Assessing sales contest effectiveness: the role of salesperson and sales district characteristics
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Assessing sales contest effectiveness: the role of salesperson and sales district characteristics Srinath Gopalakrishna & Jason Garrett & Murali K. Mantrala & Shrihari Sridhar
# Springer Science+Business Media New York 2015
Abstract Sales contests are widely employed to improve short-term sales performance, but knowledge about their effectiveness at the individual salesperson level remains sparse. Proponents argue that contests increase sales by stimulating salespeople, while critics say that contests merely encourage strategic timing of sales efforts. The authors draw on the strategic sales timing literature and goal theory to hypothesize that in a consultative selling scenario, sales will dip below the baseline before the contest but increase above the baseline during and after the contest. They posit that sales district potential and salesperson ability moderate the pre-contest sales dip, contest sales boost, and post-contest sales. Results from a model based on individual-level data on 1180 salespeople in 78 sales districts are largely supportive of the hypotheses. They highlight the need for researchers to integrate the role of strategic timing, salesperson, and sales district characteristics to assess sales contest outcomes. For practitioners, the findings show that in consultative selling situations, contests can generate a net sales increase despite the occurrence of timing games, and the sales gain is higher in districts with lower sales potential and among salespeople with higher sales ability. Keywords Sales contests . Sales force management . Marketing strategy . Multilevel models S. Gopalakrishna (*) : M. K. Mantrala Trulaske College of Business, University of Missouri, 434 Cornell Hall, Columbia, MO 65211, USA e-mail: [email protected] M. K. Mantrala e-mail: [email protected] J. Garrett Foster College of Business, Bradley University, 123 Baker Hall, Peoria, IL 61625, USA e-mail: [email protected] S. Sridhar Smeal College of Business, Penn State University, 457 Business Building, University Park, PA 16802, USA e-mail: [email protected]
Mark Lett
1 Introduction Sales contests are widely employed to boost salespeople’s short-term productivity. US annual spending on sales contests exceeds $9 billion (Lim, Ahearne, and Ham 2009). Despite their general popularity and the heavy expenditures involved, questions about whether contests effectively stimulate individual salespeople and boost overall sales persist in the academic and practitioner circles (Tosdal 1924; Murphy and Dacin 1998). A major issue with contests is that they can induce salespeople to engage in strategic timing games such as stalling and/or withholding orders (sandbagging) until the contest begins in order to display higher sales within the contest horizon (Dodge 1973; Marchetti 2004). The concern is that timing games may merely redistribute sales over the contest analysis period and imply no net sales gain (e.g., sales declines before and/or after the contest may nullify the sales lift during the contest). While anecdotal evide
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