Dawn Rovers wrote this case under the supervision of Professor Michiel R. Leenders and Louise Mauffette-Leenders during the 2017 Case Writing Workshop held at the Lawrence Kinlin School of Business at Fanshawe College. It was prepared solely to provide teaching materials for class discussion. The writer does not intend to illustrate either effective or ineffective handling of a managerial situation. The writer may have disguised certain names and other identifying information to protect confidentiality.

Copyright  2017, Dawn Rovers and Lawrence Kinlin School of Business Fanshawe College Version: 17-05-23

In February 2014 Steven Hoffer, Director of North American Sales for StarTech.com faced a challenge.

StarTech.com, a London Ontario based technology firm, had grown substantially, with 2014 sales

projections at an all-time high. Steven received yet another request from one of his sales managers to

hire more sales reps. However, Steven wanted to know if hiring was the answer or if the existing sales

teams could improve productivity.

StarTech.com

StarTech.com was founded in 1985 by Paul Seed and Ken Kalopsis. Their vision was to supply hard to

find connectors to IT professionals. The founders believed strongly in a customer centric approach to

managing their business and going into Q2 of 2014, annual sales were estimated to reach $150 million.

Over the preceding 12 month period, sales had grown 35% with an average month over month growth

of 5%. At that time, StarTech sold over 3000 SKUs that supported 200+ technologies providing

connectivity parts for technology solutions. They were a very successful global manufacturer with

operations in three continents and distribution in 13 countries. StarTech’s head office was located in

London Ontario. Exhibit 1 provides an overview of the organizational structure.

North American Sales Department

As the Director of North American Sales reporting to the Chief Marketing Officer & Vice President of

Sales, Steven was responsible for North American sales, which were split along two major customer

groups; Direct Market Resellers (DMR) and Value Added Resellers/Distributors (VAR). However, Steven

had a total of five areas under his control (See Exhibit 2). The North American Sales Support group

provided support to both DMR and VAR/Distributor efforts, as well as managed End User Sales

(ecommerce), which contributed a very small amount to annual revenue. Similarly, the Channel

Business Manager and Bid Sales Analyst provided support to the two main sales areas.

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Aside from a few sales representatives who worked remotely, Steven’s team served all North American

clients from the London, Ontario office. Executing on the Customer Centric vision of its founders, Steven

lead a relatively lean team of highly motivated and skilled sales representatives. Overall, Steven was

happy with the performance of all his teams. However he felt he was constantly responding to his job in

a reactive fashion. In light of recent events, he wasn’t sure if he was focusing on the right things to fuel

the next year of continued sales growth. He was aware of three developments over the past year:

1. Rumblings from the field: He regularly received requests from his managers to hire more sales

representatives. That wasn’t new. The general process was that if sales growth warranted, reps

were hired and trained by the Sales Manager. What was bothering Steven was he also starting

to hear with increasing regularity that the sales representatives were overworked and morale

levels were being negatively affected by this. This was a common complaint from the Sales

Manager for VAR/Distributors.

2. Customer Relationship Management (CRM) Adoption: While Steven believed all of his sales

representatives were highly skilled and capable, the “old-school” sales reps weren’t adopting

CRM tools at nearly the same rate as the younger reps. This was particularly evident in the VAR

sales team.

3. Success Story in DMR Sales Department: Steven recently met with Linda Wiley, DMR Sales

Manager. Linda’s department boasted of great morale and great productivity. Perhaps most

importantly, Linda hadn’t asked for any new hires in the past 6 months, despite the fact that her

sales were growing at the same rate as the VAR/Distributor group. In fact, Linda did such a

wonderful job with her team that Steven asked her to provide details on how she and her team

used the company’s CRM tools. She came back with the following information:

Linda felt lucky that her team was always looking for ways to increase their own productivity

and most saw value in using the company’s CRM system to track and manage their individual

client relationships. Her team of sales reps were generally younger and more responsive to

using technology to assist with their sales duties. They took to the CRM system with no

resistance and generally learned on their own.

Linda had met with the CRM Administrator for StarTech.com, Shannon Grundy, to see if any

further opportunities could be found. As Linda was a strong supporter of data driven

management, she wondered if Shannon had any reports to help her with her biggest challenge –

she had a small sales team to service a large and fast growing client base. Along with her

technical skills, Shannon had a strong marketing background and quickly assessed Linda’s needs.

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Within 24 hours of their meeting, Shannon provided Lynn an employee workflow analysis and

Sale Rep activity to customer analysis, among other things. From this data, Linda was able to

work with her team to further streamline their activities with customers and thereby maximize

sales and productivity while driving more customer data.

Linda also noted that her activity was well aligned with an initiative the Director of Global

Marketing, Bob Bryde was working on with Shannon, the CRM Administrator. Another big

supporter of CRM, Bob was able to create a more robust customer segmentation model based

on behavioural data from the CRM system (see Exhibit 3 for persona breakdown). The goal was

to create channel marketing offers more specifically aligned to each segment. (See Exhibit 4 for

Marketing Organizational Chart)

Although Linda stated that she believed the adoption of CRM technology contributed to her

team’s success, she did not have the data to support this. Moreover no CRM business case or

ROI analysis had been conducted.

StarTech’s CRM System CRM was originally installed at StarTech.com in January 2010, replacing Goldmine, a basic contact

management system. At the time, there was no clear management mandate for CRM adoption and

senior management viewed it as a database and a customer service ticketing system. The CRM system

purchased from Sage CRM was still in use at the start of 2014 but a major upgrade was planned for May

2014. The main purpose of the upgrade was to move the local platform hosted at StarTech.com into the

Cloud where Sage CRM would be the host.

The planned CRM upgrade included the following features:

– Better performance (speed, responsiveness)

– Faster remote access

– Easy to use Apps introduced (take call, dial, quick-send email)

– Some new reports

– No improvements to the User Interface

In February 2014 Steven Hoffer had a lot of information to review. He needed to decide on a way

forward for his whole team. He was under pressure from executives to maximize sales and most

importantly, he was mandated by the original vision of the founders: to foster great customer

relationships. Both Linda’s success story and the pending upgrades to the company’s CRM system were

causing him to rethink his approach to managing growth in his department.

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EXHIBIT 1

StarTech.com Organizational Chart – Overview Revised January 14, 2014

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EXHIBIT 2

StarTech.com Organizational Chart – North American Sales Revised January 14, 2014

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EXHIBIT 3

Startech.com Customer Segmentation Model – Created 2012

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EXHIBIT 4 StarTech.com Organizational Chart – Marketing Revised January 14, 2014