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1. Sales Force Training at Arrow
Electronics
Presented By:-
Sandeep Gunjan
Priyanka Brar
Rohin Hooda
Nitin rathi

2. Table Index
1. Background
• About company
• Customers
• Market Offerings
• Competition
• Sales Force Structure
• Sales Force Compensation
• Sales Strategy
2. Sprout Hiring
3. Analysis

3. About Company
• Arrow electronic was a broad line distributor of semiconductor & electronics
parts (as supplier) to deal directly with OEM(Original Equip. Manufacturer)
• Initially in 1935 it was a Radio-equipment retailer
• In the 1950’s and 1960’s, Arrow began selling electronic components.
• In 1968 emerged as major distributor electronic components.
• 1977- fourth largest distributor in the United States. Grew from regional to
national company
• 1993- Arrow had the highest sales in North America with $2.5 billion
• Under Stephen Kaufman leadership in1992 Arrow became no.1 among
electronic distributors.
• Arrow has out numbered various competitors such as Pioneer-standard,
Wyle, Marshall Industries.
• Arrow sales continually growing.
Year 1998 1997 1996 1995 1994
Sales $8,344,659 $7,763,945 $ 6,534,577 $ 5,919,420 $ 4,649,234

4. Customers
• Arrow ordered electronic products from(Intel, Motorola, Texas
instrument) suppliers and Sell (IBM,HP) the components to
Original Equipment Manufacturers (OEMs). Who used them in
assembly of computer and other electronics.
• Smaller companies/Start-up companies:- For them it was
convenience access to thousand of components
Market offering
• Extensive relationships with customers (OEMs & Buyers)
• Handled the supplier’s goods. (this allowed suppliers to reduce their
own sales force expense and also they did not need a large inventory
for their product)
• Access to thousands of products from hundreds of suppliers

5. Sales force structure
• Sales divided into 4 distinct operating groups based on product
type:
1) Commercial Semiconductors
2) Military and aerospace semiconductors
3) Passive and connector products
4) Computer systems, peripherals, and software
• Sales Force divided into geographic divisions
-Each of which had a Branch Sales Office
• Around 350 competitors within this High-growth Industry
• Many sales people left Arrow to work with competitors
-Departing Arrow sales people took their clients with them
• Mainly competed with 20 large regional or national companies

6. Sales Force Job description
• General Manager (GM):-
• Field Sales Representatives (FSRs):-
• Sales and Marketing Representatives (SMRs):-
• Product Managers (PMs):-

7. Branch office structure

8. Branch office compensation
Branch Office Employee Compensation Average yearly income
General Managers 35% of salary is bonus based on $60,000-$120,000
(GM) branch performance (measured by
operating profit)
Field Sales Representatives $300/week draw against a $60,000-$80,000
(FSR) commission (8% of gross profit
dollars shipped to the FSR’s
customers)
Sales & Marketing Representatives Paid entirely on commission, $40,000-$50,000
(SMR) earned 4-5% of gross margin
dollars generated
Product Managers 25% of compensation based on $35,000-$75,000
(PM) sales & gross margin of product
lines

9. Sales Strategy
• Relationship based selling
- Sales strongly tied to individual FSR’s relationshaip with
suppliers
-Sales Force of 300 people with no formal sales training
-Sales Force used a lot of “T & E”
Typical sales force
• Gender: Men and Women
• Age: 30’s and 40’s
• Personality: high energy, highly aggressive, strong monetary
motivation
• Education: high school graduate
– Most did not have college degrees

10. Problem with strategy
• Sales Force challenging to retrain
• Sales Force “wine & dine” customers instead of solution
selling
-creates a lack of customer loyalty
• High Turnover Rate
-lack of company loyalty
• There was a need to change the work culture in the company
so kaufman launched “the first class hiring from college”

11. Sprout Background
• Arrow needed more salespeople, but wanted to change the
make-up of sales force
• Decided to hire kids fresh out of college
• The plan was to go on college campuses, interview kids,
choose the best ones, make offer, hire, train, and send to the
field
Objective Of Sprout training
• Upgrade professionalism of sales force by hiring kids
and molding them into modern salespeople
• Teach classic sales skills
• Teach how to manage territory, cold calss, overcoming
objections, and how to close sale

12. First step of sprout Hiring
• Train Arrow managers how to interview college students
• Taught managers to look for self starters, goal-orientated,
leadership skills, and people skills
• Conducted mock interviews with senior students .
2nd step - sprout Training
• Went to company headquarters for weeklong
orientation
• Sprout’s sent to warehouses for two weeks
• Six months of on the job training
• Returned to headquarters for a week of sales skills
training

13. Formal training Program
• Needed more formal training program
• Rented training facility of Xerox where sprouts would live for
13 weeks of classroom learning
• 13 weeks of on the job training
• 3 weeks of training before entering field permanently
• GMs noticed huge difference in sprouts
Sprouts Compensation
• New Recruits - $18,500
• First year “Sprouts” - $24,000
• Second year “Sprouts” - $27,000
• Competitors - 30 to 60 percent more
- First year “Sprouts” - $30,000
- Second year “Sprouts” - $40,000 to 45,000

14. Business Problems
• Turnover Rate
• Arrow/Industry?
• Initial Sprout Training
• Existing/New Sales force.
• Modified Sprout Training
• Competitors move in on Sprouts

15. Analysis
CEO: Steve Kaufman- respected and charismatic. His role is to
execute the company’s strategy. His responsibility is to guide the
strategy of the company, and to ensure that it is carried out
properly. His major concern is getting the right people in the right
slots and motivating them.
But in sprout program – he did not do budget reviews; capital
expenditure reviews, resource allocation, thinking of staffs and old
employee.
Not clearly informed : existing sales force was not clearly informed
about new recruited sales force. that have been working at Arrow
for 10 to 15 years; that originated a system of inequity that
brought in nothing but jealousy and unhealthy relationships among
the sales people.

16. Analysis
• Loyalty: came from pay (promises of money and
promotions), so this is CEO’s greatest mistake as he
prepared his salespeople so well that they became
incredibly marketable and easy to jump into different jobs in
different companies by being simply offered higher pays. So
the turnover at Arrow is extremely high- a sales rep works
for the company over a four year span, and then moves on.
• In summary, this case study is all about money-oriented, not
people-oriented as the sales force did not even care to grow in
and with the company, all they really wanted was money and
movement.

17. Analysis
• In summary, this case study is all about money-oriented,
not people-oriented as the sales force did not even care
to grow in and with the company, all they really wanted
was money and movement.

18. Learning
• work culture
• Proper planning
• Financial aspect matters a lot.
• Synchronization between all the levels of
management.
• Proper traning.