Vector Marketing is the sales arm of Alcas Corporation, the Olean, New York-based company that manufactures Cutco products.
| File:Vector Marketing logo.gif | |
| Company type | Private |
|---|---|
| Industry | Marketing |
| Founded | 1981 |
| Headquarters | Olean, New York |
| Revenue | $180 million |
| Website | www.vectormarketing.com |
Salespeople, most of them college students and recent high school graduates, market Cutco products to customers via in-home demonstrations. Vector recruits students through newspapers, Craigslist, direct marketing, myspace, facebook, word-of-mouth, and posted advertisements especially on university and college campuses in the United States and Canada. Their flyers advertising "student work" are a common sight on many college campuses in the United States and Canada.
Recruitment
Vector recruits its salespeople as independent contractors. The freedom that accompanies a position as an independent contractor also means that the contractor is directly responsible for creating income and opportunities, in the same way that a small business owner would be responsible for the failure or success of their business. Overtime and training pay requirements do not apply to independent contractors, nor does the company provide benefits or liability protection. Managers and senior sales reps cooperate to provide support in the form of training and encouragement, but ultimately have no control over any other representative's income or opportunities.
Vector gives students valuable real-world business experience and job opportunities that are otherwise scarce for college students. Students often times arrange to earn work-study credits while working with Vector, and the company provides 100 scholarships per year based on performance. Successful representatives can earn upwards of $50,000 a year while working less than 30 hours in a week, and enjoy the freedom and flexibility of making their own schedules. Vector has contacts with various universities in the United States and Canada, 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.
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.
Vector frequently holds regional, district, and national conferences for advanced sales training and recognition of various achievements and promotions.
Business Model
Sales reps are paid weekly on a split system. Reps receive either a base pay per appointment, or commission on products sold, 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 that achieve a monthly quota. Commission levels are dependent upon career sales. The company average order is $243, and the average conversion ratio or closing percentage is somewhere between 60% and 80% depending on the quality of the prospect, meaning that representatives typically make more on their commissions than from the base pay.
Vector is a member of the Direct Selling Association and the Better Business Bureau.
A promote-from-within policy means that Vector managers all began at the bottom as sales reps. Most Vector offices are managed by recent college graduates, and assistant managers are generally college students, although the company does have a branch program that allows current students to open and run an office while on Summer vacation. This allows students to be able to connect with their managers since they were once in their shoes.
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.
Criticism
Vector Marketing's contracting and sales tactics are similar to those commonly accepted by the real estate and insurance industries, as well as many other companies that use independent contractors as salespeople. However, given that they focus on recruiting primarily students and young adults with little or no work experience, and very often no outside sales experience, many interviewees and contractors have responded with criticism due to the stark differences between employment and a contracted position. Critics have accused the company of a variety of perceived unfair and deceptive practices, including:
- Advertising a per-appointment rate.
- Having contractors to provide a refundable deposit in exchange for a product sample kit before they can begin selling.
- Having sales reps provide their own transportation to appointments.
- Revealing pricing to the contractor near the end of training, and to the customer near the end of the appointment, after building value.
- Paying reps solely on performance in terms of number of appointments conducted or sales created, and not for training time or time spent on the phone.
- Encouraging reps to communicate with their manager frequently, often early in the morning.
- Constant encouragement from managers to make appointments and sell, even when sales reps are busy.
- Encouraging employees to attend weekly team meetings, and encouraging them to attend sales training conferences.
Vector Marketing's employment tactics have been targeted for criticism, specifically for deceptive recruitment practices. This was due to an ambiguous explanation of the work in the job advertisements.Vector was lawsuit by the Arizona Attorney General in 1990 , the Australian Competition and Consumer Commission in 1999 . Each time their legal trouble revolved around allegedly fraudulent recruiting tactics, and each time Vector settled and promised not to mislead their recruits anymore. In the early 2000s, Vector made what they called "transparency" changes to become more upfront about what they offered representatives. Many of the people who were in upper-level positions with Vector 10 to 15 years ago when most of the criticism occurred no longer work with the company.