Steering the Sales Force for New Product Selling: Why Is it Different, and How Can Firms Motivate Different Sales Reps?

Abstract

This study investigates how to direct and assemble the sales force for new product selling. In a first step, the authors draw on self‐determination theory to explore and empirically test a threefold conceptualization of motivation. Results provide insights into why sales force steering works differently in the new product selling context. Specifically, results show that for new products’ financial performance, internalized new product selling motivation is more important than intrinsic and controlled motivation. In a second step, the authors show how firms can motivate different sales reps to achieve higher financial performance of new products. In doing so, they examine the interaction effects of sales reps’ predispositions and widespread firm‐steering instruments on new products’ financial performance. Results reveal that the new product sales orientation of the bonus strengthens the positive relationship between sales reps’ performance predisposition and new product financial performance but weakens the relationship between sales reps’ learning predisposition and financial new product performance. Moreover, results reveal that the new product sales orientation of the periodic review strengthens the positive relationship between sales reps’ learning predisposition and financial new product performance. A post hoc analysis shows that a differentiated steering approach that matches appropriate steering instruments with sales reps’ varying predispositions substantially enhances reps’ financial new product performance.

The ambivalent role of monetary sales incentives in service innovation selling

“…As boundary spanners, salespeople assume an important role at the organizational frontline and are often the primary customer contact point with the organization (Rapp & Baker, 2017), making them pivotal for successfully bringing innovative goods and services to the market. In particular, salespeople were found to have an effect on customer's perception of new products (Ahearne et al, 2010), salespeople's performance in selling new products (Atuahene-Gima, 1998;Homburg et al, 2019), new product sales (Ahearne et al, 2010), and growth rate of new product sales (Fu et al, 2010). Different salespeople's behaviors have been identified as critical for the performance of new products or services.…”

“…These factors pertain to (1) salesperson characteristics, (2) task characteristics, and (3) sales management characteristics. Several salesperson characteristics were found to facilitate innovation selling, among them self-efficacy (Fu et al, 2009(Fu et al, , 2010, long-term orientation (Beuk et al, 2014), learning orientation (Homburg et al, 2019), and experience (Ahearne et al, 2010). Innovation selling further depends on the specific selling task, characterized by product innovativeness (Fu et al, 2008), customer newness (Fu et al, 2008), and expected customer demand (Wieseke et al, 2008).…”

“…We included a broad set of theoretically grounded control variables in the model estimation to reduce the likelihood of endogeneity issue due to omitted variable bias (Sande & Ghosh, 2018) and assess the stability of the hypothesized effects. To be more precise, we included control variables related to (1) additional incentive controls, (2) context controls, and (3) controls related to salespeople's autonomous motivation (Homburg et al, 2019). First, we include the extent of product incentives and non-monetary incentives for salespeople as additional factors accounting for the configuration of the compensation system.…”

“…Initially, increases in variable compensation help to enhance problem‐solving behavior, but—above a certain level—start to erode problem‐solving behavior and service innovation success; an effect that is particularly pronounced when a salesperson's variable compensation depends more on their service selling performance. While past research on innovation selling examined effects of monetary incentives on innovation selling success, indicating positive relationships (Beuk et al, 2014; Hohenberg & Homburg, 2016; Homburg et al, 2019), these works did not explore potential nonlinear effects of different incentive components and had not focused on complex service innovations. We complement this research by showing that for complex service innovations incentive intensity can exhibit an inverse u‐shaped effect on salespeople’s problem‐solving as one important driver of innovation selling success.…”

The human side of innovation management: Bridging the divide between the fields of innovation management and organizational behavior

“…It is people who plan and carry out innovation projects to implement these ideas (Baer, 2012;Schepers et al, 2019;Sivasubramaniam et al, 2012). It is people who bring new products and services to market and sell them (Feurer et al, 2019;Homburg et al, 2019). And it is people who envision and advocate strategies for future directions of innovative efforts to investors, customers, and fellow organizational members (Kaufmann et al, 2021;Tellis, 2006) Despite the burgeoning research on the human side of innovation, some important questions remain unanswered.…”