Sales force automation uses software to streamline the sales process.

Question

Sales force automation uses software to streamline the sales process. At the core of sales force automation is a contact management system to track and record every stage in the sales process for each prospective client, from initial contact to final disposition. Kravner Industries should invest in a dedicated sales force automation program to improve its sales.

Which of the following would be most useful to evaluate the likelihood that the plan outlined above would be successful?

(A) How many customers currently use sales force automation programs?
(B) What would the sales force automation program cost Kravner Industries?
(C)What fraction of Kravner Industries potential customers are already Kravner Industries customers?
(D) How significantly would the degree of effectiveness between initial contact and final disposition vary for the new sales force automation program?
(E) How many of Kravner Industries’ competitors currently use sales force automation programs?

linhqm · Accepted Answer

The plan is to invest in a dedicated sales force automation program to improve sales.

(C)What fraction of Kravner Industries potential customers are already Kravner Industries customers?
If the fraction is 30%, hence they should invest in the sales force automation program for there is till plenty of room to gain sales. However, if the fraction is, say, 90%, why would Kravner invest in the force while the majority of the potential clients are already it's clients?

(D) How significantly would the degree of effectiveness between initial contact and final disposition vary for the new sales force automation program?
In order for the plan to be successful, it has to help K improve sales. This choice is about maintenance/operation/quality control aspect, it does not help K to gain sales at all, i think if the aim is all about retaining current customers then this could be it

Hope it helps

mgcon · Answer

Premise (would be really easy to understand if you have come across a sales force product):
Salesforce helps companies to track leads & annotate each & every sales contact. The tool would be most effective to add to an organization if most of the potential clients have not enrolled for the service (from the given options in the stem). Hence, option C stands.

SWAT09 · Answer

Am not from sales..but i understand that the software is intended to improve customer service by tracking and storing all the information of a company's customers. And satisfied customers can help increase sales..the only option talking about customers is option C

however am waiting for someone to give better reasoning...

sucal000 · Answer

Please do correct my reasoning:

C) says fraction, but it does not represent quantity; even 99% potential already customer but 1% may still represent a huge number, say 10k.

D) evaluate existing and new program effectiveness, imo through D) we can better determine the likehood of the plan to be successful

naturalimproviser · Answer

For the plan to be successful, Kravner Industries should be able to improve it's sales through the new sales force automation program.

Let's have a look at the answer choices.

(A) How many customers currently use sales force automation programs? -  This would be extraneous information and would not be much helpful in improving sales for Kravner Industries, also we have no idea if the software is even for the customers. - Irrelevant 
(B) What would the sales force automation program cost Kravner Industries? -   This is a tempting choice, but the problem is that we have no idea about how Kravner industries was investing prior to this to improve their sales. - OUT OF SCOPE 
(C)What fraction of Kravner Industries potential customers are already Kravner Industries customers? -  This would be useful information as Kravner industries would then be in a better position to judge, target and invest on new prospect customers. Correct!! 
(D) How significantly would the degree of effectiveness between initial contact and final disposition vary for the new sales force automation program? -  A trick choice, the effectiveness would be a key factor to evaluate but with option "C" we have a better choice.  
(E) How many of Kravner Industries’ competitors currently use sales force automation programs? -  None of our business - OUT OF SCOPE

richirish · Answer

Very good question, D is a great trap choice.

IanStewart · Answer

I don't see how this question has a good answer. Of course, if this company has a monopoly, and has no potential to increase sales, there's no reason to invest in a product to increase sales. So I suppose C is useful to evaluate, just to rule out that possibility. But that's the only reason we'd care about C. Most of the time when you evaluate C, you'll find that yes, there are potential customers out there.

Crucially, there's no reason to think that adopting this automation system lets a company attract new customers. The system only becomes relevant once there is an "initial contact". So we can presume that the system only increases sales if these initial contacts more often turn into actual sales. I assume that's what answer D is trying to convey, but there's no way to tell because answer D is not written in English:

(D) How significantly would the degree of effectiveness between initial contact and final disposition vary for the new sales force automation program?

If I guess what D intends to say, it seems to me to be the only reasonable answer here though.

richirish · Answer

I think you are missing a key point, it clearly says "prospective clients", evaluating the efficacy of the new process is secondary, the first thing one needs to ascertain is whether there is need for such a system. For eg. If majority of your business comes from repeat customers why would you even bother investing in a sales software to target more prospective clients when you bread basket is already full.

I think you are assuming facts not mentioned in the question, I can relate to the question as I work in sales but yes I do see your logic behind D, but I feel C is a stronger choice in my opinion. Its the first elimination filter of sorts.

IanStewart · Answer

I'll grant that I might be missing a key point, because I find the writing in the question opaque. But from the stem, the sales force system only comes into effect for prospective clients "from initial contact". There's nothing in the stem that tells us that "sales force automation" will lead new people to make that "initial contact". So it is not a marketing or advertising campaign that we're evaluating (if it were, of course the size of the potential customer base would be important) -- we're evaluating a system that only kicks in once someone contacts the company.

So if this system does nothing to attract new "contacts", whether potential new contacts exist in the world actually doesn't matter (that's how I interpret "potential customers" in C, but because the question doesn't bother to define "prospective clients" or "potential customers", there's no reliable way to interpret what these phrases mean). Sales can then only increase if a greater number of "initial contacts" are converted to sales because of the system, or if each buyer ends up buying more things because of the system. So it then comes down to how effective the system is, once a client is 'in the system'. I don't understand what D is saying, but it's the only answer choice that appears to mention the system's effectiveness, so as I'm interpreting the wording, it's the only answer that seems justifiable to me.

The wording is ambiguous enough, though, that if you defined some of the terms differently from how I am, you could justify another answer.

NeoNguyen1989 · Answer

(A) How many customers currently use sales force automation programs?
=> doesn't affect on whether the implementation of the process will improve sales

(B) What would the sales force automation program cost Kravner Industries?
=> cost is not a part of the conclusion which is about the likelihood that the process will improve sales

(C)What fraction of Kravner Industries potential customers are already Kravner Industries customers?
=> CORRECT the process will improve sales if the Kravner has many customers that they haven't sold products. The likelihood to sales depend on the potential size of the prize. In other words, you can only improve sales if the potential for extra sales exists

(D) How significantly would the degree of effectiveness between initial contact and final disposition vary for the new sales force automation program?
=> common incorrect choice of test makers. They want to have a answer choice about comparison between internal factors of a process while the question demands us to evaluate the effectiveness of the total process

(E) How many of Kravner Industries’ competitors currently use sales force automation programs?
=> another favorite answer choice of the test makers. It use endorsement of experts or common practice of competitors that is without proof of success to justify the likelihood of sucess of a plan.

ShreyasJavahar · Answer

D seems to make more sense than C.

C -> What is the conversion rate of potential customers to customers? Without this information, C cannot help us determine if the automation tool is needed or not. If the conversion rate is 100%, would the tool be needed? If it is 99%, does the cost justify the adoption and the price of doing so? Will the tool actually guarantee that increase? (btw, D helps evaluate this last question).

D -> If the degree of effectiveness varies significantly such that the cost of adopting the tool is justified, then it makes sense to adopt it. Arguably, the degree of effectiveness could vary positively or negatively with current efficiency levels thereby making the evaluation of D crucial to the decision to adopt the tool.

VerbalBot · Answer

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Sales force automation uses software to streamline the sales process.

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