Managing Sales Force Product Perceptions and Control Systems in the Success of New Product Introductions


Speaker


Abstract

Given the importance of new products, firms may be prone to using behavior-based control systems on their salespeople that dictate the performance of particular activities related to the introduction.
Such controls may be especially tempting given our findings that favorable salesperson product perceptions actually yield less effort on the new product, and behavior-based controls can offset this tendency.  However, using longitudinal data from a sample of 226 pharmaceutical salespeople, along with external ratings from customers and archival measures of effort and sales performance, we demonstrate that such a strategy is short-sighted.  Behavior-based controls constrain a salesperson’s ability to appropriately allocate effort across his or her customer base, negatively impacting customer product perceptions and, ultimately, new product sales.  In contrast, outcome-based control systems enable salespeople to work smarter, and their corresponding effort on behalf of the new product has a more positive effect on customer product perceptions and new product sales.
 
As a follow-up to this study, a field based experiment involving 94 inside salespeople working for a major industrial supply company was conducted to better understand the link between control-systems and salesperson performance.  Salespeople were randomly assigned to two groups and were either provided exact instructions on customer contacts based on a widely utilized commercial RFM model or given the freedom to execute calls in the manner they deemed most effective.
The findings of this experiment demonstrate that behavior-based controls, although increasing activity, may reduce the effectiveness of salespeople.  Findings related to individual differences such as saleperson experience, time in territory and expertise provide further insights into this finding.
 
Contact information:
Dicea Jansen
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