Designs by Kate: The Power of Direct Sales

Case Solution

John Deighton, Sarah L. Abbott
HBS Brief Cases ()

Designs by Kate (DBK) sales representatives sell private label jewelry at hosted parties and through online social media channels. He is also responsible for recruiting, training, and managing new salespeople. CEO and Founder Kate Creevey designed the commission plan to encourage salespeople to team up and become leaders on their teams. The strategy was very successful in the first five years of the company. Now the CEO is concerned that revenue growth is slowing down, possibly due to the unwillingness of current salespeople to build and manage their own sales teams. A survey shows that many sellers believe that as they add members to their sales teams, their revenue from jewelry sales decreases as competition for parties in the same geographic area increases. The CEO should review the commission structure to see if it is still an effective incentive. The case contains a quantitative task that students must work on as part of the case analysis.

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