ROUSH PERFORMANCE: HOW TO DESIGN A SALES FORCE COMPENSATION

PLAN

Case background:

Roush Performance is an American engineering and manufacturing company that operates in

the automotive industry, working mainly with street vehicles and professional racing. Roush
Performance has been concentrating heavily on improving its engineering technology and
growing its product line to generate sales since the company was formed. His marketing and
sales team was 'left to gather dust' in doing so. Since its creation this department has been
stagnant with no significant changes occurring to generate further sales. Therefore, when the
newly appointed Marketing Vice President Jacqueline Holliday was recruited, she was directed
to create a new compensation system for sales force to provide its salespeople with. This will
be introduced to facilitate an improvement in sales success for Roush. Holliday proposed some
different methods in doing so, including reforms to address commissions, salaries and bonuses.

Problem statement:

 One of the key problems reported was that 43% of the company's sales came from the top
two sales personnel, creating a problem situation. The first main area is that this runs the
risk of the company losing 43%of its annual sales when these two sales personnel
becoming unavailable or instantly quit their positions.
 Holliday's sales force investigation showed signs of complacency with the sales force.
Automotive dealerships produced around half of the total sales of their companies, just
two or three new ones. Every year accounts were set up, some dealers ended up with the
company in Current Years.
 Roush Performance experienced a marked change in consumer demand. Demand for
sedans decreased, while demand for trucks and SUVs increased.

Recommendations:

 The best “arrangement that “is best prescribed to fix the three difficulties that were
illustrated for the situation study is for Roush Performance to utilize the remuneration
conspire that considers every single money related factor, which incorporates; base
compensation, commission and reward.
 The best answer for fix market request change would before Roush to change with the
market.
 This remuneration plot is viewed as the best plan as it is accepted to fix all B2B deals
related issues expressed for the situation study.
 Due to varieties to deal from sales rep to sales rep, a base compensation will make life
steadier for them."
RUCHIKA SINGH
PGFC1955