The Valley Winery
By: Paul Welge
Dr. Bob McDonald
Valley Winery was founded in 1933 after the prohibition and has grown to be the largest domestic producer of wine in the United States. The brand has multiple product lines that include both low-price, consistent-quality wines and also low-grade wines and wine coolers. The company has had a hard time retaining its sales force and despite the short-term increase in sales, it is not a sustainable growth.
The company has struggled to retain its sales force and has a nearly 100% turnover. There are 50 sales representatives in the San Francisco but approximately 50 new sales representatives are hired each year. The average time a sales representative is with the company is seven months. Valley Winery recruits 10 to 15 new sales reps from area universities, 10 hires from local newspaper advertisements and online job postings, and 15 to 20 representatives are hired through the use of six local employment agencies. The employees hired through the employment agencies cost the Winery approximately $3,000 per individual. It is also figured that recruiting and training each representative cost the company $30,000 per year. Pat Waller, the sales manager for the San Francisco region’s chain division, figures that these costs do not include the opportunity costs associated with retaining an employee. Such as the time it takes to build rapport with clients and the time it takes for the new hires to develop their strategies. An issue that could be causing this turnover could be the use of the company to gain experience and move on to a higher paying job or a job that pays based on commission. Large portions of the hires are college graduates who are getting their first jobs and have no experience or training. Another problem could be the lack of a commission for the chain...