Furniture Brands in a conference call last week announced they are requiring all reps to send in weekly call reports detailing their activity. Ralph Scozzafava, CEO of Furniture Brands, announced the new requirements at a conference call last week and told reps from all divisions, "riiiight, we're going to need those reports in by Friday, m'kay?"The call report has several columns to be completed by the rep: 1) retailer visited 2) length of call 3) products retailer passed on 4) floor space lost since last visit 5) number of times dealer referred to company as a sinking ship 6) is the retailer aware of the bonuses we gave ourselves in 2008?
One Furniture Brands executive told Furniture Tomorrow they have made one change since the first conference call to the weekly call report policy, "yeah, it's just we're putting new coversheets on all the reports before they go out now so we'd like the reps to remember to do that from now on, that'd be great. All right!"
Furniture Brands filed an 8K with the SEC earlier this week to announce the material change in business and operations and told shareholders they believe the weekly call reports will return the company to profitability.
So, the reps can do another BS report while they are looking for new jobs in any-industry-but-furniture.
ReplyDeleteThe most ridiculous thing about these sales reps reports is that it is inferred that Furniture Brands management team has some idea of what it is takes to be a furniture sales representative and how these people should do their jobs.
ReplyDeleteAre they providing their reps with more new products, better values, more advertising and promotional activity or are they just telling them to sell more or else?
Here is an example of just how in the dark this management team is when it comes to sales management. Exactly one year ago Ralph Scozzofava and Alex Hodges, then the new Chief Marketing Officer at Furniture Brands told Bill Tully the VP of sales at Drexel and Russ Towner the VP of Sales at Henredon that they each had to hire two Regional Sales Managers to help them manage their 20 to 25 person sales organizations. They both said this was not necessary but were told this was not an option. Furniture Brands then hired an agency to look for candidates for these new positions and contacted a number of individuals to interview for these new regional sales manager positions. A month later not only did Furniture Brands decide that they did not need these additional sales management positions and that they could not afford these new positions but they also fired the two Vice President’s of Sales at Drexel and Henredon. Within a month they went from having 2 sales managers and saying they needed another 4 sales managers (6 total) to having NO sales managers.This kind of all over the board strategy changing is clearly proof of not knowing what one is doing and actually borders on making one an idiot at what they are doing. The executive management team of any company should not be the level for “learn as you go or on the job training”.
The old saying, “the beatings will continue until morale improves” does not even make sense here. This is because their sales reps will not let them beat them because they are not making any money. The huge sales volume and market share losses of all of the Furniture Brands companies has created sales positions that are close to being worthless to reps. The only reason any Furniture Brands reps are still working for Furniture Brands companies is because they have not found new jobs yet or because they are waiting for a coup / regime change .
If these sales representatives are doing such lousy jobs then why doesn’t Furniture Brands just fire all of them ? The answer to this is very simple, because they can’t. There no longer are any sales rep jobs with any earning potential available at the Furniture Brands companies and because of this if they fired all of their reps they would
not be able to hire any new reps because the jobs are so low paying.
To hire new sales representatives they would need to offer monthly guarantees, pay expenses or pay salaries which all would require additional money and we all know that Furniture Brands does not have any additional money for anything except for paying the bonuses of the executive management team. Their sales reps are a variable cost that has become very low for the company because the sales volume is now so low. Maybe Ralph Scozzofava will at some point it time even claim that this was part of his shared services cost reduction plan, “we intentionally took the top line sales volume down to reduce our sales commission expense” ?
For Furniture Brands it is now all about how long the cash holds out. It is not a matter of making money any more but just a matter of how long the cash holds out until the company starves to death. With the executive management teams history of paying themselves ridiculous bonuses as the company looses more and more money this could be sooner than anyone realizes. What is their bonus plan for 2009 based upon, surely once again something other than earning a profit ?
On a positive note, there is one thing that Furniture Brands executive management team can do right now to stop their sales declines and even possibly increase sales volume with their customers, “start the rumor that they are all leaving”.
Excellent post
ReplyDeleteManagement's stupidity is almost breath taking
I spent many years working for Henredon as a sales rep. The pride of representing the company...the pride in selling high quality , well styled products ....the pride in being on a team of sales professionals that were best of breed.....and the strength behind the brand...made it one of the industry's premier jobs. When a rep left a territory, there was always a deluge of interested applicants to fill the slot. My, has that changed. Today, reps leave and they can't get a replacement.....mega territories have been created to fill the slot, and the rep count has slid from close to 40 ten years ago to 15 today. The company has been forced to allow their reps to carry other lines, in addition to covering 3 or 4 states for Henredon. Selling Henredon takes talent...you have to be great to convince a retailer to continually invest in overpriced product...flush it....and repeat process a couple of times a year. You have to invest time in the designers and the sales staff to show them how to skillfully sell the overpriced upholstery. These reps should be revered, and should be making 6%-7%...with smaller territories...so they can spend the time working their magic with these retailers and managing the business that St Louis has so effortlessly managed to destroy. It takes alot of time to pull the fabrics...apply the constant barrage of stickers to the endless flow of catalog errors...get to the warehouse to inspect the product that nobody bothered to inspect the first time...and artfully convince the sales staff that the product is a value...even though the up and coming, real value "no name" lines occupy the square footage adjacent to them. While the reps fill out these assinine reports, which will be reduced to weekly exercises in creative writing, the management is creating new financial engineering strategies that will , once again, handsomely reward them for a job poorly done. This management team is a joke...the companies have become laughing stocks, and the hard working people that built these companies are nowhere to be found. Candy Man will admit, at some point, that he had under-estimated what it would take to manage FBN...but not until his bank account, and all of the good ole boys that are his men...have done the same. A future Harvard Business School case study on how to totally screw up a company.
ReplyDeleteCorrection to above post..."Candy Man will admit, at some point, that he under-estimated what it would take to manage FBN...but not until his bank account, and the bank accounts of all of the good ole boys that are his men....have become stuffed with cash that should have been returned to the shareholders, the employees, or invested with the retailers that have supported these brands for all too long."
ReplyDeleteYour cover article left out a couple of columns that should be included in the Furniture Brands sales reps weekly reports:
ReplyDelete1. A column for the sales rep to check if the dealer told them that they should be looking for another job, they are a good rep and that when they find another company to represent the dealer will then buy from them.
2. A column for the rep to check if they feel because they are unappreciated and that they can loose their job at any moment, they did not push this dealer as hard as they could have to buy. The reason for this being that they did not want the dealer to remember this when they soon have another line or because they want this dealer to speak well of them when contacted as a job reference.