CIMA Exam CIMAPRA19-P03-1 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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Micah

16 days 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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Rashida

20 days 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

24 days 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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Ona

10 days ago

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

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Jovita

25 days 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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Ngoc

2 days ago

But what about option B? Conducting a credit check could help prevent issues with unpaid direct debits and customers going out of business.

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Alisha

21 days ago

I think option D could work well. It would incentivize the sales team to focus on long-term customer retention.

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Sage

1 months ago

I think option C could also be effective. It would motivate the sales team to sign up quality customers.

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Sueann

1 months ago

This seems like a tricky one. I'd go with option B - a credit check is a good way to weed out the unreliable customers upfront.

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Trinidad

16 days ago

B) Ensure that a credit check is carried out before a subscriber is accepted.

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Quinn

1 months ago

I agree with Alpha. Option B could help reduce the number of unpaid direct debits.

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Alpha

2 months ago

I think option B is a good idea. We need to make sure we are accepting reliable subscribers.

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