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Case Study – D&M Insurance: “Lead Insurance”

D & M is a mailing company that has new ways of mailing information to businesses in the area. The method that they use is a way for those interested in learning more about the programs that their company can offer. Since the method they are using to mail information hasn’t been used by other company, the head manager Doug decided to run the program after not being successful in their sales. To his surprise seventy-nine people requested for more information the next ten days. Doug thought it would be successful but only two of the leads that he told the sales people followed up. He didn’t want to lose anymore leads so in the end he talked to his sales people and said that he would create a plan for them to use in following up leads.

  1. Should Doug have taken an approach other than saying that he would create a standard plan?

I feel that Doug started in the correct way by creating a standard plan for the salespeople to use while following up on leads. In order for the salespeople to be held accountable and establish a baseline then the supervisor would need to create a starting point. In this case, the standard plan would be that starting point. It would show the salespeople what is expected of them and to coach them on how to handle the leads generated by the mailing. Once the standard plan is created then Doug can alter it to best suit each salesperson.

  1. If you were the sales manager, what would you do about the reps’ obvious lack of motivation to follow up on the leads generated by the mailing?

To start to boost the motivation among the reps’ I would start a contest. I would rate their baseline sales currently and then notify them that in 3 months we will meet again and compare their individual sales. The salesperson with the highest sales would win that quarter contest. I would then analyze the data and find out exactly how many sales are occurring from the mail-back card program. Once this data is placed in an easy to read format for the staff to see I would then place it on display so that they could check their progress daily. Having that information readily available may help give them the boost in motivation that they need.

  1. What are the possible reactions from the leads not contacted by D&M?

When a potential new client has reached out to the company offering more information and they receive no response back it may turn the potential client away all together. Once this happens then that may even potentially lead to negative publicity. Despite the saying that any publicity is good publicity, it is not when it comes to a business trying to gain new clients. All it takes is one negative statement or review and that can then be spread by word of mouth to countless potential customers who will already have that statement in the forefront of their mind.

  1. What is an “ideal” course of action given all the issues involved?

An “ideal” course of action would to first establish what areas need immediate improvement. The next step would establish what corrective actions need to take place to correct these areas. Once these are made clear, then an evaluation as to where the reps stand currently with their sales would need to be distributed. A set of goals for each salesperson would then be decided and displayed to see how close the salesperson is to reaching their personal goal. The standard plan would then need to be created so that all of the reps would have a starting point for them to be able to potentially exceed their goals.

  1. Write a brief step by step plan to handle this situation.

Step one would be to analyze the sales that each individual salesperson is currently maintaining. Step two would be to list potential areas that need to be improved and establish a timeline and corrective action plan as to when these will be corrected. Step three would be to individually meet with each salesperson to discuss what they feel can be changed to improve their sales. Once this is done, then an agreement would need to be made displaying the goals that they would like to reach in terms of sales per quarter and what additional tools are needed to reach these goals. The last step of this transition would be to display all of the reps’ current standings and update this weekly.

Case Study – D&M Insurance: “A Special Assignment”

Doug Bloom has taken over the Des Moines office for eighteen months already. Doug is finally feeling like he has his job under control. He also felt like he understood himself better and that he has grown as an individual. The next day he received a call at work from the vice president of marketing and sales for D&M telling him that he was given a special assignment. His special assignment was to plan for the phasing-out of independent insurance brokers in the mountain states of Montana, Idaho, Wyoming, Utah, and Colorado. Doug is surprised and realized the magnitude of responsibility. The vice president told him that he only has two months to complete a plan for starting the new sales managers. So, he met with the two sales managers and told them about the change in organization. Both of them were surprised and said that there is no way the plan can be kept a secret until they accomplished it. They decided to conduct another meeting next week to finalize everything and to think on how to “ease out” the 34 agents without suffering undue economic recriminations.

  1. How would you advise Doug to conduct the meeting with the two regional sales managers?

It is definitely a difficult situation for Doug as he has not only to convince and motivate the two regional managers in implementing the new company plan but also to ensure there is no significant loss of revenue in the immediate aftermath.

  1. How would you attempt to control the potential economic damage that may occur when switching from brokers to your own sales force?

The change would need to take place all at one time through-out the country, so as not to have any adverse effects on individual customers with stores in multiple regions of the country. The need to make the change all at once, probably necessitates that all new salespeople be hired over a short period of time, perhaps a month to six weeks.

Send letters to all customers announcing the change, explaining the reasons for it and emphasizing how Pilot could improve service to clients under the new program. Personal visits to the top accounts would also seem appropriate.
This emphasis on service necessitates attention to developing a good support staff that would need to be in place from the beginning.
To reduce the economic blow to the agents and discourage negative reactions, offer a commission plan following the change for a period of six months in exchange for their agreement not to compete with Pilot over that time period. They may be given full commissions for the first month, gradually declining over the six months.

  1. What would you suggest doing if one of the brokers asked you whether it was true that D&M was going to release all its brokers and switch to a dedicated sales force?

There is opportunity in this situation for ethical legal concerns. For instance, how much are you required to disclose to agents? Should you say things that may be misleading to agents?
On the other hand, this may not really be a simple question of tell/not tell all. There is no reason to conclude, for instance, that the company has to tell all its future plans or even their thoughts about the possibilities. They could say that all options are investigated. Revealing the plan at this time, six months before implementation plus at least six months for implementation, could have severe implications.

  1. What issues would you have to address in starting your own sales force?

How many salespeople are needed? Sources of recruits and selection criteria?
The extent of training and what kind of training? Span of control for sales managers?
How people will be compensated and evaluated? What is the role of the sales force?

The above questions focus largely on managerial issues involved in this situation. You should also be prepared to identify and discuss behavioral issues, especially associated with the meetings. There is a tendency for students to portray the vice president as somewhat dictatorial. Most groups will not pick up on the issue of how much direction should the VP offer or what sort of questions should Doug ask to cover himself. In some respects, these are the most important points to raise since they have more immediate implication for the students soon to enter the work force.

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