Johnson Drug Company Sales Strategy Transformation Case Study

The Johnson Drug Company changed from an outdated "product loading" business philosophy to a client-centric "service" approach in 1985. Prior to this change, small pharmacy owners would place individual orders for specific products. By changing their sales strategy to systems selling, the company also transformed the role the salesperson plays in the sales process. Currently, the company's market includes physicians and pharmacists in hospitals, clinics, and medical departments. The Johnson Drug Company's main goal should be to become one of the top selling pharmaceutical companies in the country, and should center its new sales system on meeting that goal.

Instead of simply taking orders, the salesperson must evolve into a sales consultant. Rather than taking orders about a product they know little about, despite working for the company, the salesperson should learn about the products, understand their clients and their specific needs, and focus on the buying process itself instead of simply memorizing a standard selling system. By doing so, the salesperson focuses on the client rather than the scheme of selling the product. The salesperson would need to shift their focus to customer needs and differentiate the company based on meeting those needs.

"The salesperson would also be expected to know the clients' sales goals and assist them in reaching those goals by consulting their clients based on past purchasing trends" (Hawkins, 2009, NP). The salesperson would need to shift to relationship selling, in that "they would need to concentrate their efforts on developing trust with their clients, rather than focusing on the one-time sale" (Spiro, Rich, & Stanton, 2008, p. 12).

Existing salespersons in the Johnson Drug Company could, in essence, convert to the systems selling process and implement it successfully. Motivation and inspiration can come from many different places. In a small company like the Johnson Drug Company, something as simple as a new enthusiastic corporate mission statement by the owner could inspire current salespeople to share the vision for the future, thus inspiring the sales team to fully engage themselves in learning the new system.

New incentive programs should be explored as well, since the salespeople are now going to be more involved in the actual sales process. Companies adopt many types of compensation programs to increase salesperson productivity. By implementing a mixed compensation plan with benefits and clearly outlined weekly, monthly, and yearly goals, the sales team will be more motivated to sell products under the new system.

Instead of using a per-sale incentive, the Johnson Drug Company should add incentives for every sale the salesperson makes above the stipulated goal set by the company while also collecting a competitive base salary. "The benefit of using this system is it yields immediate results, which enable the sales managers to evaluate the impact of the incentive program. Sales managers should focus on demonstrating the link between performance and rewards, since theories involving human motivation support the use of incentives to motivate salespeople to perform better" (Kumar, Sunder, & Leone, 2014, p. 594).

Currently, salespeople are paying for their own expenses, such as gas and hotel stays. In order to give salespeople more incentive, each salesperson should be given an allowance each week. Any remaining allowance at the end of the week should be returned to the sales manager, with receipts documenting each purchase. This will help alleviate any financial burden that on-the-job traveling places on the salesperson.

Another potential issue is the manner in which the sales territories are divided. Instead of dividing territories by volume, territories should be assigned by total sales. This will ensure an even split for each salesperson.

A new training program is essential in this type of transition, especially since the salespeople will be shifting their focus to customer needs rather than the simple sale of a product or products. There are several problems that stand out in the current training program. First and foremost, there does not seem to be enough emphasis on the actual sales process. The new salesperson is spending too much time on aspects of the business that will not particularly prepare them for the sales position, and least of all the new sales system. Instead of working in the warehouse, new salespeople should complete a set amount of working hours in the sales procedure itself.

A training program that focuses on relationship marketing would be best suited for Johnson Drug Company as well. Because some clients are not yet using the new system to make purchases, it is now up to the sales manager to instill new training and sales guidelines to all new and existing salespeople. "In the new training program, open communication, employee empowerment, the setting of goals with the customer in mind, and teamwork are all equally important elements that should be addressed" (Spiro, Rich, & Stanton, 2008, pp. 46–47).

Sales managers could engage employees in role playing different types of sales scenarios. This will give each salesperson an example of what the new expectations are in the sales process. Since it is no longer simply taking an order, the salespeople will need to be trained on client satisfaction and interpersonal relationships. Moreover, CRM (customer relationship management) systems could aid in this transition to systems sales. Since client information, purchase history, sales trends, and other data will all be recorded into the CRM system, it could provide the salespeople with a more personal approach to each client by noticing their trends and buying patterns and adjusting their sales technique to each individual client.