Case Analysis On Stepsmart Fitness: Submitted To

Case Analysis
On
StepSmart Fitness
(CASE 5)
Submitted to:
Prof. Vinita Srivastava
Submitted By:
Ankita Srivastava
Pgfc1907
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StepSmart Fitness: Case Analysis
Summary:
StepSmart Fitness, a manufacturer of exercise equipment, is undergoing a sweeping

reorganization. The new CEO has terminated the District Sales Director and Regional VP and
promoted 30-year-old Benjamin Cooper to manage the underperforming New England district.
A first-time manager with no one to train him or explain the causes of the district's
underperformance, Cooper has 10 weeks to diagnose the problems and make
recommendations that will ensure a turnaround in the territory in less than 16 months. Left to
his own devices, Cooper must review the sales data, the incomplete notes left by his
predecessor, and his own thoughts after spending a day in the field with each sales person.
Then he must make decisions about termination or probation for current employees, the hiring
of additional salespeople, ways to increase productivity, and potential new methods of
evaluating salesperson performance. He is set to present his conclusions to his also-newly-
appointed manager, the Regional VP for the Northeast, in a few days.
The Sales Force of the Company was divided into 3 groups:
1) Retail product
2) Private and Institutional
3) Commercial Products
Problem Statement
StepSmart Fitness was having issues with the performance of the sales force in the New
England district and they were not able to achieve the targets. Ben Cooper was promoted as
the vice president of sales for Northeast district. The company demanded from Cooper that he
was supposed to lead the New England district and increase the sales and revenue targets.
Whereas, there was a challenge for Cooper, if the New England district was not able to achieve
the target, then the 50% of the team would be terminated.
Key Issues
 The company was facing different issues in terms of achieving sales and revenues from
districts. This could be due to many reasons but major reasons were that the sales
teams of the company were not performing very well.
 In the New England district, especially the sales and revenue targeted by Step Smart
were not being achieved by the sales team. This was due to the fact that though sales
force was giving their efforts but due to some reasons they were not able to give their
hundred percent.
 In case of Avery, he was an experienced employee of StepSmart and also had great
knowledge, but the problem was that he was very much involved in the generation of
new ideas, innovations and implementing them in his real experiences.
 In the case of Foster, Cooper came to know that his performance was going great, but
his performance started to decline in a year.
 The lack of employees’ motivation and their interest, inappropriate behavior, unethical
actions and lack of developmental skills in improving their sales performances.
 The Case also involves lack of coach in sales to which the organization should provide
training about.
Employee Evaluation
The criteria Cooper developed for the evaluation of employee productivity is as follows:
 Notes made by Cooper on his two day evaluation of each employee

 Employee cost of sale
 Individual sales of employee
 District buying power
Organizational Culture
Their structure included a senior VP of national sales, five regional VP, fifteen district sales
directors and 115 salespeople. They all had different job responsibilities, with regional VP
having the most important. The challenge was to improve the sales performances of the
company. The total compensation of the employees included the basic salary ranging from
$30,000 to $93,000 plus the commission which ranged from $27,000 to $77,000 (Exhibit 3).
The regional VP was responsible for developing sale strategies, advising product management
and maintaining collaboration with the marketing team for promotion and price. While the
District sales managers were responsible to set goals for the salesperson which they need to
meet in order to gain the commission.
Threats
 StepSmart doesn’t have any online platform, whereas the competitors sell through
online stores.
 With an unmotivated team, it’s really easy for the competitors to takeover private and
institutional market from StepSmart.
 Reorganization may not be preferred by some employees, resulting in leaving the firm.
Opportunities
 They can sell directly through online portal to home consumers.
 Continue targeting the private and institutional market has they have a larger scope in
gaining this market share.
 Use of BPI to target the market according to their buying powers.
Employee Evaluation:
Grant Family  Cannot be granted leniency regardless of home problems

Foster Issues  Has third largest territory and fairly spread out BPI that is
hard to cover
 His territory will be made smaller and he will be expected to
fully penetrate the smaller area
 Has the capability, but will be closely watched and placed on
probation if we do not see immediate improvement in effort,
numbers, and calls on accounts
 Call/account expected to increase by at least 1.1 with smaller
territory
Lucia Maternity  Cannot cover her entire region due to family restraints –
concetta leave and need to realign her territory into less ground
territory  Pregnant – I will have to cover for her on maternity leave,
too large will hurt 2013 sales and have to have myself and a new rep
attempting to cover her ground in her absence
 Overall, good knowledgeable representative covering too
much ground
 Realign and make her territory smaller and require intense
penetration into much smaller region
 Calls on Account will rise
Walter Territory  Seems to perform well and is liked by clients
avery Too Large  Territory (Maine, whole state) is far too large to cover
 Realign his territory and closely watch to see is his numbers
improve
 His current BPI is far too spread out and he covers more land
area than other reps by far
 Not fairly compensated for work ethic
 Smaller territory should allow for increase in calls on account
 Currently makes 1,158 calls but territory is so large that
call/account seems low
Matt Ethical
gibbons Issues
Daniel Good  Misaligned work ethic and effort but knows the product and
ellis Performer / has the capabilities
Well  His sales numbers are not a reflection of effort given that his
Respected territory is smaller and has growth potential
 His salary is too high given effort he puts forward
 Needs to be handled delicately but will be on close watch -
no jump to probation or salary cuts yet
 Will mandate entrance into new health club he has thus far
ignored
Sam Quite  Old age is only current concern

hammon Complacen  We cannot give him more ground to cover given age and
d t should be on look out for his retirement 2014 or beyond
 Clients love him
 Knows the product
 Should require him to hit 3.0 calls/account but must handle
instruction delicately given old age and time spent in
company
 Despite this, cannot cut salary yet or he will leave / retire
Sophia Needs  Has been resistant to training but may be open to training
barrow Training from a manager she respects – will be required to be open to
training and resistance will not be tolerated
 Busy home life, cannot cover any more ground than already
covers
 Overall, a capable/ knowledgeable rep
 Will mandate a raise in call/accounts
Recommendations:
I recommend that Foster should
be placed on probaon, but he
should also be given some me
o5 of work to gather himself
emoonally. This will be both a
warning, and a sign to Foster that the
company does actually care for
his wellbeing.
 This also would make it easier for the company to concentrate on the training of
Concetta and Avery more, saving the company the cost-effectiveness of educating sales
staff, since they are both already knowledgeable of their products.
 Foster, once a leading performer, may collect his feelings more and contributes easily as
he once did.
 An improvement in the size of the team would allow sales representatives to

concentrate more on fewer customers, helping to drive higher revenue and meet a total
US sales target of 7.49 percent of the total US Sales.
 In order to make the plan work, Cooper would need to communicate effectively to Mark
Wallace that termination would not make revenues more cost-efficient, and is likely to o
nly make the business worse.
 Preparation expenses for just a few new employees save a lot of money on the recruiting
and firing expenses by the completion of some of today's salespeople.
I assume that raising the size of the team and the similarly broad spreading of the accounts
leads to a far more manageable sales position that prevents any sales representative from
getting frustrated and burst, leading to more efficiency.
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Case Analysis

StepSmart Fitness, a manufacturer of exercise equipment, is undergoing a sweeping

The Sales Force of the Company was divided into 3 groups:

 Notes made by Cooper on his two day evaluation of each employee

 Use of BPI to target the market according to their buying powers.

Grant Family  Cannot be granted leniency regardless of home problems

Sam Quite  Old age is only current concern

 An improvement in the size of the team would allow sales representatives to

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