Vector Marketing
From Wikipedia, the free encyclopedia
| Vector Marketing | |
 |
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| Type of Company | Private |
|---|---|
| Founded | 1981 |
| Headquarters | Olean, New York |
| Industry | Marketing |
| Revenue | $180 million |
| Website | www.vectormarketing.com |
Vector Marketing is the sales arm of Alcas Corporation, the Olean, New York-based company that makes Cutco knives.
Salespeople, most of them college students and recent high school graduates, sell the knives in customers' homes. Vector recruits students through newspapers, Craigslist, direct marketing and posted advertisements. Their flyers advertising high-paying "student work" are a common sight on many college campuses in the United States and Canada.
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[edit] Recruitment
Vector's marketing and recruitment techniques have generated controversy in the past. Some have accused Vector of misrepresenting its base pay rate, typically about $10.00 - $20.00 per appointment, as an hourly wage. The base pay is a pay guarantee offered for every qualified appointment conducted by a sales representative. Representatives must document their appointments and submit documentation to the company each week in order to receive their base pay. As with most sales jobs, the base pay is a starting ground which guarantees income for reps who are either just learning or struggling with the sales process.
Vector counts its salespeople as independent contractors, much like Amway/Quixtar, Mary Kay and multi-level marketing organizations. Legal overtime and training pay requirements do not apply to independent contractors, nor does the company provide benefits or liability protection.
Vector's recruitment materials have not always been clear about the nature of the work. Potential salespeople often know little about the type of work they will be doing until training begins. Due to complaints about these and other consumer-protection concerns, the company has in recent years implemented a program of "Total Transparency", in an effort to be more upfront about the type of work its representatives do.
Vector is a member of the Direct Selling Association and the Better Business Bureau. For information on the differences between single and multi-level marketing, and further information on direct selling companies, see Direct Selling Association
[edit] Working for Vector
Vector's offices are usually situated near a city with several large schools, making access to offices, training and management support easy for some students. Managers often work with students to place them in the office closest to their area of residence while keeping in mind that the more reps an office has, the more the office can potentially sell. Reps are required to attend bi-weekly office meetings for support and further training. The meetings stress a fun, upbeat atmosphere and usually include public recognition for representatives who have attained a high sales level. A main concern in these meetings is to emphasize the competition between the branches in the local and national sector. Contests are also stressed, with various prizes such as gas cards, free cutlery, or chances to win vacations promoted to the sales team.
Management positions with Vector adhere more closely to the traditional office-job format, with managers and assistants working closely with local schools and reps from the office. Managers are paid based on the productivity and retention of their sales staff. Representatives work largely out of the office, generating a customer base through personal referrals and demonstrating CUTCO products to potential customers in the context of in-home demonstrations. In applicable offices, it is stressed that most managers themselves were students once, whose effort has afforded their own office.
[edit] Incentives
Proponents of Vector argue that the company gives students valuable real-world business experience and job opportunities that are otherwise scarce for college students. They also point out the rewards and scholarships (100 awarded annually; $250-$1,000 each) offered to high-performing salespeople as incentives. Vector has many contacts with various universities in the United States, including a Campus Relations Advisory Board consisting of professors from Louisiana State University, Boston College, University of Texas, Purdue University, University of Calgary, and Illinois State University. Illinois State University, for example, has a class available in which students intern at Vector and receive a grade partially based on their experiences. Purdue University has a similar class. Many universities are following suit and offering credit hours for documented work experience with Vector.
Sales reps are paid on a split system. Reps receive either a base salary per appointment or commission, depending on which is higher. Weekly commissions start at 10%, increasing in increments of 5%, up to a maximum of 30%. Monthly bonuses which can boost that figure to 50% are available for reps who consistently achieve at a high level. Commission levels are dependent upon career sales.
| Career Sales (CPO) | Commissions (%) | + | Bonus (%) | = | Total (%) |
|---|---|---|---|---|---|
| $0 - $999 | 10 | + | 0 | = | 10 |
| $1,000 - $2,999 | 15 | + | 0 | = | 15 |
| $3,000 - $5,999 | 20 | + | 0 | = | 20 |
| $6,000 - $9,999 | 25 | + | 0 | = | 25 |
| $10,000 - $14,999 | 30 | + | 0 | = | 30 |
| $15,000 - $19,999 | 30 | + | 10 | = | 40 |
| $20,000 - $24,999 | 30 | + | 15 | = | 45 |
| $25,000 and up | 30 | + | 20 | = | 50 |
During the summer months, when a larger number of college students are typically looking for work, a typical Vector office will run five or more group interviews per week and will launch as many as two dozen new representatives per week. Most reps who work for Vector are temporary, many work just during the summer months, and although some will continue on after graduation, most use the customer sales and business experience they gain to bolster their resumes.
[edit] Management
Vector is aggressive in promoting reps with good performance levels to management positions. A strict company-wide "promote-from-within" policy means that Vector Managers all began at the bottom as sales reps at one point. Most Vector offices are managed by recent college graduates, and assistant managers are generally college students. Several years ago, the company had what was called the "branch" program, which gave college students the opportunity to manage their own office for four months during a summer campaign. The amount of energy, dedication, and effort required to run a successful office (Vector managers can easily work upwards of 70 hours per week during the summer), makes "branching" a strenuous job. However, due to hit-and-miss sales, the Branch program was suspended in 2004. As of June 2006, the Branch program has returned, overhauled and redesigned to make it more successful. Over the summer of 2006, Vector also expanded to Puerto Rico with a branch office, to surmise whether or not it was a viable location for a full-time office. Currently, a program for "Vector International" is still in development.
[edit] Criticisms
A group called Students Against Vector Exploitation (SAVE) has been created to oppose what they see as exploitation from Vector Marketing. [1]
Many prospective employees have been disuaded from working for Vector Marketing due to several news articles and complaint websites that have been set up to discuss employee experiences with the Vector Marketing company:
- The Cutco Complaints blog at Blogspot [2]
- A 2005 campaign to ban Vector from illegal recruitment at the University of British Columbia [3]
- Beth Bonady's investigation report published in the Pioneer Log of Lewis and Clark College [4]
- Alisha Gore's investigation report published in The Seahawk of UNC Wilmington [5]
- What one man expected to be paid compared with pay actually received. [6]
In 2004, the Salem, Oregon Statesman Journal reported [7] that Vector had settled wage claims in Oregon, and it also reported that the attorney general's office was reviewing complaints.
A short documentary, "Santa Claus vs. Vector Marketing", details a number of Vector's exploits and a student's experience. It was released in 2003. [8]
[edit] References
Several case studies have been conducted on various aspects of Vector Marketing Corporation's operations. Academic articles have also been compiled on the company's student work programs. Here is a brief list of citations:
- Cravens (1999). Strategic Marketing Management Cases, 6th Edition, Burr Ridge, IL: Irvin/ McGraw Hill. ISBN 0-13-027661-8. 1-800-282-0693
- Rosenbloom (1999). Marketing Channels - A Management View, 6th Edition, Dryden Press. ISBN 0-03-024482-X.
- Bartlett (1994). The Direct Option. Texas A&M University Press. ISBN 080965838.
- O'Connor (1990). Personal Selling. MacMillian. ISBN 0-02-388870-9.
- Kerin, Peterson (2001). Strategic Marketing Problems, Cases and Comments, 9th edition, Prentice Hall.
- Pride, Ferrell. Marketing, 2000e; Marketing Concepts and Strategies. Houghton Mifflin.
- Peterson, Wright (1976). Selling Principles & Methods, 6th edition, Richard D. Irwin Inc.. ISBN 0-256-01646-1.
- Anderson, R., J. Hair; A. Bush (1999). “Vector Marketing Corporation”, Professional Sales Management. Dame Publications, 6-29 to 6-31.
- Hair, J., F. Notturno; F. Russ (1991). “Alcas Cutlery Corporation”, Effective Selling. Southwest Publishing Company, 338-39.
