Our costs are out of control claimed Rosemary Harper chief
financial officer of Broadway United.
“In particular, I am really concerned about the level of marketing
costs, especially for sales force. With
a 235-person sales force, Broadway sells computer hardware and software
packages to financial institutions.
Harper supports the recommendations of a sales consulting firm to reduce
the sales force by 50% and to hire a new “sales force” consisting of
manufacturer’s agents who would be paid on a straight commission basis. The
reduction in the sales force would mean that 10 district sales managers would
lose their jobs. The sales training
manager position would be eliminated as well since manufactures agents do not
need training according to the sales consultant. Harper intended to keep only the best sales
reps and eliminate the others in the 50% reduction process. “Those experienced sales reps that remain
with Broadway will not need enough training to justify keeping Broadway’s training
department,” noted Harper.
What are the advantages and disadvantages of the sales
Is it possible for company to cut costs too far?