CIMAPRA19-P03-1 Exam - Topic 4 Question 68 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 68
Topic #: 4

H Ltdis a company providing postal and courier services to small businesses. Customers pay a monthly or annual subscription fee to use the service, plusaverysmall fee for each item delivered.

A year ago, H employed a newsalesteam. Their remuneration is dependent on the number of new customers they sign up. Sales increased dramatically in the first six months, but nowdifficulties are emerging such as new customers dropping their subscription once the initial period has expired; subscriber direct debits being returned unpaid; subscribers going out of business and other similar issues.

Which of the following would be appropriate to help resolve these problems?

AAlter the pricing structure in order to increase the price for sending each item but decrease the subscription element of the fee.

BEnsure that a credit check is carried outbefore a subscriber is accepted.

CReduce the rate of commission payable to any sales person who fails to sign up at least an agreedminimum number of customers each month.

DAlter the commission arrangements so that commission is payable only when the subscriber signs up for a second year.

EPreparing a monthly report for sales persons detailing the performance of each new customer they have signed up over the previous year.

Show Suggested Answer

Suggested Answer: B, D, E

by Janae at Apr 04, 2025, 09:45 PM

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Yasuko

2 months ago

Reducing commission for low performers could hurt motivation.

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Tyisha

2 months ago

Not sure if increasing item fees is the right move.

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Lynelle

2 months ago

I think a credit check is a must before accepting new subscribers.

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Han

3 months ago

Altering the commission to reward long-term sign-ups sounds smart!

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Tennie

3 months ago

Wow, I didn't expect so many customers to drop off after the first year!

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Brinda

3 months ago

Preparing monthly reports for salespersons sounds useful, but I’m not sure if option E would directly address the immediate problems we’re facing with customer drop-off.

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Reena

3 months ago

I practiced a similar question where commission was tied to customer retention, so option D seems like a good idea to encourage long-term subscriptions, but I'm not entirely confident.

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Janine

4 months ago

I think option B makes sense since credit checks could help avoid customers who might default on payments, but I wonder if it might limit our customer base too much.

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Paz

4 months ago

I remember discussing how altering the pricing structure could potentially attract more customers, but I'm not sure if it would solve the retention issue.

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Kassandra

4 months ago

I'm a bit torn between a few of the options here. I'll need to carefully consider the potential impacts of each before making a decision. Definitely going to spend some extra time on this one.

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Gaynell

4 months ago

I'm feeling pretty confident about this one. Option D, altering the commission structure to only pay out after the second year, seems like a smart way to incentivize the sales team to focus on retaining customers long-term.

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Salome

4 months ago

Okay, I think I've got a good handle on this. I'd probably go with option B - ensuring a credit check is done before accepting new subscribers. That seems like a sensible way to mitigate the risk of non-payment.

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Chauncey

5 months ago

Hmm, I'm a bit confused by the question. I'll need to re-read it a few times to make sure I understand the key issues before deciding on an answer.

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Gladis

5 months ago

This seems like a tricky one. I'll need to carefully weigh the pros and cons of each option to determine the best approach.

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Micah

10 months ago

The 'subscribers going out of business' part cracks me up. Guess H Ltd needs to be better at picking their customers. I'd go with option B - a credit check is a must.

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Shakira

9 months ago

It's important to ensure the subscribers are financially stable before accepting them.

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Felicitas

9 months ago

I agree, option B seems like the most practical solution to avoid these issues.

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Pansy

9 months ago

Yeah, a credit check would definitely help with those unpaid direct debits.

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Rashida

10 months ago

This is a tough one, but I reckon option C might be the best bet. Gotta keep those salespeople hungry for new customers, you know?

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Chun

10 months ago

Haha, the 'new customer dropping their subscription' problem reminds me of my gym membership. Anyway, I think option E is the way to go - transparent performance reports will keep the sales team on their toes.

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Antonette

9 months ago

Yeah, it will motivate them to focus on retaining customers.

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Franchesca

9 months ago

I agree, it's important for the sales team to see how their customers are doing.

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Ona

9 months ago

Option E sounds like a good idea. Transparency is key.

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Jovita

10 months ago

Hmm, I don't know about that. Reducing the commission for sales folks could backfire and make them less motivated. Maybe option D, where the commission is tied to long-term customer retention, would be better.

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