by adding a field sales component to better serve these customers. Many organizations often go through a turning point in their strategy to explore ways for growth. The case series outlines the best practices of scaling an inside sales model and the challenges involved in changing an organization's sales management and strategy to initiate future growth.
Qualtrics was an online survey research platform and since the beginning, the company had relied entirely on an inside sales model-sales done remotely without face-to-face contact with clients. The low-cost inside sales model, along with an emphasis on a strong sales culture, had helped Qualtrics to grow rapidly. However, it needed to prepare for the next phase of its growth. The company decided to diversify its product portfolio and target different types of customers (enterprise clients). In accordance with this change, it recognized the need to revise the inside-sales-only model by adding a field sales component to better serve these customers. Many organizations often go through a turning point in their strategy to explore ways for growth. The case series outlines the best practices of scaling an inside sales model and the challenges involved in changing an organization's sales management and strategy to initiate future growth.
Qualtrics was an online survey research platform and since the beginning, the company had relied entirely on an inside sales model-sales done remotely without face-to-face contact with clients. The low-cost inside sales model, along with an emphasis on a strong sales culture, had helped Qualtrics to grow rapidly. However, it needed to prepare for the next phase of its growth. The company decided to diversify its product portfolio and target different types of customers (enterprise clients). In accordance with this change, it recognized the need to revise the inside-sales-only model by adding a field sales component to better serve these customers. Many organizations often go through a turning point in their strategy to explore ways for growth. The case series outlines the best practices of scaling an inside sales model and the challenges involved in changing an organization's sales management and strategy to initiate future growth.
Medicetra MedTech Company is a dental equipment distributor and senior management is deciding whether to implement a new incentive compensation program for the sales force. For many years, Medicetra had paid salespeople only a fixed salary. Although the current plan of a straight salary seemed to be working favorably towards sales force retention salespeople had limited monetary incentives to sell more, as increased sales did not directly relate to increased pay. Management is leaning towards a change to a variable compensation plan that links performance with pay and is considering three options: 1) commission; 2) quota-bonus; and 3) commission plus quota-bonus plans. Which compensation plan would induce behavioral changes that would lead to better sales force performance but, at the same time, would appear fair to other employees?
Kjell & Company was a Swedish retail electronics chain founded in 1988 by brothers Marcus, Mikael and Fredrik Dahnelius. The company operated 84 stores, all company-owned, located mainly in the metropolitan areas of Sweden's most popular cities: Stockholm, Gothemburg and Malmö. The company's products consisted of home electronics, accessories for home electronics and cellular phones (e.g., networking accessories, headsets and phone cases), and parts for consumer electronics and appliances (e.g., semiconductors and switches). The company was noted for its excellent customer service and a fair "one-for-all" HR policy. The company had a direct sales force of about 350 in-store salespeople. The salespeople historically had been compensated by a fixed salary and a variable commission conditional on meeting a monthly sales quota. Anecdotal evidence suggested that the monthly-quota compensation scheme might have demotivated some salespeople toward the end of the month, as those who fell short early in a month simply gave up because they had no chance of meeting quota. Thus, to mitigate this problem, management proposed a shorter temporal horizon daily-quota scheme. The (A) case focuses on the decision faced by the CEO, Thomas Keifer, on whether to change the sales force compensation plan to a temporally shorter daily-quota scheme and, if so, how to implement the change-that is, whether to run a pilot study with the new plan (implementing it at a few selected stores) or to launch the plan at all stores simultaneously. The (B), (C), and (D) cases show the results of various metrics across different types of salespeople after the change in the compensation plan was implemented. The case series explores different ways to analyze data for inference about salespeople's behavior caused by a change in the compensation plan. Also, the case series shows ways to experiment with the compensation plan for causal inference.
Luminopia-a start-up founded in January 2016 by three Harvard College freshmen-uses virtual reality technology to treat amblyopia (more commonly called "lazy eye"), the single biggest cause of visual disorders among children. By February 2017, the three founders had raised $950,000 in angel funding and developed a prototype of their virtual reality product, which was in use in clinical trials at Boston Children's Hospital. As the founders prepare to bring their new medical device to market, they struggle with two key decisions: Should Luminopia create its own salesforce to sell its product or should it outsource? And how should the company price its device to maximize returns yet remain attractive to doctors, insurance providers, and individual patients?
Kjell & Company was a Swedish retail electronics chain. The company's products consisted of home electronics and accessories. The company was noted for its excellent customer service and a fair "one-for-all" HR policy. Historically, the salespeople had been compensated by a fixed salary and a variable commission conditional on meeting a monthly sales quota. Anecdotal evidence suggested that the monthly-quota compensation scheme might have demotivated some salespeople toward the end of the month, as those who fell short early in a month simply gave up because they had no chance of meeting quota. Thus, to mitigate this problem, management proposed a shorter-temporal-horizon daily-quota scheme. The (A) case focuses on the decision faced by the CEO on whether to change the sales force compensation plan to a temporally shorter scheme and, if so, how to implement the change. The (B), (C), and (D) cases show the results of various metrics across different types of salespeople after the change in the compensation plan was implemented. The case series explores different ways to analyze data for inference about salespeople's behavior caused by a change in the compensation structure. Also, the case series shows ways to experiment with the compensation plan for causal inference.
Janalakshmi Financial Services (JFS), an Indian microfinance institution, had grown rapidly by providing financial products to its main customer base, the urban poor. However, the company was facing several challenges. JFS's productivity was declining, and it was experiencing a high and above-market-average attrition rate in its sale force-i.e., the loan officers. In addition, the division of duties for origination and collection by the two types of salespeople-customer-relations executives for sales (CRES) and for collection (CREC)-was perceived as a problem for the company's social mission of serving the urban poor, as the salesperson-customer relationship had become transactional. Because the primary form of customer contact was through the loan officers, JFS needed to find a solution for improving the existing sales compensation system in order to establish a performance-focused culture and to lower the employee attrition rate. In addition, it wanted to explore the possibility of streamlining the duties of JFS's sales staff to eliminate any overlapping duties between the two different types of loan officers (CRES and CREC), and sought to align employees with the firm's values and social mission of serving the urban poor. The case study illustrates the challenges that organizations face when constructing a new compensation system to achieve multiple outcomes. Although the case focuses on salespeople, it relates to general employees and, thus, can be used in courses in general management or HR policies. Also, because of its industry-specific contents (micro finance), the case can be used in courses related to financial inclusion in developing countries.
Cyberdyne Inc. was a Japanese technology venture that wanted to commercialize a hybrid assistive limb (HAL). HAL was a robotic exoskeleton system for people who had difficulty walking due to nervous system disabilities resulting from stroke, spinal cord injury (SCI), and intractable neuromuscular diseases. In a person with neuromuscular disorders, signals transmitted from the brain to steer muscle movement had become weak, causing ambulatory difficulty. HAL could noninvasively read faint signals that leaked to the skin's surface and amplify them, which drove actuators to assist limb movement. Thus, HAL enabled the person's brain to relearn how to walk, as HAL could reinforce the neurological system's transmission. To market HAL in the U.S., the world's largest medical device market, Cyberdyne submitted an application to the Food and Drug Administration (FDA) and was eagerly awaiting approval. The case concentrates on Cyberdyne's go-to-market strategy to market and sell HAL in the U.S. once it had obtained FDA approval. The case considers sales channel structure-a choice between a direct vs. an outside sales force-and other accompanying marketing-mix elements-in particular, price-as well as target-market selection, to understand ways to bring a technologically innovative product to market in a business-to-business (B2B) context.
All Nippon Airways (ANA) became the largest airline in Japan in 2013. Having been designated as a domestic carrier by the Japanese government till the mid-1980s and Japan being the sixth largest domestic airline market, two-thirds of ANA's passenger revenue came from the domestic market. However, the Japanese domestic population was decreasing at a significant rate; thus, the domestic market was expected to decrease. Also, plans of a super-high-speed rail and further improvement of current high-speed train systems would make air travel obsolete in many of the popular domestic routes. The key business problem that ANA faced was that amongst the changes in the Marketing 5Cs (Collaborator, Company, Competition, Context, Customer)-specifically, context (decreasing domestic population) and competition (high-speed trains)-how could ANA maintain/increase its business? As a way to resolve this problem, ANA's management was considering to invest in the international market to enhance its global presence. The case concentrates on specific challenges faced by ANA's management that must decide whether to focus on the international market and, if so, which international route it should pursue. Further, management must decide whether to purchase the Airbus's new super jumbo A-380 to increase operational efficiency and promote the ANA brand globally. The case provides details regarding the concept of product differentiation and the importance of aligning a firm's product policy with its overall marketing strategy.
Much of what we believe about the best ways to compensate and motivate the sales force is based on theory and lab experiments. But in the past decade, researchers have been moving out of the lab and into the field, analyzing companies' sales and pay data, and conducting experiments involving actual salespeople. The findings from this new wave of research support some current compensation practices but call others into question. For example, studies clearly show that caps on commissions hurt sales. If managers must retain a cap, they should set it as high as possible to avoid reducing reps' incentives. Although overly complicated compensation systems have their downsides, research has found that a system needs to include enough elements (such as quarterly performance and overachievement bonuses) to keep high performers, low performers, and average performers engaged throughout the year. Managers should be careful in setting and adjusting quotas. For instance, studies show that ratcheting (raising a salesperson's annual quota if he or she exceeded it the previous year) dampens motivation. The research also suggests that it's important to pay attention to the timing of bonuses: A reward given at the end of a period is more motivating than one given at the beginning.
All Nippon Airways (ANA) became the largest airline in Japan in 2013. Having been designated as a domestic carrier by the Japanese government till the mid-1980s and Japan being the sixth largest domestic airline market, two-thirds of ANA's passenger revenue came from the domestic market. However, the Japanese domestic population was decreasing at a significant rate; thus, the domestic market was expected to decrease. Also, plans of a super-high-speed rail and further improvement of current high-speed train systems would make air travel obsolete in many of the popular domestic routes. The key business problem that ANA faced was that amongst the changes in the Marketing 5Cs (Collaborator, Company, Competition, Context, Customer)-specifically, context (decreasing domestic population) and competition (high-speed trains)-how could ANA maintain/increase its business? As a way to resolve this problem, ANA's management was considering to invest in the international market to enhance its global presence. The case concentrates on specific challenges faced by ANA's management that must decide whether to focus on the international market and, if so, which international route it should pursue. Further, management must decide whether to purchase the Airbus's new super jumbo A-380 to increase operational efficiency and promote the ANA brand globally. The case provides details regarding the concept of product differentiation and the importance of aligning a firm's product policy with its overall marketing strategy.