How Was the Hill-Rom Sales Force Organized Prior to the Reorganization?

1. How was the Hill-Rom sales force organized prior to the reorganization?

Prior to reorganization, the biggest problem faced by Hill-Rom sale force was a lack of segmentation.

Improper segmentation: The size of an organization was the primary segmentation factor for the sales force. As a result of this, the sales force ignored other potentially important attributes such as organizational requirements, patient’s needs, financial strength and the openness towards adopting latest technology and products.

Unorganized and disconnected salesforce: Hill-Rom had specialists for each product, who communicated with different people in the customer’s organization. Multiple specialists called different people in the same facility. This meant that there was duplicate communication that led to a loss of time and revenue for Hill-Rom. Even in the case when customers called Hill-Rom, the sales representatives tried to locate the appropriate service or support resource resulting in a loss of time.

Improper knowledge sharing: Under the old structure, the salesforce was treating all the customers in the same way. The sales provided them with the same level of knowledge about service and innovation even though the customers did not have the financial resources to invest.

All of these factors caused an increase in the overall spend on the salesforce and made the sales force highly decentralized.

2. How did Hill Rom segment their customers before the reorganization?

Before the reorganization, Hill-Rom had a simple and obvious customer segmentation based on the size of the customer’s facility. The size of the facility was determined by the number of staff beds, operating rooms and medical care specialties. The simple logic behind this segmentation was the belief that more beds was equivalent to more funds being set aside for reinvesting in the facilities. Although this measure helped Hill-Rom to deduce the average spending budget of a customer, it had its own pros and cons.

Advantages:

1. This was a tried and tested approach that had worked over the years for Hill-Rom and the salesforce was in its comfort zone.

2. The size of the facility provided a decent enough estimate of the frequency and the dollar value of the purchase made by the customer.

Disadvantages:

1. The approach did not factor the heterogeneity of the needs of the customers lumped together in a segment.

2. The focus was solely on the financial strength of a customer and did not consider the willing to spend, which was decided by certain complex

...