Conference 7.286::digital

     For what's it worth here is the text from the AP article on Digital's 
     new bonus program for sales. Another hopeful sign of Sales' resurgence
     is that now the Phase Review process requires input from Sales.


     Associated Press Wed 18-JUN-1986 06:39               MA--Digital Bonus

     Key Sales People Get Bonuses To Keep Them From Jumping Ship

        MAYNARD, Mass. (AP) - In an effort to keep its key sales people
     from going after other jobs, Digital Equipment Corp. says it will
     give out bonuses of up to $18,000 to each of its best performers
     this summer.

        The giant computer maker, which had difficulty with sales people
     jumping ship in 1983 and 1984, announced Tuesday in a statement that
     it would introduce its first major incentive program.

        Only the top 20 percent of the sales force will get the
     incentives, which range from $6,000 to $18,000, Digital said. But
     the company will remain one of the few in the industry to limit
     sales staff to straignt salary.

        More common pay structure in the industry is a combination of
     commission and salary.

        ``We had a 10 percent turnover in our sales force,'' recalled
     John J. Shields, Digital's vice president and group manager for
     sales and service. He would not reveal the size of the sales force,
     for competitive reasons.

        Shields estimated the median salary of Digital sales people is
     about $60,000 a year and an $18,000 bonus would be a 30 percent
     increase. Some account managers earning up to $100,000 also will be
     eligible, he said.

    See HUMAN::MARKETING note 244 where this is being discussed at some
    depth.

    This file is an appropriate place for this discussion.  After you
    read what's in MARKETING, feel free to continue the discussion here.
    
  --Simon (moderator of both MARKETING and DIGITAL)
    

Ahh Gi'day...

    Only 10%  turnover,  what  a  luxury,  ours is probably closer to three
    times that.
    
				{dennis{{{ --

    What do you mean (141.5) who's going to pay for it? The customer
    is the one who pays us all.
    
    BTW, does that $60,000 median salary look suspicious to anyone
    else? I asked a manager, who replied that if that's true then
    none of our salespeople are 'on plan'. In other words, the salary
    range of most of our salespeople does not go as high as $60,000.
    
    		Alfred

    re:.-1
    
    I dunno, Alfred.  The S-series job list goes awfully high!  
    Account Executives, in particular, can get into the six figures
    within the normal salary range.  Not all of them, just the highest
    ranking, but still sales types and not VPs or manglers.

Gee,

	Do you think a DEC Sales Training Programmer/Analyst with medium-size
    ticket retail experience, as well as purley commisioned sales experience
    might make a good DEC salesman?  I wonder what sorts of extra perks these
    guys get along with the "below-industry-standard" wages; do they get a
    company car?

						-DAV0

RE: .9
    
    1. "Do you think a DEC Sales Training Programmer/Analyst with medium-size
    ticket retail experience, as well as purley commisioned sales experience
    might make a good DEC salesman?"
    
    As a career objective? Yes. That is, if you work on moving step
    by step into sales, almost any experience background won't hold
    you back. It takes a certain personality, a personal drive and a
    willingness to develop the sales skills. Programmer Analysts in
    an applications environment with no direct experience in the sale
    of big ticket items might want to move into a pre-sales software
    support position, working in the field day to day with sales people
    to determine for themselves whether they really want to meet the
    demands of the job, or if they would prefer a different role.
    
    As an immediate move? Depends on the nature of the selling experience
    and other factors.
    
    Sales is a well paying profession. It is not, however, a piece of
    cake --long term-- no matter how easy it looks from the outside.
    
    Perks? They get a car (or an 'alternate care plan' check every month).
    They get some travel once in a while (if you think of that as a perk.)
    They get to coordinate a lot of resources. They get, as they move
    along, to plan their own work. Sometimes, they appear to work less than
    a 40 hour week, but that usually is part of the BS they spread around.
    A lot of the job is the image they project, and, for both males and
    females in the job, the confidence it takes to succeed gets translated
    into "macho" on the job -- about how little they have to work (since
    they're so good). Granted, there ARE some goofoffs. In all
    organizations and professions. Those who make it long term work very
    hard, suffer from a LOT of stress and struggle for every nickle that
    winds up in my paycheck and yours.
    
    They also, at the end of the quarter/year, can point very specifically
    to a directly measurable contribution they make to the company.
    
    If sales were so easy, everyone would want to do it and, with the
    law of supply and demand, wages, perks and commissions would shrink.
    They aren't shrinking. The job continues to get tougher in our industry...
     
    
    
      I wonder what sorts of extra perks these
    guys get along with the "below-industry-standard" wages; do they get a
    company car?

						-DAV0
    r

re. -1,

	Thanks for the advice, I think the pre-sales would probably allow
    me to feel-out a sales career first.  My experience has been to program
    IVIS courses for the sales force.  However, my perceptions of who these
    people are and what makes them tick has been limited to a few personal
    aquaintances who have since joined the sales force, along with what few
    needs-analysis surveys we have managed to send out to the field (there
    is currently a ban on any more surveys).

	You made an interesting point about a "macho" image projected by
    successful salespeople, maybe this explains why they are generally
    too busy "playing golf" with our customers to bother with any of the
    IVIS courses that we have slaved away on for the past couple of years.
    According to our QA reports, we have had a very small response (from
    anybody, much less actual DEC salespeople) of QA reports returned in
    the history (the rise and fall) of the Sales Training IVIS group here
    at Stow.  I can almost count the total amount of QA reports using my
    fingers and toes, with most of the respondants coming from (idle?)
    manufacturing employees such as might be found in Phoenix, etc.  My
    hat goes off to these few curious types who gave IVIS a chance.

	Maybe the next round of QA reports will be more fruitfull, who
    knows?  And frankly, who cares?  IVIS is a four letter word these days,
    so I'll stop now before I really get going on that one.  Otherwise,
    I'll probably say something real witty and have to delete it later.

	As far as Sales, well...I personally think we could sell alot
    of equipment by setting-up a DECUS-styled Vaxnotes network (see the
    related discussion An Independant Notes Network in this conference),
    in which we could allow potential customers to interact with all of
    us noters, as well as each other.  We could cut right through some of
    the overpaid and stylishly-underworked middlemen and get some REAL
    $ALES going!!!

						-DAV0

    I always find it interesting to see the great difference in perceptions
    throughout the company.
    
    I've been in the field for nine years after being a customer for
    seven years.  My view of Sales is FAR different from DAV0's.  Much
    as I hate to admit it, Sales is a tough job that LOOKS very easy
    from the outside.
    
    A great part of the problem is that technical people have a real
    attachment for the ABSOLUTE truth which tends to go against the
    view by salespeople.  The old joke about being able to tell when
    a salesperson is lying is when his/her/its mouth is moving is NOT
    true but is close enough in SOME cases.  (The University of Florida
    was promised delivery of Ethernet in 1983!!)
    
    By the way, the stereotyping goes BOTH ways.  Moving from a
    technical position into Sales is very often difficult because Sales
    views techies as nerds who cannot understand any reality beyond
    what's in a crash dump.
    
    Don

    And then theres....
    
    What's the difference between a car salesman and a computer salesman?
    The Car salesman knows when he's lying....
    

    I'm glad you realized where that old joke belonged.

        re .12 and "The University of Florida was promised delivery
        of Ethernet in 1983!" - when did they finally get it (if
        they have it at all)?

    Good old Gainesville is now pursuing rolling their own broadband
    backbone with a few pockets of Ethernet here and there.  They're
    now giving us grief about the lack of security on Ethernet.
    
    As it turns out, the Ethernet 'promise' didn't hurt Digital too
    badly but was certainly VERY embarrassing at the time.
    
    Don

    
    I read in the Digital VTX news that Digital is reportedly going to
    begin paying some sales people commissions on sales.
    
    What are the pros and cons?  Do you think this will build a more
    successful Digital?
    
    My opinion:
    
    PROS:
    
    Paying commissions to some sales people will motivate their behavior to
    sell more aggessively more Digital products with the result that
    Digital generates more revenue.
    
    CONS:
    
    Paying commissions only to some will alienate those sales people who
    are not paid any commissions.
    
    Winning and keeping high-tech complex systems, solutions and integrated
    enterprise business is a TEAM effort, requiring many team members, both
    in the field (software support and customer services to name but two)
    PLUS a wide variety of support both at field headquarters and corporate
    facilities.  Paying only one member, the sales rep, not only a higher
    salary (already perceived to be a truth by many), but ALSO paying
    commissions will alienate other team members even more.  Increased
    apathy and disenfranchisement in the success of Digital are potential
    results since the attitude may well be that it is the SALES person's
    responsibility to GET the business, not anyone elses.
    
    Commissions provide windfall income to some with little effort, further
    alienating other team members plus workers throughout Digital, ALL OF
    WHOM have an impact, somewhere, on the ability of ANY field team or
    person to win and keep a customer, generating revenue and profit.
    
    Commissions paid on revenue will produce more revenue but perhaps at
    the further erosion of margin, driving behavior to give allowances at
    any cost in order to get any amount of revenue, which in turn will
    provide commissions to the sales person.  If paid on revenue and not
    margin, profit losses are likely to escalate dramatically.
    
    Paying commissions is a short-term fix to make the books look good but
    at the expense of not addressing fundamental issues impeding change
    that could lead to significant growth in products/services, markets,
    customers, revenues, margins and net profit.
    
    Sales personnel already spend time making sure they "get credit" for
    certs; increased time will be spent fighting for getting credit when
    commissions are at stake.
    
    Paying commissions drives behavior to simply book more business rather
    than driving behavior to thoroughly KNOW customer contacts, their needs
    and wants, building long-term relationships based on customer
    satisfaction, which in turn lead to greater account penetration,
    revenue and most importantly, profitable business based on getting
    premium margins with the most amount of revenue.  A "sell more cars
    mentality" could become pervasive at the expense of long-term
    prosperity of Digital.
    
    MY BELIEF:
    
    I think paying commissions is a bad idea.  Equal profit sharing is the
    better approach for it builds harmony and cooperation, WITH ALL working
    together to achieve higher levels of accomplishment as a TOTAL Digital
    team; paying commissions only to some sales reps builds "meism
    materialism" with no ownership by all other workers in Digital to think
    creatively on what must be done AND CHANGED to increase efficiency and
    effectiveness both in cutting costs as well as in building more
    customers, revenue, margin and profit.
    

    re: .17
    
    I assume that you are referring to the VNS reprint of a rumor which
    surfaced in one of the trade rags (Digital Review?). I sure hope that
    you don't rely on these same sources for other information on Digital.
    Remeber that their main objective is to sell magazines, not to
    accurately inform Digital employees of internal goings-on.
    
    Before passing judgement on changes to the way that Sales Reps are
    compensated, it might be worthwhile to find out what is actually in the
    compensation plan. That's assuming, of course, that Sales thinks it's
    anybody else's business - I wouldn't expect my management to tell Sales
    Reps what *I'm* making. 
    
    As far as I know, there has not been a formal, authoritative
    announcement of changes in Sales' compensation plan. You may wish to
    hold your fire until there is one. If there is one ...
    
    FWIW,
    Larry.

    
    Re .17:
    
    Can you give a pointer to the article? (I was just browsing, couldn't
    find anything.)
    

    Check today's VOGON news -- it cites an article in the Middlesex News
    (Mass) rehashing last week's KO meeting with the analysts. The article
    states that commissions for sales is one of the changes being
    contemplated or in the works.
    

    re: .19
    
    I believe this is the article referred to by .17
    
                            The VOGON News Service
 Edition : 2080               Monday  4-Jun-1990            Circulation :  8239
 VNS COMPUTER NEWS:                            Tracy Talcott, VNS Computer Desk
                                               Nashua, NH, USA

 Digital - Changing the way it does business
	{Computerworld, 28-May-90, p. 1} {MISG}
   Digital is in the mist of substantial changes. The company will decentralize
 its sales force with commissions and more flexibility to cut deals with
 clients. Digital also plans to pay shareholders dividends next year for the
 first time. Tougher employee severance programs are in the works to reduce
 head count among Digital's 125,800 employees. The programs extend beyond the
 manufacturing groups into field operations and administrative staff. Kenneth
 Olsen reaffirmed however, that no companywide layoffs are planned.
    
     MISG = {Article summarized and distributed by Digital's Market
    	     Information Services Group (MISG)}

DREAMS OF DIVIDEND NEAR REALITY AT DEC

Stock rise, company changes please analysts

Middlesex News, Wednesday, May 30,1990
By Michael E. Knell
News Business Writer


MAYNARD - With the price of its stock already on the rise, officials of 
Digital Equipment Corp. are apparently close to declaring the company's first 
dividend.

In an unusual day-and-a-half meeting with 175 securities analysts and 
consultants last week plans for continued evolution of DEC were outlined by 
Chairman Kenneth H. Olsen, joined by a phalanx of other top officials from 
various DEC divisions.

"It's the first full-court press I've ever seen," said Terry Shannon, a 
DEC-watcher for International Data Corp. of Framingham.

After a year of shrinking profits, officials told analysts they are making a 
variety of changes aimed at making the $13 billion-a-year company more 
competitive, as well as more attractive in investors.

Among moves either under way or contemplated:  a switch to commissions for some 
sales staff, establishment of business center focused on certain areas, 
continued buy outs of employees aimed at cutting costs and yielding the 
32-year-old firm's first dividend.

Many large institutional investors, who are often seen as driving market 
increases, are prohibited from buying shares of stocks that do not produce 
regular income through payment of dividends.

That deprives Digital of potentially massive investment:  About $180 billion 
is managed by Wall Street's top 1,200 funds, according to a recent survey.

The prospect of dividends makes DEC stock more attractive, and that might boost 
the price of DEC stock, which has languished since the glorious summer of 
1987, when Digital hit an all-time high of $199.50.

Talk about dividends is also seen as a sign that more profitable times are 
ahead.  In recent quarters, DEC profits have sagged although never dipped into 
the red. 

Digital stock, which sunk as low as $69.50 a share during the winter, has 
often been seen as under-valued, sometimes so low that a purchase of the 
company might look like a bargain.

Despite a spate of rumors, DEC officials say they have no reason to suspect a 
takeover.  But officials have taken a number of anti-take-over steps including 
purchase of company stock.

That kind of buy-back is traditionally seen as one way to boost stock value.

And in fact, DEC has staged a comeback in recent months, rising to $94.75 a 
share at the close of Tuesday's trading.  But the climb is largely attributed 
to a general wave of high-tech buying that has boosted prices for many 
computer company stocks.

Some analysts, including the California Technology Stock Letter of San 
Francisco, predict a burst of this spring's bubble, but most analysts are much 
more optimistic.

For example, Jay Stevens of Dean Witter Reynolds, of New York City, expects 
the stock of most large computer makers to keep rising.  On Tuesday Stevens 
predicted DEC will reach $111 this year.

Stevens, one of the first analysts this year to put DEC on a "buy" list, cited 
the expected sales of the VAX 9000 mainframe, to soon-to-be announced VAX 4000 
minicomputers and the company's huge cash reserve.

That surplus, amassed while many firms were plunging deep into debt, also 
fuels the call for dividends. At the end of the most recent fiscal quarter, 
Digital had $2,162 billion in reserves, much of it invested in banks and 
Treasury bills, according to DEC spokesman Mark Steinkrauss.

Olsen did not promise a dividend, but told analysts he believes a dividend is 
two years overdue, although he has apparently been unable to convince the 
board. 

"I'm sure there are things that Mikhail Gorbachev wants that his Politburo 
doesn't," Shannon said.  "You've got to have a consensus opinion."

Digital's board of directors could vote to declare a dividend at any time, but 
analysts expect such a move sometime after the start of the fiscal year 
July 1.

Stevens said Tuesday he expects a "minimal" dividend, perhaps 50 cents a 
share.

    There's also a lengthy article in MIS Week, June 4, 1990.  The title of
    the article is "DEC rethinks sales force structure and compensation".
    The first paragraph of the article follows.
    
    "MAYNARD, MASS. - At a meeting with financial analysts two weeks ago,
    Digital equipment Corp. said that it is considering reorganizing its
    sales force by lines of business and basing sales compensation on
    commissions rather than on salary, according to analysts who attended
    the parley."
    

    re:  <<< Note 141.18 by SWAM2::MCCARTHY_LA "Value indifferences?" >>>
    
>   Before passing judgement on changes to the way that Sales Reps are
>   compensated, it might be worthwhile to find out what is actually in the
>   compensation plan. That's assuming, of course, that Sales thinks it's
>   anybody else's business - I wouldn't expect my management to tell Sales
>   Reps what *I'm* making. 
    
    I think that there are a couple of things you might have overlooked
    here.  First off, the Certs/Goalsheet metrics that currently exist
    in Sales is well known by the people in Sales Support, because they
    are also measured on many of the same things.  As of the new fiscal
    year, Sales Support is now *part* of Sales, so I have no doubt that
    Sales Management will know to the penny what the Support people make.
    
    That's where the real issue comes in:  This move is perceived as not
    being in the best interests of the Support people.  They are now in
    the Sales organization, subject to all of the same pressures and
    woes that Sales people deal with.  They will be measured more or less
    the same as Sales reps are measured.  BUT, they will not participate
    in the same incentive programs as Sales (Bonuses, commissions, etc).
    In other words, all the pain but no gain.
    
    When Sales Account Teams consist of senior and junior reps, all reps
    still have the potential to share in the gravy.  That will not be
    true for Sales Support personnel.  Of our competitors that possess
    joint Sales/Support teams, most pay commission to all the personnel
    on the team, whether they are Sales or Support.  At IBM, it was
    considered critical to the success of selling complex mainframe
    systems, because top-notch technical support is *required* to make
    the sale.  To attract and keep the best Systems Engineers, they had
    to make it worth their while to be in Sales Support.
    
    I have worked in Sales Support several times over the years, and have
    usually enjoyed it and gained some small recognition out of it.  But
    I can't imagine that I would go back to Sales Support under the new
    conditions.  It just doesn't seem worth the aggravation.
    
    Geoff

    .18>    anybody else's business - I wouldn't expect my management to tell Sales
    .18>    Reps what *I'm* making. 
    
    Although you won't see it posted on buletin boards,pay ranges are
    pretty easily obtained,therefore your friendly sales reps. probably
    already know approximately what you make.
    
    Ken

    RE:.-1
    
    Pay ranges are fairly easily obtainable.  However, since JEC, the ranges
    are very wide.  It is not easy to guess what someone makes even knowing
    their job code.

re .25:

    Salary ranges are quite wide.  The range for my position is from
    N to 1.8*N.