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Written to accompany the Airtel Zero: Data Pricing Case (A00118), this note is intended to provide supporting information, models and frameworks on the issues of net neutrality in two two sided markets and how these influence the range of options available to price data services in the context of the online data services in the Indian market.

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.

Konica Minolta Business Solutions (KMBS) was a leader in advanced document management technologies. Its business solutions were grouped under office systems, print production, and printers. Its business solutions were grouped under office systems, print production, and printers. Peter Daniel, Branch Manager for northern New Jersey at KMBS, recently assigned Bill Swanson to be the sales rep responsible for Bergen and Passaic counties in New Jersey. Swanson was assigned the responsibility of winning an important account away from competitors, namely, NYCG, a large global accounting and consulting firm in Wayne, New Jersey. Swanson had to draft a plan to gather information from the prospect. The sales process can be classified into three key phases: prospecting, needs identification, and proposing a solution and closing the deal. The KMBS cases (A), (B), and (C) primarily focus on needs identification. In KMBS(A), Swanson had to develop the plan of action for planning, preparing, and approaching NYCG. In KMBS(B), Swanson met with the Global Procurement Director at NYCG, Bob Benedict, to understand NYCG's needs. He also met with Peter Daniel to discuss how they should continue to identify NYCG's needs. Finally, in KMBS(C), Swanson met with the heads of the Distributed Print Services and Central Print Services divisions, as well as other users at NYCG, to understand their needs. These efforts should help KMBS create a custom solution for NYCG. Swanson and Daniel thus must decide which solutions to present to NYCG.

Supplement to case NA0405. Konica Minolta Business Solutions (KMBS) was a leader in advanced document management technologies. Its business solutions were grouped under office systems, print production, and printers. Its business solutions were grouped under office systems, print production, and printers. Peter Daniel, Branch Manager for northern New Jersey at KMBS, recently assigned Bill Swanson to be the sales rep responsible for Bergen and Passaic counties in New Jersey. Swanson was assigned the responsibility of winning an important account away from competitors, namely, NYCG, a large global accounting and consulting firm in Wayne, New Jersey. Swanson had to draft a plan to gather information from the prospect. The sales process can be classified into three key phases: prospecting, needs identification, and proposing a solution and closing the deal. The KMBS cases (A), (B), and (C) primarily focus on needs identification. In KMBS(A), Swanson had to develop the plan of action for planning, preparing, and approaching NYCG. In KMBS(B), Swanson met with the Global Procurement Director at NYCG, Bob Benedict, to understand NYCG's needs. He also met with Peter Daniel to discuss how they should continue to identify NYCG's needs. Finally, in KMBS(C), Swanson met with the heads of the Distributed Print Services and Central Print Services divisions, as well as other users at NYCG, to understand their needs. These efforts should help KMBS create a custom solution for NYCG. Swanson and Daniel thus must decide which solutions to present to NYCG.

Supplement to case NA0405. Konica Minolta Business Solutions (KMBS) was a leader in advanced document management technologies. Its business solutions were grouped under office systems, print production, and printers. Its business solutions were grouped under office systems, print production, and printers. Peter Daniel, Branch Manager for northern New Jersey at KMBS, recently assigned Bill Swanson to be the sales rep responsible for Bergen and Passaic counties in New Jersey. Swanson was assigned the responsibility of winning an important account away from competitors, namely, NYCG, a large global accounting and consulting firm in Wayne, New Jersey. Swanson had to draft a plan to gather information from the prospect. The sales process can be classified into three key phases: prospecting, needs identification, and proposing a solution and closing the deal. The KMBS cases (A), (B), and (C) primarily focus on needs identification. In KMBS(A), Swanson had to develop the plan of action for planning, preparing, and approaching NYCG. In KMBS(B), Swanson met with the Global Procurement Director at NYCG, Bob Benedict, to understand NYCG's needs. He also met with Peter Daniel to discuss how they should continue to identify NYCG's needs. Finally, in KMBS(C), Swanson met with the heads of the Distributed Print Services and Central Print Services divisions, as well as other users at NYCG, to understand their needs. These efforts should help KMBS create a custom solution for NYCG. Swanson and Daniel thus must decide which solutions to present to NYCG.

When you do good, you treat yourself with a cookie, new research shows.

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.

U.S. businesses spend $800 billion annually on sales force compensation and another $15 billion on sales training. Yet the backward-looking metrics they rely on (such as revenue generated) to gauge the impact of this spending provide limited insight into how a salesperson will do going forward and what types of training and incentives will be most effective. As a result, many companies misallocate sales force investments. The authors worked with data from a Fortune 500 B2B software, hardware, and services firm to develop a method for measuring reps' future profitability. The metric, salesperson future value (SFV), is the net present value of future cash flows from a salesperson's existing and prospective customers minus the costs of developing, motivating, and retaining the rep. The SFV analysis revealed that the firm had been overvaluing poor performers and undervaluing stars. Using the SFV calculations and data on each rep's prior training and incentives, the authors segmented reps according to whether they were motivated more by training or by various incentives. The firm then increased training for some reps and increased incentives for others, thus achieving an 8% increase in SFV across the sales force. The firm also increased its investments in high-SFV reps and reduced investments in low-SFV reps--a reallocation of resources that increased the firm's revenue by 4%.

When Mark Roberge joined HubSpot as its fourth employee, he had no sales experience but still was charged with building the sales team. His background proved to be an advantage, however: With his engineering training, Roberge brought an analytic rigor to the task. And he quickly realized that the sales compensation plan could motivate salespeople not only to sell more but also to behave in ways that advanced the start-up's evolving strategy. Each time the firm entered a new stage of growth, Roberge revised the comp plan to support its changing priorities: (1) Customer acquisition. Early on, HubSpot needed to bring in lots of customers and see how well its offer was working. So it rewarded salespeople for customers who stayed at least four months, and soon grew to 1,000 customers. (2) Customer success and retention. In the second phase, HubSpot focused on ensuring that its product fit the market. Realizing that many customers were jumping ship because they'd been given the wrong expectations, Roberge began tying commission rates to the rate of customer retention. (3) Sustainable growth. After it fixed retention, HubSpot saw that its service worked best for customers who made a commitment to it. So the firm's third plan rewarded salespeople for customers who signed up for a full year at a time. The continual adaptation paid off: In seven years HubSpot hit $100 million in sales.

For more than three decades, Andris Zoltners, now an emeritus professor at Northwestern, has been studying the best ways to organize and pay salespeople. The pioneer of sales analytics, he is the founder of one of the world's largest sales consulting firms and the author of six books on sales management. In this interview, he shares some of his insights with HBR. Companies make several common mistakes with sales compensation, Zoltners notes: over- or underincentivizing key products, setting quotas too high or too low, and underpaying top performers or overpaying people with good territories. Companies often get the proportion of incentive pay wrong, too, because they fail to account for "free sales"--residual sales they get nearly automatically. They may think they're paying 60% in salary and 40% in commissions, but if their salespeople have a lot of free sales, commissions could be closer to 15%. Overly complicated plans are also a problem. Some plans have different payments for dozens of objectives. That's too much; salespeople can focus on only four or five goals at most. Yet a bigger issue may be an overreliance on compensation in the first place, Zoltners suggests. There are other drivers of sales success--the people you hire, their managers, the design of territories. And while analytics are a useful tool, culture may prove to be an even better one.

Sales reps have long been taught to seek out a senior executive who can single-handedly approve a deal, but unilateral decision makers are now rare. Today most purchases are made by groups of individuals, all with different roles and priorities, and all with veto power. As a result, getting deals done has become an increasingly painful and protracted process. But innovative suppliers are finding ways to drive consensus in diverse buying groups, say three authors from CEB, which has been researching the impact of this buying shift. Those suppliers prime group members to find common ground by creating shared language and perspectives around problems and solutions. They identify internal champions for their offerings at the customers' companies; motivate those individuals to become active advocates; and arm them with the skills and materials needed to win over fellow decision makers. Accomplishing all this requires some novel approaches, such as social-media mining, customer "learning tours," and inventive diagnostic tools. It also calls for a new level of collaboration between sales and marketing. But given today's pressure to drive consensus, suppliers that don't align the two functions as a single team will be trounced by those who do.

"Not another Bochum." Nokia Board Chairman Jorma Ollila was clear in the goals he set for the 2011 restructuring that Nokia's new CEO, Stephen Elop, had decided was necessary to address the dramatically changed competitive environment the company faced in smartphones and mobile phones. The strategy shift would include transitioning Nokia's phone operating system to Microsoft Windows, and closing phone R&D centers and factories in 13 countries, with layoffs that would eventually impact 18,000 employees. Yet with several important R&D projects still under development, and capacity needed in factories for many more months, Nokia's board and leaders wanted to avoid the mistakes the company had made in a plant shutdown in Bochum, Germany in 2008. EVP of Corporate Relations and Responsibility Esko Aho was mandated to develop a "Nokia way" to implement the restructuring that would reflect the company's values and allow them to maintain morale and commitment among the employees who would eventually lose their jobs. The case describes the development of Nokia's "Bridge" program, a comprehensive approach to helping employees find new employment opportunities and to replacing jobs in communities where Nokia had been a major employer. The case challenges students to make decisions such as when and how to tell employees about a layoff, how to manage local government leaders, and what support to provide in 13 different countries, each with its own legal and regulatory environment, cultural norms, and expectations and needs of employees and local communities.

Nokia's leaders reflect on the Bridge program, lessons learned during its implementation, and the business benefits it brought to the company. Nokia's Bridge program resulted in 60% of employees knowing their next step the day they exited the firm. It also helped employees start 1,000 new companies, and replaced jobs in communities where Nokia was a major employer. One-third of all mobile phone sales between 2011 - 2012 came from new products that were developed at R&D sites and manufactured at factories that were to be closed down or downsized as part of the restructuring.

Studies show that only a fraction--perhaps less than 10%--of companies' strategic plans are effectively executed. One reason is that C-suite strategists, years removed from customer contact, may have an obsolete vision of the company-customer interface. The author's research reveals four steps companies can take to improve the alignment between strategy and sales.

The Senior Vice President of FormPrint's Medical Products business unit is considering issues raised by the upcoming introduction of a new 3D printing system, the Ortho500, which could print custom exoskeletal orthopedic splints, braces, and casts that conformed to a patient's body. The potential market extended beyond large urban hospitals (the Ortho's existing market) to high-volume outpatient offices in the U.S., with a long-term goal of expanding internationally. The product represents an important new market opportunity for FormPrint's Orthopedic business unit, but requires a new approach to marketing and sales. The immediate issue is whether the product should be sold by FormPrint's existing orthopedic sales force or by independent sales representatives. Other issues include the role of the Ortho500 in the company's global marketing strategy and the need for better marketing-sales coordination in a changing healthcare marketplace. If the Ortho500 failed to meet sales targets, bonus compensation would be reduced and the department could face layoffs. The case focuses on a core marketing decision-direct vs. indirect channels of distribution-and raises important issues in strategy development and implementation. The FormPrint case is ideal for use in courses on marketing strategy, marketing organization, B2B marketing, or new product development.

Julien Levy, the case protagonist, is product manager at SOTARG France in charge of printers and related accessories. SOTARG is an international manufacturer of printers, print-related products and other electronic devices. He has been approached by a direct marketing firm offering its services in developing and implementing a sales promotion campaign to help boost SOTARG's end-of-year sales. The suggestion is to launch an in-store promotional campaign in 10 hypermarkets at a certain price per day per booth. Julien is interested, but has to evaluate how many new customers the campaign must generate in order to break even on the cost of the promotion or even be financially more interesting.

In B2B markets, suppliers of nonstrategic products and services tend to assume they have only two options for landing sales: stressing their offerings' unique characteristics and competing on price. The problem is, the features touted often don't matter to purchasing managers, and neither do price concessions. How, then, do you win their business? The authors' research with 46 companies points to a solution: After meeting the customer's basic specs within an acceptable price range, give the purchasing manager "a justifier"--an extra that provides obvious value to the business. A car-leasing company, for instance, might offer the option to cancel a number of contracts without penalty, or a delivery service might print customers' logos on their envelopes. The justifier provides a clear-cut reason to select one supplier over others and breaks the tie among the finalists on the short list. To uncover justifiers, you should explore how customers use your offerings, learn about their priorities and those of their customers, and look at ways to integrate your offerings with other suppliers'. The right justifier can win you more business--and even help you launch a new one.

Chapter 1, Information, Intelligence, and Sales Strategy (28 pages), begins with an overview of the historical evolution of competitive intelligence and its value for an organization. The author explains how the sales person connects an organization to its market, and considers five factors that impact sales performance: skills/competencies, work ethic/motivation, resources, territory, and luck. He defines data, information, competitive intelligence, and knowledge, describing how each fits into a competitive intelligence system. He explains the importance of information quality, defined by dimensions in four categories: overall quality, relevancy, format, and meaning. He considers the ultimate purpose of competitive intelligence to inform strategy and decision-making. He explores the nature and value of a marketing and sales information system to guide marketing and sales decisions. He ends the chapter with practical insight about the importance of synthesizing a variety of information from different sources.

Chapter 2, Competitive Intelligence and the Market-Oriented Organization (22 pages), considers the manager's role in creating an environment that generates, disseminates, and responds to field intelligence. The author states that a market orientation strategy derives from a company's ability to both collect and utilize market-related information. He considers three determinants of market orientation: top management, interdepartmental dynamics, and organizational systems. He explains why market orientation also requires collaboration between marketing and sales, and presents a model of eight factors in the relationship between marketing and sales: vision, alignment, processes, information, knowledge, decision, resources, and culture. He reviews three main responsibilities for sales in finding and communicating information to the rest of the organization. He explains that a company's competitive intelligence system should process and validate information as well as make it actionable for decision makers. He considers three obstacles to information acquisition, evaluation, and transmission.