Case | HBS Case Collection | April 2011

Designs by Kate: The Power of Direct Sales

by John A. Deighton and Sarah Abbott

Abstract

The sales representatives at Designs by Kate (DBK) sell private label jewelry at hosted parties and through online social media channels. They are also responsible for recruiting, training, and managing new sales reps. CEO and founder Kate Creevey designed the commission plan to encourage sales reps to build teams and become leadersfor their teams. The strategy has been very successful over the company's first five years. Now the CEO is concerned that growth in top-line revenue is slowing, possibly due to an unwillingness by current sales representatives to build and manage their own sales teams. A survey reveals that many sales reps believe their incomes from jewelry sales decline when they add members to their sales teams due to increased competition for hosting parties within the same geographic area. The CEO must revisit the commission structure to determine if it is still an effective incentive. The case includes a quantitative assignment that students should complete as part of case analysis.

Keywords: Direct sales; Consumer marketing; marketing management; marketing strategy; Personal selling; Sales compensation; Sales organization; Motivation and Incentives; Marketing Strategy; Salesforce Management; Performance; Compensation and Benefits; Apparel and Accessories Industry;

Citation:

Deighton, John A., and Sarah Abbott. "Designs by Kate: The Power of Direct Sales." Harvard Business School Brief Case 114-284, April 2011.