Kane's Buy-Rite Used Cars had experienced its third straight year of declining profits. Although a few more cars were sold each year, the profit per sale was down. Kane Shouk, the owner, had traditionally relied on a loyal group of customers who returned to buy a second and even third car, demonstrating their satisfaction with the company. Fewer customers were returning each year, however, and the company had to increase its promotional budget. Although the promotional activities were attracting prospective customers to the business, salespeople were finding it difficult to convince them to buy. There were fewer new customers than there were former customers who were not returning.
1. How should Kane work with the salespeople to introduce the change?
2. How can Kane motivate the salespeople now that commissions will not be paid on sales?
3. What controlling activities could Kane undertake to be able to specifically determine why profits have been declining?