Designs by Kate

Group 10















1. What is the sales growth model based on?
The sales growth model is driven by the following facts:
a. It is a volume based industry where the sales are directly proportional to the number of
sales reps.
b. The prospect of hosting social events and meeting friends
c. The profits that gained are lucrative (25%) and are derived at considerably lesser efforts
d. The gains keep on increasing with the addition of more levels of reps.
e. Business model suitable for housewives
.
2. From a sales representative perspective, does it pay to build a team?

Pros Cons
Chance of increase in gains by adding more
levels below.
The level 1 rep has to match the sales of the
leader at-least upto 75% to increase gains for
leader. Hence impetus on leader to increase
level 1 sales
Prospects of gaining senior positions will
increase % share in sales
Training responsibilities of team are on the
leader. Hence more work.
More levels require more communication
efforts

Thus if the pros start weighing more than the cons, only then the prospect of forming teams is
lucrative. Currently the increase in responsibility on forming a team outweighs the gains reaped,
hence it is not a profitable venture to form teams.

3. Can you find a way of assessing the value of a sales representative?

A sales rep has 2 attributes that add up to the revenues of the company.
a. Personal sales
b. No. of team members added

The company according to its policies is better off by addition of more sales reps as the revenues
increased by adding sales reps would be more than the personal sales achieved.

Performance =
1



4. What course of action would you advise the company to take?

Incentivize addition of new team members to offset any reduction in leaders gain and reward
the extra work required for maintaining teams.
Hence the following profit scheme should be applied:
Plan Sales level 1
members
Profit
Sales rep 1000 0 25%
1 or more 30%
>1000 0 32%
1 or more 35%

To offset the increase of returns to the reps, the company can reduce the leadership dollars as
per table below:
Leadership dollars

Leader Manager Director
Level 1 team
member
4% 7% 10%
level 2 team
member
2% 5% 7%
level 3 team
member
1% 3% 5%