Barry Jefferson could not understand why he was having a problem getting the information. As the regional vice president of sales (North America) for Digital Dimension Manufacturing he wanted to know how much it was costing the company for a salesperson to make a customer call. Certainly the company would know how much it costs to make a sales call. Unfortunately, the more he investigated the problem, the more he realized Digital Dimension did not have a good handle on its sales costs.

Digital Dimension was an established manufacturer of high-technology components based in Munich, Germany. Its products were used in a variety of products from computers to high-technology appliances, (refrigerators, dishwashers, etc.). Practically any product that required a computer chip could use the products offered by the company. As such, the company dealt with a wide range of customers, from the very large to medium-sized companies. Digital Dimension sold all over the world and had manufacturing plants in Germany, the United States, China and Malaysia.

Barry had 150 salespeople in 10 customer-focused sales groups across North American (100 in the United States, 30 in Canada, and 20 in Mexico). He knew the cost of making a sale varied a great deal across the sales force. Nearly half of the sales force was assigned to single customers; indeed, some even had offices inside their customers’ businesses. For the very largest customers, Digital Dimension had as many as four salespeople dedicated to a single account. Others, mostly new salespeople, were responsible for calling on smaller, less-established customers as well as generating new business from potential clients. He had spoken with his counterpart, Kim Reese, regional VP of sales (Europe), and she had confirmed her frustration with the current lack of information as well. She indicated support for a meeting with Grace Hart, executive vice president of sales, to discuss how Digital Dimension could get a better handle on the cost of doing business. As Barry sat in his office he considered how the meeting would go.

Questions

1. You are Barry Jefferson. What do you think would be important to discuss in a meeting with Grace Hart about the sales costs at Digital Dimension?

2. What information would you need to know in order to estimate the cost of making a sales call at the company?

3. If you were Grace Hart, what questions would you ask Barry Jefferson about implementing a cost analysis plan?