McGraw Hill Case Study
Grant Senter and James Paulsen
Baylor University
Recap

Sales Process

Sales force Structure

Compensation

Sales Training
Sales Process
Sales force Structure
Compensation

Sales representatives will operate on a straight base salary of 60,000.

Sales representatives can achieve a bonus of 10% of your current salary based
off the group performance of the district manager’s sales team. T
Sales Training

Sales training will be given more of an emphasis as the new sales training
program will be 3 months long for recent undergraduates.

Experienced Sales Professionals will have a training process of 2-3 weeks.

E-Learning modules will have to be completed quarterly and will cover
every aspect of the sales cycle. Sales professionals will be trained on
products, the proper sales process, and additional learning
Financials:
Expenses:
Increased Revenues:
Training- 30 million dollars
(100,000 increase per sales rep)
Training- 5,000,000
18 Product Specialists- 900,000
Implementation- 200,000
Bonuses- 720,000
Compensation- 9 million
Sales force structure-15 million
dollars ( 50,000 increase per
sales rep)
Total Expenses= 2.77 million
Totals
Increased Revenues: 54 million
dollars
Savings: 2.4 million dollars
Expenses: 2.32 million dollars
Increased Profit: 53.63 million dollars
Issues
Pros:
-Customer Satisfaction
-Training Program
-Sales force structure
Cons:
-Innovation
-Unsustainable Growth
-Recruitment Program
-Compensation Structure
Innovation
“The decisive actions we are taking today will reduce
our debt and improve our capital structure to support
our long-term business strategy of transitioning from
traditional print models to digital educational and
research materials.”
-Michael Hansen, Cengage Learning’s Chief Executive
Officer
-85% of American Association of Educator members incorporate
technology in their lesson plans.
-58% agree that that textbooks will be phased out with digital
content, including interactive and adaptive multimedia.
Unsustainable Growth
Success
Recruitment Program

Does not hire anyone with prior selling experience.

Does not hire talent straight out of professional selling programs or
recent college graduates.

These methods limit the talent of the organization and are based off
a false assumption that experienced sales professionals will not be
able to adopt the consultative sales methods of Prestige Worldwide.
Compensation Structure
Example:

History and Political Science: 0%

Business and Psychology: 15%

Math and Economics: 2%

Biology and Physics: 3%
Potential Issues:
-
Unbalanced growth plans
-
Lack of management in the decision making
Recommendations

Focus on technology


Implement positive Prestige Worldwide Tactics



Adapt, React and Advance
Customer Satisfaction Surveys
Training Program
Ignore the Negatives

Recruitment Program

Textbook initiative

Sale force structure—Product Specialist

Compensation Plan


70,000 base salary with a 10% bonus available among district teams.
Sales representatives will be rewarded with 10% increase in base salary every time they are
able to achieve 100% of quota for 5 consecutive quarters.
Implementation Process
January
January
Inform experienced reps of
the new policy
Training of
experienced reps at
main office
June
Experienced
reps must have
logged second
E-Learning
session
January
New recruits begin three month
training
June
Break down
region by
district
success
June
Send out
customer
surveys
March
Experienced reps
must complete first
E-Leaning session
June
Send directors
to the least
productive
districts. He
will train,
advise, and
advance the
process in these
districts
March
Conduct ride along,
district mangers observe
sales reps
June
Evaluate
Customer
surveys and
take action
accordingly
March
Make sure new
sales reps pass
certification to
enter the field
Financials:
Costs over 10 years
Purchase Prestige Worldwide: $2.5 Billion
Implementation: $2 Million Dollars
Raised Salaries/New Pay Structure: $34
Million
Contracting Fees: $2 Million
Total: $2.88 Billion
Revenues over 10 years
Revenues: 2.5 Billion
300 million/year at a decreasing rate
Takeaways:
• Payback period: Over 10 years
• Uncertainty of Textbook Industry