Assessing sales contest effectiveness: the role of salesperson and sales district characteristics
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.
KeywordsSales contests Sales force management Marketing strategy Multilevel models
The authors wish to thank the insurance company that provided access to several managers permitting extensive discussions and the sharing of proprietary agent-level data. They also thank the Forum for People Performance Management and Measurement at Northwestern University for their support of this research.
- Dodge, R. H. (1973). Field sales management: text and cases (pp. 284–289). Dallas: Business Publications, Inc.Google Scholar
- Duncan, C. S., Khattak, A. J., & Council, F. M. (2000). Applying the ordered probit model to injury severity in truck-passenger car rear-end collisions (pp. 65–71). Washington DC: Transportation Research Record, Paper No. 98–1237, TRB National Research Council.Google Scholar
- Fu, Q., & Jones, E. (2005). How quota setting policy influences salesperson risk behavior and effort level: sandbagging effect. Proceedings of the National Conference in Sales Management.Google Scholar
- Marchetti, M. (2004). Why sales contests don’t work. Sales & Marketing Management, 156(1), 19.Google Scholar
- Murphy, W. H., & Dacin, P. A. (1998). Sales contests: a research agenda. Journal of Personal Selling & Sales Management, 18(1), 1–16.Google Scholar
- Tosdal, H. R. (1924). The use of contests among salesmen. Harvard Business Review, 2(4), 480–489.Google Scholar
- Wotruba, T. R., & Schoel, D. J. (1983). Evaluation of salesforce contest performance. Journal of Personal Selling & Sales Management, 3(1), 1–10.Google Scholar