Sales force commissions in relationship marketing

2017 ◽  
Vol 12 (1) ◽  
pp. 53-76 ◽  
Author(s):  
Said Echchakoui
Keyword(s):  
Relationship Marketing ◽  
Portfolio Management ◽  
Retention Rate ◽  
Real Data ◽  
Sales Force ◽  
Sales Manager ◽  
Content Type ◽  
Symmetric Information ◽  
Customer Lifetime ◽  
Hypothetical Data

Purpose This paper aims to examine the roles of both aggregate and specific commission rates to control the sales force in relationship marketing with a customer portfolio. Design/methodology/approach Drawn on the concept of customer lifetime value and agency theory, the author calculated both specific and aggregate sales force commission rates in a relationship marketing perspective. Contrary to the prior researchers, the author assumes that, at any period, both the gross margins and retention rate of each customer are a stochastic function of the salesperson’s effort. Findings The results indicated that when there is symmetric information between a sales manager and salesperson, both aggregate and specific commissions can be used to monitor the sales force. Under asymmetric information, however, each type of commission rate can only be used under certain conditions. In addition, conditions in which the aggregate commission is equivalent to the specific commission for each customer were derived. Research limitations/implications Hypothetical data were used to explain the model. It would be more appropriate to use real data to see its managerial relevance. Originality/value In the author’s knowledge, this study is the first that specifically links scholastic customer’s retention and salesperson commission rate to monitor salesperson effort in relationship marketing. It is also the first that shows in which conditions aggregate and specific commission rates are equal for a salesperson’s customer portfolio management.

Salesperson profitability in relationship marketing

2014 ◽  
Vol 9 (3) ◽  
pp. 306-323 ◽  
Author(s):  
Said Echchakoui
Keyword(s):  
Relationship Marketing ◽  
Transaction Cost Economics ◽  
Retention Rate ◽  
Sales Force ◽  
Customer Relationship ◽  
Critical Duration ◽  
Sales Managers ◽  
Content Type ◽  
Dynamic Exchange ◽  
The Relationship

Purpose – This paper aims to answer a prominent question that arises for the manager who wishes to recruit a salesperson to maintain and develop a portfolio–customer relationship: Under which condition is this decision profitable for the firm? Though several authors have underscored the importance of the salesperson's role in the creation of purchaser–salesperson relationships, in the author's knowledge, no study has focused on the salesperson's profitability in the relationship approach. This issue is significant for sales managers because the investment in sales force is greater, and the relationship profitability with customers is not guaranteed. Design/methodology/approach – Econometric model based on transaction cost economics theory and dynamic exchange between firm, salesperson and a customer. Specifically, this model links between customer life value, firm financial value, salesperson cost and relationship time. Findings – Three zones are identified that can characterize the dynamic salesperson profitability. It was shown that only one zone can be profitable to the firm. Research limitations/implications – This result is important because it can solve the equivocal posit between scholars with regard to the success or the failure of relationship marketing. This study also specifies the critical retention rate, the critical duration time in which a salesperson begins to be profitable. Originality/value – In the author's knowledge, this study is the first to use an exchange model to show in which conditions the salesperson will be profitable in relationship marketing.

Examining the use of sales force management practices

2017 ◽  
Vol 32 (7) ◽  
pp. 974-986 ◽  
Author(s):  
David A. Reid ◽  
Richard E. Plank ◽  
Robert M. Peterson ◽  
Gregory A. Rich
Keyword(s):  
Management Practices ◽  
Sales Management ◽  
Sales Force ◽  
Sales Manager ◽  
Future Research ◽  
Sales Managers ◽  
Market Place ◽  
Sampling Frame ◽  
Cross Sectional ◽  
Content Type

Purpose The purpose of this paper is to understand what sales management practices (SMPs) are being used by managers in the current market place, changes over time, insights that can be gained and future research needs. Design/methodology/approach Data for this paper were collected via a cross-sectional internet-based survey using a sampling frame provided by a professional sales publication. ANOVA was used to analyze 159 sales manager respondents. Findings Empirical results indicate that several differences are evident across the 68 SMPs items gathered, especially in terms of the size of the sales force and establish some data on using technology in sales management. However, in spite of significant changes in the sales environment, many SMPs have had limited change. Research limitations/implications The limitations of this paper include a sample frame drawn from a single source and via the internet and, thus, may have excluded some possible respondents from participation and somewhat limit generalizability. Practical implications The results of this paper raise a number of important issues for sales managers to consider. First, which SMPs should they be using? Managers need to give serious thought as to which practices they choose to use. Second, why are so many of them not making more extensive use of sales force technology? Third, is it wise for sales managers to be relying on executive opinion as their most extensively used forecasting method or should they be emphasizing another approach? A fourth issue is the continued heavy emphasis on generating sales volume as opposed to profits. Originality/value The data provide a rare and updated understanding of the use of SMPs by sales managers.

Accounting for asymmetry between strengths, weaknesses, opportunities and threats in outranking methods

2017 ◽  
Vol 12 (2) ◽  
pp. 265-290
Author(s):  
Nassim Dehouche
Keyword(s):  
Portfolio Management ◽  
Decision Aid ◽  
Swot Analysis ◽  
Evaluation Criteria ◽  
Real Data ◽  
Multicriteria Decision Aid ◽  
Content Type ◽  
Multicriteria Decision ◽  
Planning Project ◽  
Outranking Methods

Purpose The purpose of this paper consists in discussing and modeling the asymmetrical nature of evaluation criteria that are notably relevant in strategic planning, project portfolio management and complex systems management. Design/methodology/approach The author guarantees the theoretic validity of the proposed approach, by showing that it possesses desirable properties such as monotonicity. This allows for a reduced implementation time and thus a real-time use of the model. Findings The author conducts a comparative study with two other multicriteria decision aid models on a set of real data regarding a power plant sitting problem and highlights some of the limitations of previous models compared to the proposed approach. Originality/value This paper describes a novel multicriteria decision aid model, entitled SPADE (which is an acronym for Structuring Preferences to Aid DEcisions). It aims at consolidating SWOT analysis with sound decision-theoretic techniques, and making use of its results to support decision-making.

Manager directives for salesperson ambidextrous selling and resulting job satisfaction: a regulatory focus perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thomas E. DeCarlo ◽  
Thomas Powers ◽  
Ashish Sharma
Keyword(s):  
Job Satisfaction ◽  
Regulatory Focus ◽  
Fortune 500 ◽  
Sales Force ◽  
Sales Manager ◽  
Customer Engagement ◽  
Future Research ◽  
Force Model ◽  
Cross Sectional ◽  
Content Type

Purpose To sustain firm profitability, it is critical for sales managers to direct business-to-business (B2B) salespeople to generate revenues by simultaneously acquiring new customers and selling to current customers. However, emerging research indicates territory-based B2B salespeople have a preferred customer engagement orientation that reflects a tendency for engaging in selling activities to new (i.e. hunters) and/or existing (i.e. farmers) customers, suggesting that managerial ambidexterity directives could have deleterious effects on salespeople. This paper aims to address this possibility by investigating the moderating effects of salesperson regulatory focus on the relationship between managerial directives for salesperson ambidexterity and salesperson job satisfaction. Design/methodology/approach The study uses a mixed-method approach by using a field study of 106 matched sales manager–salesperson dyads from a large Fortune 500 B2B industrial distributor sales force and an experiment involving 152 B2B salespeople from a cross-section of industries. Findings The results indicate that sales manager ambidexterity requests reduce salesperson job satisfaction. However, the findings also demonstrate that salesperson regulatory focus moderates these negative effects such that the negative effect of manager ambidexterity requests on job satisfaction is reduced for salespeople with high vs low levels of regulatory focus ambidexterity balance. The results from the cross-sectional experimental study illustrate the cognitive mechanism that helps explain why this occurs. Research limitations/implications The Fortune 500 firm used in Study 1 uses a territory-based generalist sales force model where salespeople are not incentivized to prioritize hunting over farming (and vice versa). As a result, the findings may not generalize to firms with hunting/farming incentive systems or to those that operate in particular industries requiring a focus on either hunting or farming. Practical implications The findings show why managers attempting to direct territory-based salespeople to increase their ambidexterity behaviors may undermine the job satisfaction of certain salespeople by triggering a decrease in motivation while the same directives have the opposite effect for other salespeople. The findings also demonstrate salesperson reactions to ambidexterity requests, which provide additional insights for effective salespeople hiring, training and management. Originality/value The findings have implications for better understanding the effectiveness of sales management leadership directives. The study also offers a promising direction for future research to investigate salesperson receptivity to managerial controls.

Professional sales coaching: an integrative review and research agenda

2015 ◽  
Vol 49 (7/8) ◽  
pp. 1087-1113 ◽  
Author(s):  
Vishag Badrinarayanan ◽  
Andrea Dixon ◽  
Vicki L West ◽  
Gail M Zank
Keyword(s):  
Research Agenda ◽  
Sales Force ◽  
Integrative Review ◽  
Sales Manager ◽  
Future Research ◽  
Extensive Literature ◽  
Content Type ◽  
Theoretical Perspectives ◽  
Coaching Process ◽  
Professional Sales

Purpose – The purpose of this paper is to provide an integrative review of coaching research from different contexts (e.g. athletics, executive coaching, project management and sales), delineate professional sales coaching from other developmental activities and develop a research agenda for stimulating research on professional sales coaching. Professional sales coaching is considered an important sales force developmental program by both sales practitioners and researchers. Yet, research on sales coaching remains fragmented in the extant literature. Design/methodology/approach – An extensive literature review of extant research and theoretical perspectives on coaching as well as insights gathered from exploratory, in-depth interviews of ten sales managers were used to develop the research agenda. Findings – The review and research agenda identify a number of sales coaching-related topics that warrant further research. Specifically, the research agenda addresses salesperson characteristics, sales manager and coach characteristics, selling organization characteristics, sales coaching approaches, nature and effectiveness of the sales coaching process and, finally, outcomes of sales coaching. For each topic, extant research, relevant insights from exploratory interviews and directions for future research are discussed. Originality/value – This paper is the first integrative review of coaching-related research in the sales literature. It offers an updated conceptualization of sales coaching and identifies opportunities for future research.

Al-Ain eye centre: sales force evaluation dilemma

2020 ◽  
Vol 10 (2) ◽  
pp. 1-22
Author(s):  
Muhammad Muzamil Sattar
Keyword(s):  
Sales Management ◽  
Sales Force ◽  
Sales Manager ◽  
Team Management ◽  
Salesperson Performance ◽  
Content Type ◽  
Distribution Management ◽  
High Performing ◽  
Sales Force Management ◽  
Al Ain

Learning outcomes This case was written to help students develop their analytical and decision-making skills with regard to sales force evaluation. It identifies a variety of issues – in the Pakistani context particularly – within the sales force environment, including union representation, sales force team conflicts and power dynamics between superiors and subordinates. The various case lessons will enhance students’ analytical, negotiation and team-management skills. This case can be used to discuss the following issues: the complexity of objective and subjective evaluations of a sales force, sales force perceptions and cultural nuances for succeeding in Pakistan. Distribution structures and management in Pakistan. Characteristic features of the Pakistani pharmaceutical market. Students will be able to explain how salesperson performance information can be used to identify problems, determine their causes and suggest sales management actions to solve them. Students will be able to differentiate between an outcome-based and a behaviour-based perspective for evaluating and controlling salesperson performance. Students will understand how to control one’s behaviour in conflict situations by identifying common interests and achieving a “win-win” situation. Case overview/synopsis The Al-Ain case describes sales force management and sales force evaluation in a situation that involves a high-performing team operating in a hostile environment. Al-Ain eye centre (Al-Ain), located in the city of Karachi in Sindh state of Southern Pakistan, is a small-scale hospital that has diversified into the pharmaceutical business. Al-Ain’s product portfolio includes analgesics, antibiotics, ophthalmology products and cardiology products. This case focusses on team management and the relationship between a sales manager and subordinate salespeople in the context of Pakistani culture. A sales representative has received a poor performance assessment, which he perceives to be an unfair evaluation of his efforts. As a result of the situation, he subsequently joins a union and creates problems for his superiors. As they explore these management issues within a sales force, students will develop an appreciation for objective methods of sales force evaluation, as well as for the complexity of handling high-performing teams, the importance of employee perceptions and the scope of subjective biases in sales force evaluation that can emerge in practice. Complexity academic level The case is suited to undergraduate or MBA courses on sales management, organizational behaviour, distribution management, marketing/strategy and pharmaceutical industries. It addresses issues of sales force management, sales territory allocations, sales target fixation, team conflict, promotion, team bonus and distribution management in the pharmaceutical industry in Pakistan. Supplementary materials Teaching Notes are available for educators only. Subject code CSS 8: Marketing.

Overcoming over-identification

2019 ◽  
Vol 37 (3) ◽  
pp. 258-270
Author(s):  
Valter Afonso Vieira ◽  
Juliano Domingues da Silva ◽  
Colin Gabler
Keyword(s):  
Social Identity Theory ◽  
Sales Performance ◽  
Negative Influence ◽  
Sales Force ◽  
Self Concept ◽  
Sales Manager ◽  
Data Set ◽  
Content Type ◽  
Managerial Support ◽  
The Impact

Purpose The purpose of this paper is threefold: first, to determine the impact of interpersonal identification on sales performance; second, to uncover whether or not that relationship changes direction based on levels organizational prestige; and third, to test the antecedent of managerial support on salesperson interpersonal identification. Ultimately, the authors want to provide sales managers with tangible ways to nurture the self-concept of their sales force while optimizing sales performance. Design/methodology/approach The authors test the hypotheses using a data set of 196 B2C retail salespeople in the shoe industry. Respondents answered a printed questionnaire, which was analyzed using multiple linear regression and response surface analysis. Findings The authors find that managerial support does positively influence interpersonal identification among salespeople which, in turn, increases sales performance. However, the relationship is curvilinear, becoming negative when over-identification occurs. This inverted U-shaped relationship is moderated by organizational prestige such that the negative influence is overcome by employees who have pride and confidence in their organization. Practical implications Managers should balance the level of support that they provide their employees. While this mentorship generally leads to positive results, too much can lead to over-identification, and consequently reduce sales performance. However, this negative effect can be overcome if the salesperson perceives his organization as prestigious. Therefore, a mix of guidance and autonomy may foster the strongest self-concept among the sales team and generate the most positive outcomes. Further, managers should monitor their employees’ perceptions of the company, communicating its strong reputation internally to generate organizational prestige. Originality/value The authors extend social identity theory in a sales context to provide a better understanding of how self-concept can be altered – for better or worse – by the sales manager. The authors also show the importance of communicating your company’s social value to employees. While over-identification in the manager–employee dyad can create a “tipping point” where sales performance begins to decrease, organizational prestige may be able to overcome this effect, demonstrating the power of prestige. Together, the authors present the importance of contextual and external influences on individual sales performance.

scholarly journals Using project demand profiling to improve the effectiveness and efficiency of infrastructure projects

2018 ◽  
Vol 38 (6) ◽  
pp. 1422-1442 ◽  
Author(s):  
Janet Godsell ◽  
Donato Masi ◽  
Antonios Karatzas ◽  
Timothy Mark Brady
Keyword(s):  
Portfolio Management ◽  
Infrastructure Projects ◽  
Content Type ◽  
Utility Company ◽  
Efficient Delivery ◽  
Management Literature ◽  
Effectiveness And Efficiency ◽  
Stage 1 ◽  
Demand Profile ◽  
Theoretical Saturation

Purpose The purpose of this paper is to explore the applicability and utility of supply chain (SC) segmentation through demand profiling to improve the effectiveness and efficiency of infrastructure projects by identifying different types of project demand profiles. Design/methodology/approach A three-stage abductive research design was adopted. Stage 1 explored the applicability of SC segmentation, through demand profiling, to the portfolio of infrastructure projects in a utility company. Stage 2 was an iterative process of “theory matching”, to the portfolio, programme and project management literature. In stage 3, theoretical saturation was reached and “theory suggestions” were made through four propositions. Findings Four propositions outline how SC segmentation through project demand profiling could improve the effectiveness and efficiency of infrastructure projects. P1: the ability to recognise the different demand profiles of individual projects, and groups thereof, is a portfolio management necessity. P2: projects that contribute to the strategic upgrade of a capital asset should be considered a potential programme of inter-related repeatable projects whose delivery would benefit from economies of repetition. P3: the greater the ability to identify different demand profiles of individual/groups of projects, the greater the delivery efficiency. P4: economies of repetition developed through efficient delivery of programmes of repeatable projects can foster greater efficiency in the delivery of innovative projects through economies of recombination. Originality/value This work fills a gap in the portfolio management literature, suggesting that the initial screening, selection and prioritisation of project proposals should be expanded to recognise not only the project type, but also each project’s demand profile.

Effective customer selection for marketing campaigns based on net scores

2017 ◽  
Vol 11 (1) ◽  
pp. 2-15 ◽  
Author(s):  
René Michel ◽  
Igor Schnakenburg ◽  
Tobias von Martens
Keyword(s):  
Decision Trees ◽  
Direct Marketing ◽  
Real Data ◽  
Business Case ◽  
Added Value ◽  
Scoring Method ◽  
Content Type ◽  
Effective Selection ◽  
Selection For ◽  
Response Modeling

Purpose This paper aims to address the effective selection of customers for direct marketing campaigns. It introduces a new method to forecast campaign-related uplifts (also known as incremental response modeling or net scoring). By means of these uplifts, only the most responsive customers are targeted by a campaign. This paper also aims at calculating the financial impact of the new approach compared to the classical (gross) scoring methods. Design/methodology/approach First, gross and net scoring approaches to customer selection for direct marketing campaigns are compared. After that, it is shown how net scoring can be applied in practice with regard to different strategical objectives. Then, a new statistic for net scoring based on decision trees is developed. Finally, a business case based on real data from the financial sector is calculated to compare gross and net scoring approaches. Findings Whereas gross scoring focuses on customers with a high probability of purchase, regardless of being targeted by a campaign, net scoring identifies those customers who are most responsive to campaigns. A common scoring procedure – decision trees – can be enhanced by the new statistic to forecast those campaign-related uplifts. The business case shows that the selected scoring method has a relevant impact on economical indicators. Practical implications The contribution of net scoring to campaign effectiveness and efficiency is shown by the business case. Furthermore, this paper suggests a framework for customer selection, given strategical objectives, e.g. minimizing costs or maximizing (gross or lift)-added value, and presents a new statistic that can be applied to common scoring procedures. Originality/value Despite its lever on the effectiveness of marketing campaigns, only few contributions address net scores up to now. The new χ2-statistic is a straightforward approach to the enhancement of decision trees for net scoring. Furthermore, this paper is the first to the application of net scoring with regard to different strategical objectives.

scholarly journals Stakeholders’ perceptions and reputational antecedents

2015 ◽  
Vol 12 (3) ◽  
pp. 314-329 ◽  
Author(s):  
S. M. Riad Shams
Keyword(s):  
Relationship Marketing ◽  
Design Methodology ◽  
Target Market ◽  
Brand Positioning ◽  
Case Study Approach ◽  
Content Type ◽  
Stakeholder Relationships ◽  
Study Approach ◽  
The Impact

Purpose – It is recognised that reputation is a relational construct; however the impact of stakeholders’ various relational dimensions on their perceptions to influence reputation is not widely understood. The purpose of this paper is to add to the current understanding of stakeholders’ relationships, interactions, their subsequent relational dimensions and its impact on stakeholders’ perceptions to further influence relational reputation. Design/methodology/approach – This paper takes a case study approach. Findings – The findings of this study recognise the impact of relationship marketing (RM) on the influence of stakeholders’ perceptions. It discusses how RM substantiate the pertinent authenticity (symbolises reputation), relevance and differentiation (represent brand positioning) of an organisation’s profile and/or their market offerings, in relation to the interest of the target market through the cause and consequence of stakeholder relationships and interactions to influence their perceptions. The findings acknowledge 11 RM dimensions that have relational implications to nurture stakeholders’ perceptions and subsequent relational reputation, which appear viable across industries and markets. Originality/value – Underlying the cause and consequence of stakeholder relationships and interactions; these 11 RM dimensions emerge as antecedents to form/reform relational reputation. Further academic and professional implications of the findings are briefly discussed.

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