effective techniques to optimize a sales force while decreasing turnover

Running head: EFFECTIVE TECHNIQUES 1

Effective Techniques to Optimize a Sales Force while Decreasing Turnover

Brett Chase

The Chicago School of Professional Psychology

EFFECTIVE TECHNIQUES 2

Abstract

This paper explores ten peer reviewed empirical study’s to investigate effective techniques

organizations can use to optimize a sales force while decreasing turnover. Each article offers a

unique perspective on the relationship between organizations, sales people, and their customers.

They are described in chronological order throughout the paper. First, the initial hiring process is

examined using company image and its impact on attracting and retaining the best profit

producers. Then, approaches to strengthen relationships between management and staff are

presented relating managerial support, organizational commitment, and job performance to

turnover. Next, the relationship between sales people and customers are tested using hypothetical

scenarios. To emphasize the importance of this relationship, customer relationship management

devices are used to measures actual data. Finally, the driving force behind successful

organizations is identified by the genuine conviction of the salesforce to adamantly support the

products and services they are selling.


Effective Techniques to Optimize a Sales Force while Decreasing Turnover

Before the initial hiring process begins and the criteria is identified for selection the

image of the company must be factored into the equation. The better Image the company has the

better talent they will attract and retain. With this in mind, a scale was developed by Berthon, P.,

Ewing, M., & Hah, L. L. (2005) to measure employer attractiveness. They used students that

were just about to enter the job force and determined the factors that they considered important

when looking for their ideal employer. The data that was collected was used to develop a

measurement for employer attractiveness.

The unique dimensions of the scale consisting of social, development, application,

interest, and economic values was confirmed to be a valid scale to assess employer

attractiveness. Organizations can utilize the power of this tool to give them a distinct advantage

in the marketplace. By increasing their image based on what potential job seekers are looking for

they can reduce the cost of employee acquisition and increase retention. The organization’s

improvement of employee relations will create a more productive salesforce that will transfer to

better customer relationships leading to a more profitable organization.

Organizations with good brand images have earned a certain amount of notoriety and

have the potential to grow their salesforce if they capitalize on their moment in the spotlight. Not

everyone can make the cut, so how do hiring managers choose the best profit producers? To

answer this question, Darmon, R. Y. (1993) took salespeople that were recruited from various

sources with different experience levels and evaluated them to determine their potential long

term monetary value. Cost and revenue information by salespeople's sources had been gathered


from company's accounting records after a three month trial period. When the profit was

correlated with salespeople according to their initial competence level, it was possible to

compare the profitability of salespeople coming from different employment backgrounds and

initial experience.

Surprisingly, his hypothesis that that there would be a higher increase in sale figures from

participants with a greater level of sales experience in the field was disconfirmed. The best

source of candidates were found to be already working within the company in non-selling

positions. This study argues that familiarity with the company itself rather than being proficient

in sales techniques may be a more important factor in long term sales growth. These employees

are already familiar with the firm and can be trained and motivated to become revenue producers

for the company as well.

Retaining valuable employees and utilizing them in different areas of the company can

have a tremendous effect on the profitability of the organization. This transition into sales can be

extremely volatile. If it is not handled appropriately it can increase employee’s propensity for

turnover intention. They must go through vast amounts of product training while realizing the

stresses of quota attainment under new management. A good leader can guide multiple

employees through these challenges by using Ehrhart’s seven dimensions of servant leadership.

This is a practice of leadership that focuses on positive working relationships between a superior

and their group. It promotes an uplifting work environment in which feelings of attachment and

loyalty to the organization are created.

In a study conducted by Jaramillo, F., Grisaffe, D. B., Chonko, L. B., & Roberts, J. A.

(2009) responses from five hundred and one salespeople were taken from an online survey and

used to examine the correlation between servant leadership and turnover intention. It was found


that servant leadership directly affects turnover intention through person–organizational fit, and

organizational commitment. Ehrhart’s seven dimensions can be used not only as a guideline to

create positive working relationships but also to lower turnover intention among employees. This

will create a more harmonious atmosphere that is conducive to job satisfaction and performance.

Leader member exchange (LMX) is another approach that can strengthen relationships.

This theory focuses on the connection between sales management and their staff on an individual

level rather than a group. To test this concept DeConinck, J. B. (2011) sampled salespeople as

well and measured their responses to test the effects of leader member exchange on turnover.

Using actual turnover data rather than turnover intentions, it was found that leader member

exchange is positively related to turnover through organizational commitment. Salespeople in a

high LMX relationship with their sales manager reported higher organizational commitment,

leading to lower turnover. This study as well as the previous study related managerial support to

turnover through organizational commitment.

These results suggest that organizational commitment is a strong indicator of whether or

not an employee will leave a company. Organizational commitment can also be used to predict

performance. To expand this theory and make it more applicable, methods used to increase job

performance and reduce employee propensity to leave were examined in the Asian market place.

Rutherford, B., Park, J., & Han, S. (2011) surveyed Korean sales employees from department

stores to test the effects of organizational commitment and exhaustion on performance and

salespeople’s propensity to leave an organization.

They found that organizational commitment related positively with job performance.

Validating are previous two studies, the results also indicated that when organizational

commitment increased salespeople’s propensity to leave decreased. An increase in emotional


exhaustion was also examined and had a direct impact of increasing employee propensity to

leave. This provides a unique perspective that proves that organizational commitment,

managerial support, and job performance are not the only factors that indicate turnover.

Managers can use these theories as a guide to increase job performance and decrease a

salesperson’s propensity to leave. To be successful, sales managers must go a step further and

advise their staff on effective sales techniques to use. The most traditional technique is known as

sales contests. To analyze the potential outcome of this technique Poujol, F. J., & Tanner, J. F.

(2010) gave sales people in the financial industry scenarios to measure how sales contests

influence customer orientation. The results indicated that contests with lower frequencies of

solicitation reported greater customer orientation. Salespeople were also found to have positive

customer orientation when the contest was organized in teams rather than an individual format.

When mangers are advising their staff to use this sales technique, they should make sure

that the entire group of salespeople are included. They should also advise them not to bombard

their customers with phone calls and emails. Sales contests must be targeted to specific

customers in longer time frames. This will help to maintain a positive relationship between the

customers and the sales staff. The better long term relationship the sales staff have with their

customers, the more sales goals they can achieve.

Communication between salespeople and their customers should ideally be beneficial to

both parties. Sales people abuse that trust when they bombard their customers with phone calls

and emails because they are forced to participate in a sales campaign. Even when trust has been

established, the mood of the customer may interfere with their purchase decisions. To examine

the implications that mood has on purchase decisions Puccinelli, N. M. (2006) used students to

examine the effect between customers and salespeople with contrasting emotions.


Playing the role of the customer, the student’s mood was manipulated to be positive or

negative prior to engaging with salespeople with altering moods. Actors recruited through

theatrical organizations on the university campus served as the salespeople. The results found

that customers in a negative mood had even worse feelings after encountering a salesperson with

a positive mood. These feelings had a direct effect on their evaluation of the product showing a

willingness to pay less. This implies that when customers are in a bad mood, a salesperson’s

positive attitude is ineffective. It not only makes the customers feel worse, it also leads them to

believe that the product or service that is being sold is worth less money.

Forcing the sale in this scenario would have negatively impacted the relationship between

the salesperson and the customer. Furthermore, it would have drove down the value of the

products and services being advertised. This study as well as the previous study are related by

hypothetical scenarios done in a controlled environment. They were able to test cause and effect

relationships without the potential loss of real currency. Having done this study in a controlled

environment also avoided the risk of endangering real relationships between salespeople and

their customers.

To measure the real impact between salespeople and customers Yim, F. H., Anderson, R.

E., & Swaminathan, S. (2004) collected survey data from managers in various investment and

insurance companies in Hong Kong. The data gathered was used to test the effectiveness of their

customer relationship management devices (CRM) on company performance. The CRM was

measured on four key components. This consisted of focusing on key customers, managing

knowledge, organization structure, and incorporating CRM based technology. The performance

metrics that were measured were customer satisfaction, customer retention, and sales growth.


Results indicated that the technological components of CRM did not significantly

enhance any of the performance metrics. When CRM technology is used only for data

warehousing, database marketing, and pushing automated campaigns and advertisements it

diminishes the relationship between the salesperson and the customer. The technology of the

CRM should never be used as a substitute for real time interaction between customers and sales

staff. The successful combination of focusing on key customers, managing the knowledge of

CRM activities, and organizing the staff around the CRM will increase customer satisfaction,

customer retention, and sales growth.

One of the CRM’s main purpose is to provide salespeople with the ability to focus on key

customers by managing the knowledge of their customers past purchases and interactions. This

knowledge can have a profound effect when it comes to future purchases adding the ability for

cross selling of multiple products. In a comparative study of cross selling practices, Vyas, R. S.,

& Math, N. B. (2006) tested this theory on public and private sector banks located in India.

Through qualitative interviews with top executives at these public and private sector banks, their

perspectives revealed different tactics utilized by both financial institutions to get to the same

goal of profitability.

Sharing the results of the study, both sectors were able to learn from each other’s

strengths and weaknesses. Private sector banks needed to decrease their aggressive cross selling

efforts and take on the customer focused values of the public sector banks. The public sector

banks needed the technology of the private sector banks to utilize CRM tools to utilize their

customer base. These banks can also prosper by offering their staff incentives and specialized

training.


By incorporating the techniques of their competitors they will be able to further the

effectiveness of their own cross selling initiatives. High level executives must view their

competition in the market place as a beneficial guide to success rather than a hindrance.

Organizations need to be consistently improving and adjusting to the changing marketplace in

order to survive. Optimizing the effectiveness of cross selling in an organization’s salesforce is

one of the most profitable ways to not only survive in the marketplace, but to prosper.

Salespeople have to coordinate these techniques while managing relationships

with their supervisors as well as their customers. While this may be imperative to the overall

success of the salesforce, perhaps the most vital attribute is the salesperson’s ability to identify

with the products and services they are selling. To explore this notion, Badrinarayanan, V., &

Laverie, D. A. (2011) examined the influences a manufacturer and their representatives have on

brand identification among retail salespeople.

The retailer’s intranet was used to examine these influences because salespeople were

familiar with the system and accessed it on a daily basis to learn about their responsibilities,

tasks, and announcements made by the manufactures. Utilizing the company’s intranet,

salespeople were chosen at random and assigned to complete a survey regarding a specific

manufacturer. The same format was used to assess the manufacturer’s brands as well as their

representatives. It was found that when manufactures had a good brand image and their

representative’s acknowledged retail sales people, brand identity would increase among the

salesforce. Once the retail sales person identified with the brand, they made a greater effort to

sell the product.

Retail salespeople represent an important link for manufacturers. They communicate their

thoughts and opinions directly to the retail customer. They should be looked at as an extension of


the manufactures themselves. These salespeople are the last and arguably the most important

factor before the purchase decision is made by the customer. They have the final choice as to

which product they want to advise their customer to purchase. This study argues that if the retail

sales person identifies with the manufacture’s brand, they will make a greater effort to sell that

product.

I have researched many ways in which an organization can implement techniques to

optimize their salesforce but none of them will be effective if the individual salesperson does not

believe in the product. Ultimately, the driving force behind any successful organization is the

genuine conviction of their salesforce to adamantly support their products and services. The

salesforce is the company’s first customer. If the salesperson is not invested in the product, then

it is less likely that the customer will be as well.


References

Badrinarayanan, V., & Laverie, D. A. (2011). Brand Advocacy and Sales Effort by Retail

Salespeople: Antecedents and Influence of Identification with Manufacturers'

Brands. Journal of Personal Selling & Sales Management, 31(2), 123-140.

Berthon, P., Ewing, M., & Hah, L. L. (2005). Captivating company: dimensions of attractiveness

in employer branding. International Journal of Advertising, 24(2), 151-172.

Darmon, R. Y. (1993). Where Do the Best Sales Force Profit Producers Come From? Journal Of

Personal Selling & Sales Management, 13(3), 17-29.

DeConinck, J. B. (2011). THE EFFECTS OF LEADER-MEMBER EXCHANGE AND

ORGANIZATIONAL IDENTIFICATION ON PERFORMANCE AND TURNOVER

AMONG SALESPEOPLE. Journal of Personal Selling & Sales Management, 31(1), 21-

34. doi: 10.2753/PSS0885-3134310102

Jaramillo, F., Grisaffe, D. B., Chonko, L. B., & Roberts, J. A. (2009). EXAMINING THE

IMPACT OF SERVANT LEADERSHIP ON SALESPERSON'S TURNOVER

INTENTION. Journal of Personal Selling & Sales Management, 29(4), 351-365.

Poujol, F. J., & Tanner, J. F. (2010). The Impact of Contests on Salespeople’s Customer

Orientation: An Application of Tournament Theory. Journal of Personal Selling & Sales

Management, 30(1), 33-46.


Puccinelli, N. M. (2006). Putting Your Best Face Forward: The Impact of Customer Mood on

Salesperson Evaluation. Journal of Consumer Psychology (Lawrence Erlbaum

Associates), 16(2), 156-162. doi:10.1207/s15327663jcp1602_6

Rutherford, B., Park, J., & Han, S. (2011). Increasing Job Performance and Decreasing

Salesperson Propensity to Leave: An Examination of an Asian Sales Force. Journal of

Personal Selling & Sales Management, 31(2), 171-184.

Vyas, R. S., & Math, N. B. (2006). A Comparative Study of Cross-Selling Practices in Public

and Private Sector Banks in India. Journal of Financial Services Marketing, 10(4), 123-

134. doi:10.1057/palgrave.fsm.4760027

Yim, F. H., Anderson, R. E., & Swaminathan, S. (2004). Customer Relationship Management:

Its Dimensions and Effect on Customer Outcomes. Journal of Personal Selling & Sales

Management, 24(4), 263-278.

effective techniques to optimize a sales force while decreasing turnover

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