Measuring and Managing a Salesperson's Future Value to the Firm

Abstract

Research on sales force evaluation has mostly relied on reflective metrics such as sales volume, revenue, and manager evaluations to assess and manage a sales force. However, businesses are moving from a product-centric to a customer-centric view and from a backward-looking to a forward-looking strategic perspective, so sales organizations must adapt to the ever-changing marketplace to maximize performance. The authors propose a forward-looking and profit-oriented metric to evaluate and demonstrate the effects of training type and incentive type on a salesperson's future value. Using a latent class modeling approach, they identify two distinct segments in the sales force that exhibit different responses to varying levels of training and incentives. This suggests that a one-size-fits-all approach to sales force management may be suboptimal. Finally, the authors also evaluate the magnitude of the proposed effects in the short run as well as the long run and show that the magnitudes of the effects could vary depending on the time horizon being considered. The authors close with a discussion of the implications for research and practice, including sales force evaluation through customer relationship management–based heuristics and optimal training and incentive management.

The Factors Which Influence the Relationship Between a Network’s Synergizing Capability and the Increase in a Salesperson’s Performance

“…The successful sales of the product can be seen from the total number of units sold, the income, market, and the ability to make a profit (Carter et al, 2014;(Cartera, Hendersonb, Arronizc , & Palmatierd, 2014;David A, Mulki, & Weinberg, 2014;Drollinger & Comer, 2013). The behavior of the salesperson can be identified from the skills he/she possesses, including being an adaptive seller, good -teamworking skills, effective communication and being consumeroriented in his/her selling activity, sales calls, time management, and comprehension of the sales area (Gablera, Rapp, & Richeyb, 2014;Kumar, Sunder & Leone, 2014).…”

The effect of managerial cost prioritization on sales force turnover

“…Managers are under increasing pressure to grow sales while controlling and justifying sales related expenses (Kumar et al, 2014;Skiera & Albers, 2008). While research has begun to investigate specific elements of the increasing cost orientation of sales managers (e.g., Homburg, Jensen, & Hahn, 2012), the ramifications of an inordinate amount of cost focus have remained largely unexamined.…”

“…Business-to-business (B2B) sales managers face pressure to justify sales force management expenses in pursuit of revenue growth (Kumar, Sunder, & Leone, 2014). The burden is twofold -on one end is pressure to organically grow topline revenue; on the other is pressure to deliver bottom-line profitability and financial accountability (Kumar et al, 2014;Skiera & Albers, 2008).…”

“…The burden is twofold -on one end is pressure to organically grow topline revenue; on the other is pressure to deliver bottom-line profitability and financial accountability (Kumar et al, 2014;Skiera & Albers, 2008). While an abundance of sales management literature on improving sales performance exists (e.g.…”

Determinants of turnover intentions among marketing and sales representatives in the UAE

“…Financial performance of B2B organizations are dependent on effective sales reps (Ahearne et al 2010;Kumar et al 2014). When a key rep leaves an organization, customers often tend to move to competitors, who provide better service.…”