1. Case 1 Sales Force Integration at FedEx Corporation: A Case Presentation Example
For Marketing 458 – Sales Management
Team Members:
Doug Vorhies
Jimmy Buffett
“Mac” MacNally
The Coral Reefers …

2. Outline Situation Analysis Assumptions and Missing Information
Problem Definition
Analysis of Alternatives
Recommendations

3. Situation Analysis
Recent acquisitions of freight firms has lead to multiple FedEx Salespeople calling on the same account.
Need for unified approach to customers
Project ARISE

4. S.A. - Customers Large Businesses (GT $40,000/yr)
Contractual – lower price to customer.
Small Businesses ($6,000-40,000 rev.)
Try for contracts – lower price to customer.

5. S.A. - Market Offerings Overnight packages Ground
1, 2 or 3 day delivery
Money back guarantee on 1 day.
Ground
Freight services for large and often heavy packages.

6. S.A. - Competition
Overnight:
UPS
Airborne
USPS
Ground:
Trucking firms

7. S.A. – Compensation Express: Revenue Targets w/ Bonus at 96% of goal
Primary focus on existing accounts.
Goals set by Corporate with adjustment
70% salary
Trips/Pres Club as incentive

8. S.A. – Compensation Ground:
Revenue Targets + Activity Targets with bonus at 50% of goal
60% of incentive based on SP F/C
No adjustment
82% is salary
Bonus financial incentive only

9. S.A. – Pkg Rev.
Results for 2000 demonstrate that integrating the sales force may be problematic due to less revenue attributable to ground.
Express AEs might see comp. shortfall if quotas not realigned.
Ground AEs would see targets jump creating disincentive.

10. S.A. -Sales Force Structure
Two Units Express and Ground
Express:
2,200 Account Executives (AE)
Ground:
800 AEs.
Both SF structures are hierarchical
Multiple AEs call on client
No one AE as focus

11. Express Structure Worldwide – 104 Accts Over $10,000,000 Rev. WWS
Global – 237 Accts
$1,000, ,000,000 Rev.
Global
Local/Nat’l – 200 Accts
$5000,000 - $1,000,000 Rev.
Local/Nat’l
Field – 600 Accts
$40,000 -$5000,000 Rev.
Field
Inside – 60 Accts
$6,000 - $40,000 Rev.
Inside
Inside Tel – 211 Accts
Below $6,000 Rev.
Inside Telephone Sales

12. Ground Structure National – 59 Accts Top 500 firms National
Field – 616 Accts
Medium Size
Field
Inside – 155 Accts
Small Custs and Prospecting
for new business
Inside

13. S.A.– ARISE Impact Will make dealing w/ FedEx easier.
Will integrate shipping systems
Designed to improve customer ability to ship via FedEx.
Will give opportunities to integrate SF
More consultative selling
Move toward stronger relationship
Build importance of SF to customer

14. S.A. – Teams
Team selling can enable stronger service knowledge by bringing ground and express knowledge to benefit customer.
How to compensate.
Role of inside sales?

15. SWOT - Strengths Overnight industry leader (46% Share)
Best on-time express performance
High brand recognition
Consultative selling combined with Industry leading technology brings Innovative solutions to save customer money.

16. SWOT – Weaknesses
Two Sales forces leading to two points of contact for cust’s.
Two SF structures & comp systems.
Two shipping tech systems.
Weaker position in ground
Duplication of some operations (e.g., 2 sets of FedEx trucks ground and express.

17. SWOT – Opportunities Market growth for O/N & Express
O/N growth at 6-8% (Ex 2)
Ground growth at 8-10% (Ex 2)
Cost savings from shipping systems integration (ARISE)
Build business when ARISE goes online.
Cost savings when ARISE goes online.
Cost savings from SF integration

18. SWOT – Threats
Commoditization of O/N business lead to reduced revenue.
Ground is commodity business.
UPS stronger in ground.
Customer confusion due to two SF.
Customer confusion w/ two shipping systems.
Business is impacted by bus cycle.

19. Class Discussion
The presenting team is to stop their presentation at this point and give the class an opportunity to add to and discuss issues.
This is the time for the class to find what the presenting team has missed.
I will be evaluating the class on their analysis and ability to find problems or unidentified issues in the presenting team’s presentation.

20. Assumptions/Missing Info.
ARISE will be successful
Top Mgmt support
Economy continues to grow
SF is not able to stonewall changes

21. Class Discussion
What have we missed.

22. Problem Definition Problems: Different sales strategies
Different comp plans
Lack of coordination
Reduced opportunity for relationship building
Multiple customer touch points creating confusion
Increased costs

23. Overall Problem
Need to integrate Sales Force to bring unified customer contact.

24. Alternatives Integrate current sales forces into one
Do not integrate but coordinate.
Maintain Status Quo – not considered.

25. Alternative - Integrate
Develop one point of contact
One shipping system (versus two today)
More focus on consultative selling
Build Ground Services Business
Compensation system for ground not delivering.
SF Goals individually set/Targets too low?

26. Alternative - Do not integrate but coordinate.
Maintain two SF’s but create coordination mechanisms.
Team Selling for larger accounts
Set Ground goals at corporate to match Express approach
Move toward higher goals for ground.
Create sales support specialists to do the technical integration w/ customer systems.

27. Recommendation – Integrate!
Model comp system after Express – less disruption to revenue.
But add “Yield” goal/incentive.
Redistribute territories where necessary
Cross Train
Train on ARISE
Create sales support specialists to assist with tech integration.
Eliminate duplication in territories – eliminate positions in SF if necessary – cost savings.
Maintain salary plus incentive model.
Cost savings can be realized from integration of both SF and ARISE.

28. Class Discussion
What has the group missed in their analysis of alternatives?

29. Questions about process?

30. Other things for Class to Remember
Team Presentation – Approx 30 Minutes of presentation time (not counting questions).
Individual 2 page (typed) case outline will be turned in at the beginning of class by each student (presenting team excluded).
Hand in 1 copy and keep one for yourself.
You may discuss w/ your team but prepare individually (we will check for copying).
Presenting team to give 5 T/F questions (with answers) to Dr. V. for inclusion on final exam.
Send Dr. V. copy of team slides (via ).