Research Review – edited by Jeremy Noad 9.2 2023
20th April 2023 | Dr Jeremy Noad
The research review aims to help readers keep up to date with recently published research on sales-related topics. The review highlights short abstracts of academically peer-reviewed research. This selection of published research is from a range of academic journals. In this edition, the abstracts include four themes that focus on sales performance, customer management, and behavioural studies.
Salesperson profitability is reduced by increasing non-core activities
Business-to-business companies often differentiate themselves from competitors by complementing goods with services. While extant literature on servitization points to substantial benefits for companies and underscores the importance of the sales force for successful servitization, it has rarely empirically investigated the negative effects of and barriers to effective selling of servitized offerings at the salesperson level. Drawing on transaction cost theory, we propose that with rising service shares, the specificity of offers and transaction costs grow, partially offsetting the financial benefits. We derive four salesperson factors that moderate the effect of salespeople’s industrial service share on salespeople’s profit. These factors pertain to the extent to which salespeople individualize offers and effectively manage offers’ specificity (adaptiveness, customer valuation skills, experience).
We test our conceptualization with data from 220 salespeople and company records. The results are robust to endogeneity and show that service share has a diminishing positive effect on salesperson profit. While salespersons’ offer individualization enforces this harmful effect, salesperson adaptiveness and customer valuation skills show beneficial moderating effects. This study provides valuable insights for researchers and managers into the role of the sales force in servitization and into salesperson factors conducive to realizing the full profit potential of servitized offerings.
Krämer, M, Desernot, C, Alavi, S, Schmitz, C, Brüggemann, F and Wieseke, J, “The role of salespeople in industrial servitization: How to manage diminishing profit returns from salespeople’s increasing industrial service shares”, International Journal of Research in Marketing, 2022.
The frameworks to measure salesperson performance have not advanced in parallel with the degree of transformation of professional selling.
Many sales KPIs are out of date for modern selling
The frameworks to measure salesperson performance have not advanced in parallel with the degree of transformation of professional selling. To address this issue, research in organizational performance advocates for the use of more comprehensive and integrated measurement frameworks, incorporating both objective and subjective measures. However, in sales research, this integrated approach is rare, with most studies using either objective or subjective measurement. Thus, in this article, we explore the combined use of objective and subjective measures of salesperson performance.
We conduct a systematic review of sales performance and then investigate empirically, through a survey of 207 salespeople and 39 interviews with sales leaders, the specific role played by subjective measures of individual sales performance. A key finding of the study is the widespread use of diverse measures of performance in practice and the limited measurement approaches used in sales research. We contribute by articulating the differences in the conceptualization and operationalization of salesperson performance between industry practice and scholarly research. We propose a set of principles for selecting measures of performance in sales and present a framework that extends current conceptualizations of effectiveness and efficiency by incorporating a third dimension, competency, that also needs to be measured.
Kerr, P D and Marcos-Cuevas, J, “The interplay between objective and subjective measures of salesperson performance: toward an integrated approach”, Journal of Personal Selling & Sales Management, pp.1-18, 2022.
Buyers prefer personal selling when they perceive the sales offer as highly risky for the buying organization, whereas they strongly prefer a direct marketing approach by the selling firm when they are purchasing low-risk purchases.
Hybrid selling leads to hybrid negotiations
We identify three key priorities for needed work on sales negotiations based on current marketplace conditions and gaps in the literature. We call these priorities “big spaces”: blank or unoccupied portions or areas. Big space #1 considers who the negotiators might be, whether they are consumers or firms. While much research has considered the characteristics and motivation of individual negotiators, much less investigates the negotiating dyad as a mix of firms and individuals or between two individuals. Big space #2 recognizes the need for more understanding of negotiations that occur in digital contexts. The pandemic has clearly accelerated movement to these spaces and illuminated many intriguing opportunities. Finally, Big space #3 considers relational phenomena that can arise between negotiators, even in brief, one-time encounters. We also suggest novel directions for negotiations that occur over time.
Boyer, S L and Jap, S D, “The big spaces in sales negotiation research”, Journal of Personal Selling & Sales Management, pp.1-12, 2022.
Integrating social-psychological factors into negotiations improves predicted outcomes
We propose a process model that examines the antecedents and consequences of bargaining concession rates with managerially relevant constructs grounded in social psychology to predict negotiation outcomes in a sales setting involving multiple issues. The situational factors of relative power, constituent’s monitoring, time pressure, and dispositional factors of the bargainer’s personality toughness and risk-taking propensity are integrated to test the associated set of hypotheses. Our novel approach employs a fractional factorial design experiment to test the predictions of our NIMBuS solution.
The results of our sophisticated bargaining experiment support our model and hypotheses and add to the literature for empirical generalizability. We find in our integrated test that concession rates tend to be lower when bargainers are in a higher relative power position, are under lower time pressure, have higher personality toughness, or have a higher risk-taking propensity. The underpinning of economic models asserting the importance of discount rates for concession-making does not hold. Our results indicate that the cost-prohibitive mechanism of organizational monitoring of salespeople may not be needed. Importantly, under asymmetric bargaining power situations, our model predicts actual outcomes better than the Nash solution. The critical importance of integrating social-psychological factors to understand the bargaining process and improve predicted outcomes is underscored.
Liu, B S C and Balakrishnan, P V, “Dispositional and situational factors on bargaining concession rates and outcomes: predictive power of NIMBuS–an integrated model of Buyer-Seller negotiations”, Journal of Personal Selling & Sales Management, pp.1-24 2022.
Sellers who also serve need clarity on expected outcomes
Service-sales ambidexterity has recently been presented as a modern type of ambidexterity. Despite the huge prominence of ambidexterity’s antecedents, literature has overlooked the influence of the salesforce control system on service-sales ambidexterity that may turn into service-related performance outcomes. This research examines three main research questions: (1) whether behaviour-based and outcome-based control directly predict service-sales ambidexterity; (2) how service-sales ambidexterity affects service recovery performance and service innovation capabilities; (3) how the relationship among antecedents and outcomes of service-sales ambidexterity shaped by the interaction effect of manager trust in salesperson and resistance to change. We tested our research framework using a sample of 344 sales employees.
The findings advocate that behaviour-based control has a negative impression on service-sales ambidexterity. In contrast, outcome-based control has a substantial positive impact on service-sales ambidexterity. The study findings also demonstrate the positive influence of service-sales ambidexterity on both service innovation capability and service recovery performance. The present research found that manager trust in salespersons and resistance to change significantly moderating the relationship between antecedents and outcomes. This study contributes to several literatures and recommends future direction for researchers and practitioners.
Ahmad, B, Liu, D, Akhtar, N and Siddiqi, U I, “Does service-sales ambidexterity matter in business-to-business service recovery? A perspective through salesforce control system”, Industrial Marketing Management, 102, pp.351-363, 2022.
Effective sales leader communications promote salesperson resilience
The resilience of B2B sales forces is crucial in facing severe, wide-ranging challenges during a crisis. This study investigates the role of leader communication of the crisis in promoting salesperson resilience during COVID-19. The data were gathered from 418 salespersons from 36 manufacturing firms during COVID-19. The data were analyzed using multilevel structural equation modelling.
The results demonstrated the positive relationship between leader crisis communication and salesperson resilience, mediated by salespersons’ positive stress mindset. Family strain and core beliefs challenges were found to attenuate the positive linkage between leader crisis communication and salespersons’ positive stress mindset. Theoretical and practical implications are presented. This study offers insights to help managers in B2B organizations better understand and implement mechanisms that can foster resilience among their B2B sales forces in the COVID-19 outbreak and other crises.
Tuan, L T, “Leader crisis communication and salesperson resilience in face of the COVID-19: The roles of positive stress mindset, core beliefs challenge, and family strain”, Industrial Marketing Management, 102, pp.488-502, 2022.
Hyper proactivity needed when on the trade show and event circuit
Small and medium-sized enterprises (SMEs) are often forced to optimize costs due to limited resources. Thus, it is important to prioritize factors that will indeed bring results in a trade show context. Salesforce proactiveness is discussed as an outcomes driver which is accessible to any SME, regardless of available resources. This study examines the impact of sales force proactiveness on the exhibitor’s network and sales performance. A quantitative study was applied based on Structural Equation Modeling (SEM) and an Ordered Logit model (OLM). The analysis used data from 362 Portuguese SMEs/exhibitors.
The results show that the sales force’s proactivity influences the stand team’s main tasks, namely the networking (Network Capability) and sales performance (profit, sales amount and return on investment). The results also reveal that continuous participation in trade shows contributes to sales performance. The main conclusion is that, from the exhibitor’s perspective, sales force proactiveness inspires success by generating leads and sales without the need for significant investments. The findings have implications on how trade show exhibitors can better employ their sales force strategies and improve their sales effectiveness and return on investment.
Silva, P M, Moutinho, V F, and Vale, V T, “Examining the Relationship between Sales Force Proactiveness, Network Capability and Sales Performance: Evidence from International Trade Shows”, Journal of Promotion Management, 28(5), pp.559-583, 2022.
Both parties in a relationship need commitment
Commitment is a core concept in the study of buyer-supplier relationships. Much of the extant research on commitment in buyer-supplier relationships utilizes a global, unidimensional definition of commitment. In contrast, research on employees’ organizational commitment utilizes a three-facet model, separately considering continuance commitment, affective commitment, and normative commitment. A review of the literature suggests three gaps. First, multiple facets of commitment, particularly normative commitment, have been relatively unexplored. Second, most research examines a buyer’s commitment to a supplier and much less a supplier’s commitment to a buyer. Finally, commitment to research in developing countries is limited. A three-facet commitment model—with antecedents and outcomes of each—is developed. Data is collected from buyers and suppliers in Thailand, providing an in-built replication and two tests of each hypothesis. The results show support for the three-facet model and identify light and dark side outcomes from the different facets. Implications for theory and practice are discussed.
Abe, M, Cannon, J P, and Smith, T D, “The nature of commitment in buyer-supplier relationships”, Journal of Inter-Organizational Relationships, 27(3-4), pp.60-81, 2021.
Results reveal that salesperson analytical skills have both a direct and a moderating effect on sales performance across varying selling situations.
When it is a risky purchase, buyers call the salesperson
Based on insights from the buying process, this study aims to align selling firms to the buyer’s efficiency needs that are grounded on the different types of purchases. In line with buyer enablement, buyers prefer personal selling when they perceive the sales offer as highly risky for the buying organization, whereas they strongly prefer a direct marketing approach by the selling firm when they are purchasing low-risk purchases. This paper addresses the buyer’s sourcing needs and presents how direct marketing channels and personal selling should be balanced to increase the return on salesforce resources. This is one of the first studies to examine how sales organizations can create value by facilitating the buying process. Depending on the buyer’s categorization of the sales offer, this study highlights how a choice between direct marketing or personal selling improves the buyer’s perception of the sales organization.
Paesbrugghe, B, Vuori, J and Kock, H, “Selling to enabled purchasers: the effect of perceived supply risk and profit impact on the buyer-seller interaction”, Journal of Business & Industrial Marketing, 2021.
Customer success management, a driver of value for both parties
Applications of customer success management are gaining increasing importance globally across industries. Especially when selling and delivering complex offerings, suppliers need to prove that value that has been promised in a value proposition is delivered to the customers or even exceeded in the post-purchase usage processes. This paper investigates the antecedents that drive the implementation of customer success management from a customer and supplier perspective and analyses how far these perceptions differ or overlap. Based on interviews with 95 supplier and customer firms’ representatives, the study reveals eleven drivers for implementing customer success management that relate to customer perceived expected, experienced and relationship value. It further highlights key similarities and differences in the perceived relevance of these driving factors between suppliers and customers. Based on these findings, this study also provides insights for managers on the supplier and customer side on when to invest in customer success management endeavours.
Kleinaltenkamp, M, Prohl-Schwenke, K, and Keränen, J, “What drives the implementation of customer success management? Antecedents of customer success management from suppliers’ and customers’ perspectives”, Industrial Marketing Management, 102, pp.338-350, 2022.
Digital transformation is dependent on transforming the skills of salespeople
Several studies suggest that accelerating technology, increasing product complexity, and an expanding volume of information in the marketplace is changing sales roles, necessitating a review of the current sales skills required for success. Using mixed methods, we examine the skills required of contemporary B2B salespeople. First, we draw on unique data from 3.8 million LinkedIn job postings to examine which skills sales recruiters are seeking in new hires. Whilst confirming the importance of previously researched sales skills, this identified a sales skill largely disregarded by the extant literature: salesperson analytical skills. We triangulated these findings through interviews with 20 sales executives and developed a scale to measure this new analytical skills construct. Then, to test the scale’s predictive and nomological validity, we used survey data from 251 business-to-business salespeople. Results reveal that salesperson analytical skills have both a direct and a moderating effect on sales performance across varying selling situations.
Peesker, K M, Kerr, P D, Bolander, W, Ryals, L J, Lister, J A, and Dover, H F, “Hiring for sales success: The emerging importance of salesperson analytical skills”, Journal of Business Research, 144, pp.17-30, 2022.
Highlighting the achievements of salespeople whose performance is only slightly better than novices can be more effective at increasing performance and retention rates among novices than highlighting salespeople with far better performance.
Celebrate deeper than just the top performers
Companies frequently recognize top-performing salespeople to inspire those not recognized to exhibit greater performance and commitment to the company. This research investigates if, contrary to common industry practice, there are cases where recognition of unexceptional performers, those whose lower-tier performance is only slightly above the unrecognized, can positively affect novice performance and retention (ie, new, or inexperienced) salespeople. In one field experiment with a company that has annual revenues over two billion dollars and two lab experiments, the authors demonstrate that highlighting the achievements of salespeople whose performance is only slightly better than novices can be more effective at increasing performance and retention rates among novices than highlighting salespeople with far better performance. The enhancements include higher activity rates (Study 1) and company commitment (Study 2; Study 3). This research demonstrates the role relative standing plays in creating effective recognition strategies and refutes a commonly practised recognition approach.
Harding, R D, and Murdock, M R, “Now presenting the undistinguished achievement award: how relative standing creates exceptional outcomes from recognizing unexceptional sales associates”, Journal of Personal Selling & Sales Management, pp.1-12, 2022.
Strong customer orientation minimises negative word-of-mouth outcomes
Our understanding of the factors that motivate business-to-business (B2B) buyers’ negative word-of-mouth (NWOM) intentions in response to a suspected salesperson transgression and subsequent recovery effort is limited. This is surprising given the frequency with which salesperson transgressions occur and the ease with which buyers can disseminate their resulting dissatisfaction through NWOM. We address this shortcoming across two studies. In the first study, we examine buyers’ NWOM intentions in response to a supplier transgression and recovery attempt. Consistent with suspicion theory and the idea that buyers have limited information when confronting these situations, we find that buyers’ NWOM intentions are higher following the commission of a suspected transgression by a selling-oriented as opposed to a customer-oriented salesperson. However, we also find that while salesperson-led recovery efforts result in no difference in NWOM intentions across the two types of salespeople, manager-led recovery efforts result in significantly greater NWOM intentions for selling-oriented salespeople. In the second study, we replicate these findings while also demonstrating that buyers’ interactional justice perceptions mediate this process. We discuss the theoretical and managerial implications arising from these findings while presenting avenues for future research in the area.
DeCarlo, T E and Hansen, J D, “Examining buyers’ negative word-of-mouth intentions following suspected salesperson transgressions”, Industrial Marketing Management, 102, pp.35-44, 2022.
Managing the outputs drives sales performance
This study empirically investigates the effect of salesforce output control on perceived job autonomy, customer-oriented selling behaviours, and sales performance. According to the study’s findings, output control significantly and positively impacts perceived job autonomy. It also discovers that perceived job autonomy improves both customer-directed problem-solving and adaptive selling behaviours. Furthermore, the study finds that customer-directed problem-solving and adaptive selling behaviours both improve sales performance. Moreover, the study uncovers that perceived job autonomy mediates the relationship between output control and customer-oriented selling behaviours, whereas both customer-oriented selling behaviours mediate the relationship between perceived job autonomy and sales performance.
The current study provides both practical and theoretical insights into salesforce control dynamics, job autonomy, adaptive selling behaviour, customer-directed problem-solving behaviour, and sales performance. The findings have important implications for sales organisations because they can assist sales managers in determining the best type of salesforce control system to deploy and highlight the strategic role job autonomy plays in enhancing sales performance. The current study shows how output control can influence salespeople’s perceived job autonomy, adaptive selling, and customer-directed problem-solving behaviours and how these can improve sales performance.
Amenuvor, F E, Basilisco, R, Boateng, H, Shin, K S, Im, D, and Owusu-Antwi, K, “Salesforce output control and customer-oriented selling behaviours”, Marketing Intelligence & Planning, 2022.
Articles featured in the research review are unavailable from the editorial staff or the International Journal of Sales Transformation. The publishers and authors acknowledge the copyright of the articles. Readers wishing to find out more about a particular paper can use a simple search online using the author and paper title to find out more details on the paper.