Mary Kay Cosmetics: Sales Force Incentives
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Transcript of Mary Kay Cosmetics: Sales Force Incentives
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Mary Kay Cosmetics: Sales Force Incentives
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Company Background
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1963 ◦ Start-up Capital: $5,000;◦ Employees: 10
2011 ◦ Net Sales: $2.9 billion;◦ Salespeople: 2.4 million;◦ Employees: 5,000
Ave Salespeople Turnover Rate: 68.6%
Fact Sheets
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Sales
◦ Wholesale Value
◦ Number of active recruits
Direct Selling
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Communications
◦ Written Material
◦ Telephone Hot Line
◦ Regular Solicitation of Feedback
Sales Force Support
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Recognition and Prizes ◦ “ A $5 ribbon plus $20 worth of recognition is
worth more than a $25 prize. ”
Sales Force Support Cont’
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Events: ◦ 3-day Annual Seminar
◦ Contest
◦ Conference
Sales Force Support Cont’
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Incentives ◦ Financial
Retail Mark-up Commission Bonus
◦ Nonfinancial Ribbons; pin; blazers “Special” buttons;
pins; blouse, etc. Pink Buick or Cadillac;
Annual Summit Meeting, etc.
Sales Force Support Cont’
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Two Stages: ◦ Initial Qualification ◦ Maintenance
Three Targets to Meet:◦ Team monthly wholesale value ◦ Personal monthly wholesale value ◦ Number of active recruits
The VIP Car Program
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Lack of Incentives for Sustainable Improvement
High Cost
Problem of VIP
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Car Expense as % of Sales
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Commission as % of Sales
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Company’s Solution: ◦ Increase in Requirements for VIP Qualification
Consequence More Rush-intos and Less Competent Directors; Disappointed Sales Force
Solution?
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Recognition Sometimes is more Important than Money;
Incentive System can be a Double-edged Sword;
Morale is almost Everything for Sales Force
Lessons
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Thoughts?