Tech Data chops number of sales teams in half

Tech Data Canada says resellers can expect a more streamlined sales force following its decision to reduce the number of sales teams and overall headcount in the department.

Though there will be fewer sales teams – 16 as opposed to the 30 teams it had before – they will be bigger, according to Rick Reid, president of the distributor’s Mississauga, Ont.-based subsidiary.

The company’s overall sales force, which numbers at about 500, has been reduced by less than four per cent — which comes out to fewer than 20 layoffs. Although he couldn’t give exact numbers, Reid said 13 people were let go from the Mississauga operations, with approximately three layoffs in each of the Montreal and Vancouver offices.

Reid told CDN his company is trying hard to make sure the impact of these reductions on resellers is zero, or at least minimized.

In most cases, he said, one or more of the previous team members will still be involved with a particular account. In some instances resellers will notice a change of their outside sales representative and will be receiving what Reid termed “four-legged team calls,” where a previous outside account rep will “pass the baton” by making the call together with the new outside account rep.

Reid said the whole streamlining process has been well-orchestrated to inform resellers of any changes. “We’ve had call-out campaigns with our customers and generally they all seem very excited about the change,” he said, adding that the changes also mean quicker answers to resellers’ phone calls.

According to Reid, about three months ago Tech Data’s Canadian office decided to take a close look at how it was interfacing with its customer community. One of the things it noticed was that there was some overlap between the sales teams.

For example, there were two teams focused on Ottawa, one on mid-sized clients and the other on smaller resellers. “If they had four people on one team looking after Ottawa on a certain sized group of accounts and four people on another team looking after smaller sized accounts, but a big group in Ottawa, you can probably do the same job with six,” he explained.

Account locations also posed a problem for sales reps who, for instance, had to travel all around the greater Toronto area to call on their customers, Reid added. “One of the advantages of what we’ve done is we’ve gone to a more geographic approach and assigned accounts by postal code . . . That way we’re not having 10 people zig-zagging across the city. They go to their territory and stay there – far more economical.”

The revamping of the sales team is part of Tech Data’s overall streamlining approach toward customer service, which has been going on for the last year. In July, the distributor laid off 28 sales reps who mostly took care of smaller accounts. This partially happened because of the increasing popularity of online product ordering, according to Reid.

“The number of the volume of business done with Tech Data electronically, which has always been a disappointment, has grown from less than four per cent to over 12 per cent,” he said. “We’ve been able to, because of that phenomenon, streamline our teams more appropriately so they are a little bigger, a little more focused on the customer. We call out a lot more than we did in the past to them proactively, as opposed to waiting for them to call us. And we think we can do better territory coverage with that same model.”

However, Reid said the most recent job cuts didn’t have anything to do with the general downturn in the technology sector, as did the July layoffs. “Part of what we wanted to do, obviously, is to keep costs in line with revenue streams, which are down from a year ago,” he said. “It’s just something that we always have to do. In our business, our margins in distribution are very low.”

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Jim Love, Chief Content Officer, IT World Canada

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