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Case 2 Sales Force Training at Arrow Electronics

Case 2 Sales Force Training at Arrow Electronics. Marketing 458- Sales Management Mike Atwood Carson Young Brittany Carmichael Tyler Torbett Nick Meyer. Outline. Background Business Case Issues Analysis Business Problems Solution. Company History. Radio-equipment retailer in 1935.

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Case 2 Sales Force Training at Arrow Electronics

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  1. Case 2Sales Force Training at Arrow Electronics Marketing 458- Sales Management Mike Atwood Carson Young Brittany Carmichael Tyler Torbett Nick Meyer

  2. Outline • Background • Business Case Issues • Analysis • Business Problems • Solution

  3. Company History • Radio-equipment retailer in 1935. • In the 1950’s and 1960’s, Arrow began selling electronic components. • 1977- main distributor in the United States • Industry growth in the 1970’s • Growth from regional to national company • 1993- Arrow had the highest sales in North America.

  4. Business Case Issues • Customers • Market Offerings • Competition • Sales Force Structure • Sales Force Compensation • Sales Strategy • Other Sales Force Issues

  5. Customers • Arrow ordered products from suppliers. • Sell the components to Original Equipment Manufacturers (OEMs) • Smaller companies • Start-up companies

  6. Market Offerings • Extensive relationships with customers • Handled the supplier’s goods. • Access to thousands of products from hundreds of suppliers

  7. Competition • Around 350 competitors within this High-growth Industry • Many sales people left Arrow to work with competitors -Departing Arrow sales people took their clients with them • Mainly competed with 20 large regional or national companies

  8. Sales Force Structure • Sales divided into 4 distinct operating groups based on product type: 1) Commercial Semiconductors 2) Military and aerospace semiconductors 3) Passive and connector products 4) Computer systems, peripherals, and software • Sales Force divided into geographic divisions -Each of which had a Branch Sales Office

  9. Branch Office Structure

  10. Sales Force Job Description • General Manager (GM) • Field Sales Representatives (FSRs) • Sales and Marketing Representatives (SMRs) • Product Managers (PMs)

  11. Branch Office Compensation

  12. Sales Strategy • Relationship based selling - Sales strongly tied to individual FSR’s relationship with suppliers -Sales Force of 300 people with no formal sales training -Sales Force used a lot of “T & E”

  13. Typical Sales Force • Gender: Men and Women • Age: 30’s and 40’s • Personality: high energy, highly aggressive, strong monetary motivation • Education: high school graduate • Most did not have college degrees

  14. Problems with Sales Strategy • Sales Force challenging to retrain • Sales Force “wine & dine” customers instead of solution selling -creates a lack of customer loyalty • High Turnover Rate -lack of company loyalty

  15. Sprout Background • Arrow needed more salespeople, but wanted to change the make-up of sales force • Decided to hire kids fresh out of college • The plan was to go on college campuses, interview kids, choose the best ones, make offer, hire, train, and send to the field

  16. Objectives of Sprout Training • Upgrade professionalism of sales force by hiring kids and molding them into modern salespeople • Teach classic sales skills • Teach how to manage territory, cold calss, overcoming objections, and how to close sale

  17. First Steps • Train Arrow managers how to interview college students • Taught managers to look for self starters, goal-orientated, leadership skills, and people skills • Conducted mock interviews with students

  18. Sprout’s Training • Went to company headquarters for weeklong orientation • Sprout’s sent to warehouses for two weeks • Six months of on the job training • Returned to headquarters for a week of sales skills training

  19. Formal Training Program • Needed more formal training program • Rented training facility where sprouts would live for 13 weeks of classroom learning • 13 weeks of on the job training • 3 weeks of training before entering field permanently • GMs noticed huge difference in sprouts

  20. Sprouts Compensation • New Recruits - $18,500 • First year “Sprouts” - $24,000 • Second year “Sprouts” - $27,000 • Competitors - 30 to 60 percent more - First year “Sprouts” - $30,000 - Second year “Sprouts” - $40,000 to 45,000

  21. Class Discussion and Questions • Are there any questions so far?

  22. Business Problems • Turnover Rate • Arrow/Industry? • Initial Sprout Training • Existing/New Salesforce • Modified Sprout Training • Competitors move in on Sprouts

  23. Solutions • Company Loyalty • Regional • National • Compensation • Training

  24. Class Discussion and Questions • ?

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