SCENARIO
You just came on as vice president of sales for General Industries, overseeing 150 salespeople and 10 sales managers. General's sales were solid, but profit margins were abysmal. General's president charged you with fixing the situation.
During your first few months on the job, you spend much of your time on the road with your salespeople visiting customers. Your mission was twofold: introduce yourself to General's customers, and observe the selling styles of your reps. What you discovered was that price cutting was rampant. Your predecessor, you learned, had managed with the credo "sales at any cost." Unfortunately for General, the practice cost the company profits.
You have to devise a turnaround strategy. Your biggest challenge will be to get 150 salespeople to drastically adjust the way they have been selling for the past four years under the former sales VP. And, you have to get his 10 sales managers to support and encourage the change. You know that your toughest challenge will be managing the drop in sales that may result from your new mandate of "sell on value, not on price cuts." But you’re also worried that many of your reps will leave the company over fears that their commissions will be reduced in the short term.
Questions:
1. How can you introduce your new policy without creating resentment among the reps?
2. What would you focus on in the “re-training” program?
3. What could you do to minimize the financial impact to the sales force when they lose accounts due to the increased prices?