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Profit Improvement Report Glynn General Extended Protection Plans Your Competitive Advantage in a Competitive Market Glynn General Benefits n GGC's underwriting partner is AmTrust International which is A rated by AM Best with over 100 years of collective underwriting experience in the Construction and Agricultural Equipment global markets. n GGC has over 27 years of experience administrating extended protection plans. This ensures competitive premiums while also providing fair and reasonable claims reimbursement. n GGC's knowledge and experience allows for the creation of tailor made programs to meet any need you may have. n An internet accessible administrative system that is efficient and user friendly. n GGC reimburses parts at customer list price and labor at shop rate on all approved claims. n GGC's program provides peace of mind for your customer knowing that their equipment is protected. Coverage Types/Coverage Terms n GGC offers extended service protection plans for New and Used Equipment n Power Train, Power Train + Hydraulics, and Full Machine n Used Equipment terms available from 3 months to 2 years n New Equipment terms available from 2 years to 5 years GGC's Administrative System via the Web n GGC offers superior administrative capabilities via the internet through our user friendly website: www.glynngeneral.com. n Immediate turnaround of quotes. n Confirmation of the terms and conditions for all available service contracts. n Efficient enrolling of units with auto- matic invoicing. n User friendly claims processing result- ing in satisfactory claims reimbursement. n Account access allowing for constant monitoring of your warranty program. Contacts in your Region GGC administrative/claims office located in St. Simons Island, Ga Vice President Operations Slade Rowland 912-638-4320 Vice President Sales Rick Stacy 404-791-9382 Eastern Territory Manager Greg Schultz 678-697-2715 Midwest Territory Manager Ryan Carter 847-226-6265 Western Territory Managers Jeremy Cockroft 970-946-8132 Brian Freitag 970-946-8133 ("Nowhere to Hide: Surviving the Recovery by Deploying an Efficient Sales Force" continued from page 46) growth must be taken out of a competitor's share. Ultimately, the key to generating a continually higher level of sales growth is enhanced perfor- mance by the sales force. Cost of Goods Not Sold As long as the economy is growing briskly, an ineffective salesperson is a minor problem. A poor salesperson here, a poor one there; the good ones generate enough volume to cover up the problems. However, as the economy becomes less supportive of automatic growth, this scenario is no longer viable. Exhibit 1 looks at the profit impact of an ineffective salesperson for the typical member of AED. The first column of numbers demonstrates total company performance. As indicated in the CODB Report, it is a $35 million firm with a bottom line profit of $700,000 or 2 percent of sales. The only detail that might not be clear is that the sales force is being paid a commission equal to 10 percent of the gross margin dollars. In addition, there are other variable expenses equal to 4 percent of sales volume. The second column simply assumes that there are 12 salespeople and that every territory is exactly equal in potential. Mathematically, all of the numbers in the first column have been divided by 12. The last column examines the profit impact of a salesperson who only produces 80 percent of what a typical salesperson would produce in the same territory. This is not 80 percent of the top salesperson, but the average one. As can be seen, the territory that should generate $58,333 in profit actually has lost $31,208. The difference between the profit the terri- tory could have generated and what it actually generated is what the I have termed Cost of Goods Not Sold. This is a loss that is never seen on the income statement because the performance of the poor salesperson is offset by the performance of the good ones. All the firm tends to focus on is the aggregate results in Column 1. In the short run, in every territory, some sales volume is better than none. In addition, the costs of replacing a Exhibit 1 - The Challenge of Under-performing Salespeople For the Typical AED Member Income Statement-$ Current Results Per Salesperson 80% Salesperson Net Sales Cost of Goods Sold Gross Margin Expenses Sales Commissions Variable Expenses Fixed Expenses Total Expenses Profit Before Taxes Cost of Goods Sold Gross Margin Expenses Sales Commissions Variable Expenses Fixed Expenses Total Expenses Profit Before Taxes 48 | www.cedmag.com | Construction Equipment Distribution | October 2012 ggc_ad.indd 1 12/9/11 2:01 PM $35,000,000 27,475,000 7,525,000 752,500 1,400,000 4,672,500 6,825,000 $700,000 100.0 78.5 21.5 2.2 4.0 13.4 19.5 2.0 $2,916,667 2,289,583 627,083 62,708 116,667 389,375 568,750 $58,333 100.0 78.5 21.5 2.2 4.0 13.4 19.5 2.0 $2,333,333 1,831,667 501,667 50,167 93,333 389,375 532,875 -$31,208 Income Statement-% Current Results Per Salesperson 80% Salesperson Net Sales 100.0 78.5 21.5 2.2 4.0 16.7 22.8 -1.3