Sales Force Integration at

FedEx
SITUATION ANALYSIS
• Recent acquisition of RPS had lead to multiple FedEx salespeople
calling the same customer due to different accounts
• UPS (the main competitor) offered a single value proposition for both
Express and Ground package deliver services
• Need for a unified approach was desired by the customers
• Hence Project ARISE
ARISE
• Project ARISE – an external need as well as an internal necessity
• Important objective – Development of a compensation plan to create
a well balanced sales approach between Express (Domestic and
International) and Ground
• Other Objectives :
Sales (General) Sales (Management) Sales (Administration) Operations Training

• Organisational • Performance targets • Pricing/Contracting • Coordination of • Cross training to

Structure • Compensation • Reporting marketing/sales with ensure that account
• Geographic Sales • Career development • Budget development FedEx Express and executives that
territory design FedEx Ground historically sold FedEx
• Recruitement
• Customer operating companies Express could now
segmentation sell both express and
ground and vice versa
• Customer retention
• Call frequencies of
each customer
segment
BENEFITS OF ARISE
• Ease the process of dealing with FedEx
• Integrated shipping systems would optimise costs
• Improve customer ability to use FedEx services
• Help in integrating the salesforce to beat competition (with UPS)
• Provide opportunities to consultative selling
• Move toward stronger relationship
- Build importance of salesforce to customer
COMPETITORS
Overnight :
• UPS
• Airborne
• USPS

Ground :
• UPS
• Trucking Firms
SWOT ANALYSIS
Strengths :
• Overnight package delivery industry leader
• Best on-time express performance
• High Brand recognition
• Consultative selling combined with industry technology
bringsinnovative solutions to save customers money
SWOT ANALYSIS
Weakness :
• Two salesforce leading to two points of contact for customer
• Two salesforce structures and computer systems
• Two shipping tech systems
• Weaker position in ground
• Duplication of some operations (e.g. 2sets of trucks for ground and
express)
SWOT ANALYSIS
Opportunities :
• Ground growth at 8-10%
• Cost savings from shipping systems integration (ARISE)
• Build business when ARISE goes online
• Cost savings when ARISE goes online
• Cost savings from SF integration
SWOT ANALYSIS
Threats :
• Commoditization of business leads to reduced revenue
• Ground is commodity business
• UPS stronger in ground
• Customer confusion due to two salesforce
• Customer confusion due to two shipping systems
COMPENSATION PLAN
• Compensation – 80% salary and 20% incentives & bonuses
• In future – 70% salary and 30% incentives & bonuses
• Goal Setting for incentives & bonuses performed at every 6 months
for each individual territory or major customer
• Revenue goals to be set for the 3 areas – Express, Ground,
International
• Account Executive’s bonus – 85% revenue growth goals + 15%
average revenue per package (yield factor)
• Quarterly bonus – (Base bonus from Revenue yield matrix) x BPI
• Revenue Yield Matrix :
- Revenue Element – Sum of all revenues (Express, Ground and
International)
- Yield factor – Compare the weighted average yield for the quarter to that
of the same quarter of the previous year
- Weighted average yield – average of the yields for each major product
type (Domestic – Letter, Domestic – Package, International, and Ground)
• Account executives eligible for a bonus if they achieve at least 80% of
quarterly revenue target
• BPI – Balanced Performance Incentive Multiplier
• 90-100% of revenue goal = BPI of 1.0
• 101-110% of revenue goal = BPI of 1.2
• >=111% of revenue goal = BPI of 1.5
• An account executives’ BPI – Average of multiplier values across all
three service offerings (International, Express, Ground)
CLASS DISCUSSION POINTS
• Need for ARISE?
• How can ARISE contribute to FedEx?
• Why integrate the salesforce?