London Life Insurance Company - Assignment Example

?London Life Insurance Company Introduction London Life Insurance Company was formed during 1874 in the region of London in Ontario, Canada. The insurance company by the close of 1988 endeavored to gain a national presence in the Canadian region through its operation spread along various offices created in major cities in Canada. Sales and administrative operations of the company were supported by a professional team of around 2,700 and 2,600 working as the sales and administrative workforce for the company respectively. The product mix of London Life Insurance Company was duly optimized through encompassing a large number of benefits pertaining to life, disability, medical and group insurance products with also existence of other retirement and saving plans. Through the use of the Group Insurance Plans the company was able to enhance its sales network with the corporate client base encompassing around 16,000 different concerns. The management and administrative functions within the London Life Insurance Company was effectively synchronized through the use of information technology connecting the activities of the different branches. Moreover, London Life Insurance Company being a member of the Trilon Financial Corporation concern an its enhanced affiliation with the Royal Trust in the region contributed in development of its network base in gaining potential customers in the region. Strategic activities carried out by the company relating to market and product development along with restructuring the organizational objectives contributed to the gaining of assets amounting to around $ 8.5 Billion. Enhanced focus rendered to the parameters of customization and personalization helped the company in becoming a market leader pertaining to financial and insurance products in Canada (London Life Insurance Company 854-855). Problem Statement The main problem that Ralph Simon faces relating to the salespersons pertains to the failure in understanding of the process of motivating them to sustain and enhance their sales activities pertaining to insurance and financial products. The compensation received by the people in terms of commissions and bonuses failed to effectively distinguish between the new sales force and the old thereby reflecting a lack of motivation in terms of enhancing the spirit of the new members. Ralph Simon also countered a problem relating to the Monthly Activity Report for the Points rendered refer more to the ‘Efficiencies’ of the individuals in gaining appointments and closed and open deals rather than assessing the ‘Effectiveness’ of the individuals based on the amount of insurance business sourced from the market. This feature was inferred by Simon in reducing the operational effectiveness of the company for increasing the inability of the company in gaining new leads. Simon also visualized the existence of a problem wherein the new sales persons were required to handle surmountable amount of work loads and responsibilities pertaining to the meeting of targets and gaining new contacts while the experienced sales people enjoyed over the existing contacts and other renewals carried out by the customers. This feature reflected the existence of role conflicts and role ambiguity that in turn contributed in reduction of the motivation of the sales people and thereby required adequate management intervention (London Life Insurance Company 858-859). Analysis of Alternative The first alternative that can be sought relates to the creating of a basic salary slab for the sales people in the concern. This salary slab can range from $20,000 to $52,000 relating to the composition of new and old people in the sales team. Fixation of the salary slab would help in adequately motivating the sales people through rendering of financial incentives in the form of increments based on their performances. Salary increments put in place relating to the number of new contacts gained in by the salespeople would rather motivate the new people in the sales team to make larger numbers of positive contacts and closed deals. This policy would also reduce the dependency of the old people in the sales force on existing business and renewals. The increment slab would also be made to range from 10 to 15 percent of the basic salary to be made applicable after one year of full term employment such that the individual meets the effective target set for new contacts. Targets for new contacts could be set to range from 30 to 60 taken on a monthly count wherein ‘effective targets’ or closed deals should range from 10 to 20 or around 33 percent of the new contacts made. Thus the yearly counts or benchmarks for the ‘effective targets’ was fixed to range from 120 to 240 for the increments to be effective upon. This financial incentive structure based on increments would contribute to the enhancement of the motivation of both the new and old sales force members to help the organization gain new heights. Though the above process highlighted would have led to rise in the cost of employment for the concern yet on the other hand it would also contribute in expanding the business and sales network for London Insurance Company in Canada. The second alternative can be planned relating to the enhancement of the use and rendering of the ‘Efficiency Points’ based on the number of prospective cases closed. The existing process consists of rendering the points based on category of appointments, open and closed cases and also on the number of suspects gained in by the sales people during their regular course of work. However basing points on the above parameters and evaluating the efficiency of the individual based on the points gained distracts the attention of the manager from the clause in whether such contacts made or suspects gained has gained true effectiveness in gaining business for the concern. Points rather can be attributed depending on the yield an individual draws from formulating and working on the contacts made rather than limiting the same to the parameter of appointments generated and open and closed calls. Closed calls also consist of ‘Rejection’ of the offers made to the clients thereby making the deal to become closed. Thus attributing a point to the closed cases must be effectively monitored as to whether the deal closed has resulted business for the firm. Basing the points on the parameters of ‘Appointments Made’, ‘Prospective Deals Generated’ by subsequent visits and ‘Effective Deals Closed’ with documentation completed would help in gaining a true picture of the performances rendered. Depending on the same the same the person with the highest points gained can be effectively rewarded and recognized in monthly sales meets conducted. Herein financial rewards in the form of monetary incentives can be generated to the individuals or also the individuals can be adequately rewarded with ‘Performer of the Month’ award with a prize money or gift attributed to the event. The third alternative can be gained in by dividing the entire sales region into effective territories for each of the different individuals employed in the sales force. Dividing the region on the basis of territories would help the manager assign different amount of volume and amount targets for insurance and financial products marketed by the company. Effectiveness in the management of different territories can be enabled through assigning larger ones on the basis of experience and knowledge of the individuals in the sales team. Likewise larger sales territories with higher number of targets can be related to the individuals like Donald Widner and David Southcott than that apportioned for Roy Girard and Linda McCallum. This division made on the level of experiences and knowledge domains would thereby help render a larger space for the new people like Roy Girard and Linda McCallum to perform upon. Moreover targets sets based on individual potencies would help in enhancing the evaluation of the same by the sales manager. Again from the case it was found that the old people like Donald and David worked little to source for new contacts. Rather they worked based on the existing contacts gained earlier that resulted in helping them gain increased amount of compensation and bonuses in comparison to the new entrants. Thus division of targets based on individual expertise and experience levels would require these persons to perform in order to gain more new and effective business contacts or move over to the level of assistant managers. Division of the entire region into adequate territories enhances the responsibility of the different individuals in the sales team. This process would make them largely accountable to the gaining of business revenue for the company in an ethical fashion. The same also contributes in helping the managers effectively monitor and evaluate the performance of the different individuals operating in territories assigned based on the targets set. Thereby the above process also enhances the method of appraising individual performances and contributions in the sales activity as a whole. Recommendation The third alternative highlighted relating to the division of the entire sales region rendered to the different individuals to work upon based on separate territories is considered as the best alternative. Creation and rendering of effective sales territories helps the sales management in gaining detailed focus of the region pertaining to the demands and expectations of the consumers depending on which the products offerings can be rendered. This process thus gains effectiveness in meeting the new business objectives of the company in customizing the product and services to meet enhanced needs of the consumers. Moreover the designing of effective sales territories also helps the sales management effectively devise on sales targets relating to the number of calls to be made and the volume and amount of business required. Different sales territories have different structural considerations which in turn help the company management in reduction of cost related to travelling. The costs of travelling can be reduced through the ideal structuring of routes for each of the different sales people allocated along the specific territories. Again the calls made by the sales people can also be effectively monitored by the sales manager based on the expected business prospects and potentials of the different regions or territories. Such activity would lead the sales manager reduce the incidence of increase in the number of calls not related to the business and thereby gain both efficiency and also in reduction of call costs. The sales managers need also work in rotating the individuals allocated along the different sales territories so as to reduce the effect of getting mundane working in a certain zone for a longer time period. This process also helps in optimizing and enhancing the potentials of the different individuals in the sales force through introducing them to face new challenges in the new territories assigned to them. Division of the individuals in the sales team along the different sales territories can be carried out effectively by matching the requirements of the region with the experiences and qualities of the different individuals. Matching of such parameters helps the company in rightly achieving and enhancing its business objectives and potentials respectively. Similarly the total sales target for the concern can be effectively apportioned through the use of ratios created based on consumer buying potential in the different regions. Allocation of targets based on the above process contributes to the enhancement of the parameter of accountability and responsibility of the sales people appointed to effectively meet such. London Insurance Company through the use of such sales territories created can effectively work in enhancing and modifying the scope of its corporate and retail products to gain larger market coverage. Existence of large number of corporate hubs relating to a specific sales territory would eventually help the company in gaining prospective corporate clients which in turn would contribute in enhancement of market share, potential revenues and business profits. Apart from the above underlined causes for selecting the creation of sales territories as the best alternative it is observed that such process culminates to the enhancement of the motivation level of the people deployed to perform in the individual territories. The effective division of the expected sales turnovers or targets both in volume and quantity amongst the different sales territories creates adequate room for the individuals to perform and gain on incentives and bonuses. This fact would trigger the interests of the individual sales persons to perform in a much focused fashion in helping to enhance the market shares and revenues of the company in the different sales territories. The emergence of a healthy competition amongst the people in the sales team thereby in a holistic fashion helps the company to meet new objectives. In addition designing of effective sales territories contributes in helping the people employed in conducting sales meet the sales targets set in a much quicker fashion. This fact thereby helps the people employed in sales force to effectively balance time between their family lives and workplace in rightly making the job environment more flexible in nature. Enhancement of the parameter of flexibility thereby helps in increasing the accountability and responsibility of the sales people to meet the end goals of the concern. Further the designing of different sales territories would also lead the concern gain adequate focus on product and market planning and development functions. This fact would also require the company to devise adequate marketing, promotional and training programs to thereby help enhance the efficiency and effectiveness of the sales people related to the different sales territories. Enhancement of training functions and incorporation of individuals to such activities thereby helps in motivating the sales people. The sales people through the above functions would gain an effective stand in participating in managerial decision making activities such that feedback would be gained from them pertaining to the necessities of the consumers related to the different territories. Adequate training programs created and pursued would also help in enhancing the level of interaction of the consumers with the management body which in turn reduces the chances of role ambiguity. The sales persons having gained clarity and knowledge of the business objectives in a refined fashion tend to operate more effectively in the different territories allocated. Designing of sales territories in a sales activity related concern helps in empowering individuals pertaining to sales to take decisions on their own to conduct effective selling and thereby enhance the market share and revenue for the concern. Again designing of effective sales territories would also help the individual related to sales to efficiently work on time management functions and thereby can adequately divide time between their work and family lives. Similarly the sales persons operating in specific sales territories tend to act as potential mediums to enhance the relationship between the company and the consumer groups pertaining to the region. Henceforth the third alternative relating to the division of the entire sales region into specific territories is found to help in the mutual growth of both the company and the sales persons. Implementation The implementation plan relating to designing an effective sales territory includes evaluation and study of the route in terms of transport points and route links based on road and rail travel. The second activity in the implementation plan relates to conducting of effective consumer surveys in the region based on certain specific parameters pertaining to income level of the people, household and corporate demand, existing consumer bases for the products, other demographic factors relating to age groups of the consumers and also other competitive insurance and pension related products used by the people. Survey conducted on the above note would help in effectively positioning the insurance, pension and other financial products dealt by London Insurance Company in the region. Again for the understanding of the consumer demand for the mortgage product specialized surveys can be designed to understand the housing market situation in the region. Thirdly the sales managers having identified the regions comprising of prospective consumer bases can ideally highlight such in the planning and formulation of the sales territory maps. This activity would help render effective focus in such areas and thereby in drawing needed business from such regions. Fourthly the activity concerns in allocating sales staffs pertaining to such categories such that the most experienced and old staff is rendered the route with high income level consumers to help easily convert such into profitable leads. Herein the sales managers are also required to map the routes to be used by the sales persons such that cost and time related to such is planned accordingly with the use of rail and road routes. Fifthly having allocated the routes and territories for different sales persons the sales manager would be also required to set targets and benchmarks based on calls made, appointments generated and deals closed and thereby monitor the activity of the people on the same parameters. This implementation plan would rightly help Ralph Simon gain the optimum amount of benefit from the different sales persons both experienced and new in gaining business and reducing business cost. Works Cited London Life Insurance Company. Case Study. No date. Print. Read More