Laptop issuance to sales persons and return on investment - Research Paper Example

?Laptop Issuance to Sales Persons and Return on Investment The study conducted by Atrostic and Nguyen (2006) categorically declared that “the prevalence of informational technology (IT) means that just investing in IT no longer confers a competitive advantage” (p. 1). After all, business use of computers dates back to about 50 years ago. Could it really be possible that man has outgrown the need for the good old computer? However, what Atrostic and Nguyen (2006) actually meant was that the manner in which businesses use IT does matter. Hence, competitive advantage may be achieved depending on how businesses harness the power the computer. Research Question and Justification Hoskins (2011) maintained that the “laptop is tailor-made for business” (para. 1). Coincidentally, I overhead two neatly attired gentleman seated on the next table talking about their accomplishments for the day. The two appear to be sales people and were using information from their high-end laptops every now and then, either to support their assertion or to clarify their point. It is common knowledge that most companies issue laptops to their salespeople, presumably to facilitate presentation to prospective clients. But would the issuance of laptops to employees in charge of sales or marketing produce a corresponding return on investment? This paper was conceived to gather research-based evidence of the aforementioned quandary. Specifically, the study would address two research problems: (1) What are the advantages of using laptops for people engaged in sales? and (2) Is there a relationship between use of laptops by salespeople and increase in accumulated sales? The study will also test the null hypothesis that “there is no significant relationship between use of laptops by salespeople and an increase in their accumulated sales” based on a non-directional or two-tailed analysis and a 0.05 level of significance (0.05). The justification for this study rests on the premise that although empirical studies have already demonstrated the link between productivity and use of computers and IT, results have been generalized for the manufacturing industry, not strictly on the sales aspect. If a direct and significant relationship is confirmed between use of laptops as an aid to sales talk and presentations and corresponding increase in accumulated sales, it is highly possible that issuance of laptops to salespeople by the companies they represent does, indeed, produce a return on investment. Hence, this paper will serve as an exploratory study to pave the way for further investigation of the association between issuance of laptops to salespeople and return on investment. This study adopted a descriptive – exploratory methodology using a researcher-constructed survey questionnaire as the primary data collection instrument. The research instrument consists of three parts (respondent profile, advantages of using laptop for salespeople, and relationship between use of laptop increase in accumulated sales) and 10 items. Respondents of the study were salespeople selected using purposive sampling. It is a non-probability sampling technique wherein the sample is chosen on the basis of the researchers’ judgment about some appropriate characteristics of the sample, and is alternatively called judgment sampling (Zikmund & Babin, 2010). A small sample of 25 respondents served as resources for the study. Profile data were presented as frequency and percentage distributions in the form of a pie chart. Advantages of using laptop for sales people were shown as horizontal graphs. Methodology for examining the relationship between use of laptops and increase in accumulated sales is discussed in the results section of this paper. Review of Related Literature and Studies Jenkins (1999) outlined several advantages of using a laptop computer in sales in terms of: (1) professional image; (2) resource and time management; (3) information dissemination; and (4) customer interaction. In a customers’ perspective, the use of technology such as laptops provide benefits in four main aspects of customer interaction: salesperson professionalism, customer interaction frequency, salesperson responsiveness, and salesperson-customer relationship quality (Boujena, Johnston, and Merunka, 2009). Using a laptop allows a salesperson to present information in a clear and accurate manner. The use of audio-visual presentations helps enhance the customer experience by providing a potential buyer with information about the product or service in a professional-looking format which enhances the presenter’s credibility (Jenkins, 1999) By storing all important information about the product or service in a laptop, the salesperson is able to retrieve and present the information needed by the customer in a timely manner. In addition, it reduces the need to carry paper copies of information, making it more convenient (Jenkins, 1999). Laptops allow quick access to company resources, reducing the need to contact sales managers for information (Reday and Marshall, 2007). Furthermore, electronic copies of product or service brochures may be provided at the customers’ request (Jenkins, 1999). Laptops allow the salesperson to choose what and how much information about the product or service will be provided to the customer. Compared to desktop computers, a laptop enables the salesperson to conduct side-by side discussions with the customer. This creates a more personalized experience for the customer, thus creating more value and increases the likelihood of making a sale (Jenkins, 1999). By using audio-visual presentations and other sales aids, a salesperson will be able to effectively communicate with the customer without the need of carrying around bulky presentation materials or even the physical product itself. For product demonstrations, a simple video, diagram, or chart will be enough in comparison to bringing the actual product along, which might be impractical or unwieldy to the salesperson (Jenkins, 1999). The utilization of laptop computers in sales has allowed the reduction of paperwork, simplified account management processes, and made sales administration easier to control (Reday and Marshall, 2007). Similarly, The findings of Diewert and Smith (as cited in Atrostic and Nguyen, 2006) on productivity levels on a distribution firm show that the use of computers in purchase and sales tracking of inventories resulted to increased productivity. In turn, the improvement in productivity levels enabled the company being studied to handle increases in product or inventory variety while minimizing increase of inventory costs. The implementation of information technology tools in the workplace has resulted to enhanced employee performance despite initial resistance from some workers. Benefits of using IT tools include: assimilation of new knowledge and skills, enhanced presentation skills, and improved level of productivity (Ahearne, Hughes, and Schillewaert, 2007). Results Following are the results of the study. Profile of the respondents is presented using pie charts in Figures 1 - 5. As shown in Figure 1, the salesperson-respondents were male predominantly male. Males outnumbered the female respondents 4 to 1. This proportion does not necessarily represent the genders in the general population, firstly because purposive sampling was used. Figure 1. Distribution of the respondents in terms of gender Although respondents were taken from various areas of the state, it is always easier to spot male salespeople from their female counterparts because of their dress code. Three of the five female respondents in this study were with male salespersons when they were requested to voluntarily participate in this study. Figure 2. Distribution of the respondents in terms of age As depicted in Figure 2, almost one half of the respondents fell under the 25-35 age group, representing 48% of the study participants. Meanwhile, about one-third of the respondents were bracketed under the 36-46 age range. The youngest group of respondents, 18-24 years old accounted for 12% of the respondents, while only 8% of the respondents were categorized under the oldest age group at 47-60 years old. Figure 3. Distribution of the respondents in terms of educational attainment In terms of highest level of educational attainment, 8 out of every 10 respondents are either had some college or graduated from a vocational course. On the other had, as reflected in only 2 salespersons or 8% are high school graduates, and only 3 or 12% are college graduates. Figure 4. Distribution of the respondents in terms of average monthly family income Data from Figure 4 illustrates that 10 of the 25 respondents reported an average monthly family income in the range $2501-3000. Another 10 out of the 25 respondents earns either less than $2000 or in the range $2000-2500. Three or 12% of the respondents declared their average income to be around $3001-3500, while only two or 8% indicated that they earn more than $3500 on the average per month. Figure 5. Distribution of the respondents in terms of nationality It may be observed from the percentages shown in Figure 5 that 20 or 80% of the salespersons are either Americans or Asians, whereas the rest of the respondents, representing 20% reported their nationality as Europeans. The advantages of using laptops in the respondents’ line of work were presented and arranged as ranked in the horizontal bar chart in Figure 6. Data from Figure 6 revealed that all or 100% of the respondents believe that the main advantage of using a laptop in sales is the quick access to company resources. Ranked second as to advantage were credibility enhancement and timely retrieval of information with 20 or 80% of the respondents apiece. In third spot as advantage is systematic account management which garnered 15 or 60%. Meanwhile, results from Figure 6 illustrates that at rank four are clear and accurate presentations, and reduction of the need to carry paper copies of the information, with 10 or 40% of the respondents apiece who felt that these represent advantages of laptop use in sales. Figure 6. Ranked advantages of using a laptop according to the respondents On the other hand, the possibility of side-by-side discussions with prospective clients, and control on the type and amount of information to be disclosed received the lowest ranks at fifth and sixth places, respectively. These results corroborate Jenkins (1999) and the findings of Boujena, et al. (2009) and Reday and Marshall (2007). Findings as to the relationship between the use of laptop and increase in accumulated sales were shown in Table 1. Data from Table 1 revealed at 15 or 60% of the 25 respondents were issued their laptops in 2009 or about two years ago. On the other hand, 5 or one fifth of the respondents received their company -issued laptops in 2007. Table 1. Use of laptop and estimated accumulated sales Frequency (n=25) Percentage Year laptop was issued for sales purposes 2007 2008 2009 5 5 15 20 20 60 Average annual sales without laptop $50,000 - 75,000 $76,000 - 100,000 $101,000- 150,000 $151,000- 200,000 $201,000- 250,000 $251,000- 300,000 Mean Standard Deviation 7 10 6 0 2 0 $101,980.00 $51,903.80 28 40 24 0 8 0 Average annual sales with laptop $50,000 - 75,000 $76,000 - 100,000 $101,000- 150,000 $151,000- 200,000 $201,000- 250,000 $251,000- 300,000 Mean Standard Deviation 6 3 12 3 0 1 $114.166.00 $46,906.29 24 12 48 12 0 4 Perception that laptop was predominantly instrumental in the increase, if any, in accumulated sales Yes No Not sure 22 2 1 88 8 4 Table 1 also shows that 5 respondents had their company-issued laptop in 2008. From the data supplied by the respondents before they were issued laptops, 10 or 40% of the respondents posted accumulated annual sales ranging from $76,000 - 100,000. Only 7 or 28% reported accumulated sales in the range $50,000 - 75,000, while approximately one-fourth declared annual accumulated sales of $101,000- 150,000. The mean annual accumulates sales was computed to be $101,980.00. Standard deviation of the data was calculated to be over $51, 000. Meanwhile, now that the respondents have been using laptops as part of their sales routine, almost half of the respondents reported accumulated annual sales ranging from $101,000- 150,000. Approximately one-fourth of the respondents posted accumulated sales of $50,000 - 75,000. One respondent even reported accumulating sales in the range. $251,000- 300,000. The mean accumulated sales were calculated at $114.166.00 and standard deviation was reported lower than $47,000. When asked if they thought that their laptop was predominantly instrumental in the increase of their accumulated sales per year, 22 or 88% responded in the affirmative, while only 2 or 8 percent answered in the negative. Only one of the respondents was not sure if having a laptop is advantageous for salespeople. To determine profit from the accumulated sales, the following assumptions were made based on inputs from the respondents, themselves: 1. Basic pay per month is $1000 or $12,000 per annum. 2. Additional pay in terms of commission is 20% of their accumulated sales. 3. The company issued laptop cost $550 each. 4. Actual value of goods / services sold is subjected to 60% mark-up. 5. Net profit is determined by subtracting actual cost of goods or services sold and the operating expenses, which consists of the basic pay and 20% commission of the salespeople. 6. The 20% sales commission is taken from the profit and not from the accumulated sales. The net profit before issuance of laptop is computed by multiplying the accumulated sales reported by the each respondent by the 60% (gross profit) and subtracting the following: $12,000 (representing the wage per annum) and 20% of the gross profit (representing the sales commission). Hence for respondent no. 1 whose accumulated sales for the last year he/she had no laptop was $50,000, the gross profit is $30,000, and the sales commission is $6000. Hence the net profit is $12,000. The calculation procedure for the net profit after laptop has been issued is almost similar to the above-mentioned procedure except that the cost of the laptop issued is also subtracted. For the same respondent as above whose accumulated sales for 2010 was $60,000, the gross profit is $36,000, the sales commission is $7200, and the net profit is $16,250. A paired sample t-test was carried out to determine whether the mean profit during the last year when the respondents were not yet issued a laptop by the company differs from the mean profit when laptops have been used by the salespeople in their sales-related task. The results are shown in Table 2.   profit w/o laptop profit with laptop Mean 36950.40 42249.68 Variance 620698704.00 506926162.56 Observations 25 25 Pearson Correlation 0.890341 Hypothesized Mean Difference 0 df 24 t Stat -2.334892 P(T Read More