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Company B Analysis For SALE SOFT Inc

This document analyzes the potential impact of adopting the PROCEED software for Company B, which currently has annual sales of $350 million. It estimates that using PROCEED could reduce Company B's sales cycle by 15 days and sales rep turnover by 10%, resulting in additional annual sales of over $41 million. It also calculates that adopting PROCEED could lower Company B's annual selling costs by $12.71 million, with an initial cost of $6.27 million and a payback period of under 6 months.

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146 views3 pages

Company B Analysis For SALE SOFT Inc

This document analyzes the potential impact of adopting the PROCEED software for Company B, which currently has annual sales of $350 million. It estimates that using PROCEED could reduce Company B's sales cycle by 15 days and sales rep turnover by 10%, resulting in additional annual sales of over $41 million. It also calculates that adopting PROCEED could lower Company B's annual selling costs by $12.71 million, with an initial cost of $6.27 million and a payback period of under 6 months.

Uploaded by

Scyfer_16031991
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MARKETING I

SALE SOFT Inc.



Company B analysis for PROCEED

SUBMITTED BY: SECTION -A GROUP -11









SAGAR WARGHADE 2013PGP117
Company B analysis for SALE SOFT Inc.
PGP 2013-15 SECTION A Group 11
Company B
Industry Computer
Hardware
Annual sales $350 mn/yr
Selling costs (% of revenues) 35%
Variable component of sales
expenses
4%
# of sales reps 250
Annual rep turnover (%) 35%
Time for new reps to become
productive
90 days
# of PROCEED users 600
PROCEED licence fee $1440000
Implementation and training cost in
first year
$430000
Annual software and support
maintenance (% of licence fee)
20%
Hardware costs $3600000
Project start up cost $450000
Annual cost of internal resources $350000
Current selling cycle 180 days
Estimated reduction in sales cycle
using PROCEED
15 days
Estimated reduction in start up time
for a new sales person using
PROCEED
20 days
Estimated % reduction in rep
turnover using PROCEED
10%

Assume Work days per yr 300

# of new reps Annual rep turnover (%) * No. of reps 87.5/yr
Addn. Sales due to sales cycle
reduction
(Estimated reduction in selling time/Current selling
cycle) * Annual Sales
$29.17 mn/yr
Addn. sales due to reduction in start
up time for a new sales rep
(Days reduced in Startup time for new sales person/no
of days to start up)*(Annual Sales/no of reps)*(no of
days to start up/woeking days per year)* no of new reps
$8.17 mn/yr



Addn sales due to reduction in sales
rep turnover
Estimated % reduction in rep turnover * no of new reps
* (Annual Sales/ no of sales rep) * (Time for new reps to
become productive/Work days per yr)
$3.68 mn/yr
Total addn sales from using CSAS Addn. Sales due to sales cycle reduction+Addn. sales
due to reduction in start up time for a new sales
rep+Addn sales due to reduction in sales rep turnover
$41.01 mn/yr


Annual costs with PROCEED Annual sales+Total addn sales from using CSAS $391.01 mn/yr

Selling costs without PROCEED Selling costs (% of revenues) * Annual sales $122.5 mn/yr
Selling costs with PROCEED Selling costs without PROCEED + Total addn sales from
using CSAS*Variable component of sales expenses)
$124.14 mn/yr
Selling costs with PROCEED Selling costs (% of revenues) * Annual costs with
PROCEED
$136.85 mn/yr
Difference Selling costs with PROCEED - Selling costs with PROCEED $12.71 mn/yr

Initial costs Hard ware + PROCEED license fee + start up +
Implementation & training costs + annual costs of
internal resources
$6.27 mn/yr
Payback time Initial costs / Difference in costs 5months 27 days

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