Sales Metrics Assignment

Complete each of the questions below and submit your answers for grading. Point form answers are

preferred. Refer to the information in Lecture 3 for help completing these questions.

Students can

submit the answers in Word, Excel, or through scanned hand

–

written responses (do NOT submit PDF

files). All submissions must be made in Moodle. Papers will be graded and returned via Moodle.

1) Using the information in the table below determ

ine whether or not Royal Siding should hire

three

sales rep

s

using Incremental Method.

Hint: Recreate th

e table on Slide 19 in Lecture 3

.

Data for Q.1:

Each sales rep is paid $50,000.

Total

estimated

revenue with the number of reps shown is as follows:

1 rep:

$125,000

2 reps: $200,000

3 reps

: $265,000

Total estimated profit with the number of reps is as follows:

1 rep: $75,000

2 reps: $150,000

3 reps: $1

1

5,000

2) Use the Workload Method to determine the sales force size needed to cover a market of 2,500

businesses with the following breakout:

(Hint: See Slide 18 in Lecture 3.

50% are C

–

accounts that should be visited 4 times a year for 30 minutes each time

45% are B

–

accounts that should be visited once monthly for 60 minutes each time

5% are A

–

accounts t

hat should be visited weekly for 45 minutes each time.

Assume the following average work week for each sales rep:

Selling time: 10 appointments each week averaging 1.5 hours each

Travel time: 6 hours a week

Paperwork/administration: 4 hours a week

Servicin

g existing clients: 5 hours a week

Prospecting/research: 5 hours

Total hours: 35 hours a week

Assume that sales reps work for 48 weeks a year and have four weeks of vacation time.

3) Using the quota plan shown, calculate the quota attainment for each of

the sales reps in the table

below. Which reps appear to be the best reps in terms of quota attainment? (Hint: See Slide 22 in

Lecture 3.)

a) Quota Plan:

Activity Quota: Calls/week with a goal of 100/week weighted at 20%

Sales Volume Quota: Gross sales wi

th a goal of $1,000/week weighted at 50%

Financial Quota: Net profit with a goal of $500/week weighted at 30%

Rep

Calls/Week

Gross Sales/

Week

Net Profit/

Week

Oliver

75

$850

$100

Susan

125

$900

$450

Martin

150

$1,500

$750

Clara

145

$1,750

$800

Stephanie

100

$1,000

$500

b) How would the

results change

if the quotas were all equally weighted? Would the results be different

in terms of which reps were the best?

4. Customer Lifetime Value (LTV)

Assuming that the average customer will use their s

mart phones until they are 85 years old, what is the

LTV for each of the following customers? Assume that their average monthly smart phone cost will

remain the same throughout their lives.

Hint: This is discussed in detail in class. Plan to attend!

Custom

er

Current Age

Monthly

Cost

Shelly

18

$25

Bruce

52

$72

Khalid

27

$30

Nathan

22

$19

Chloe

24

$27

Brenda

37

$35

Dave

42

$39