The sales learning curve

When a company launches a new product into a new market, the temptation is to immediately ramp up sales force capacity to gain customers as quickly as possible. But hiring a full sales force too early just causes the firm to burn through cash and fail to meet revenue expectations. Before it can sell an innovative product efficiently, the entire organization needs to learn how customers will acquire and use it, a process the authors call the sales learning curve. The concept of a learning curve is well understood in manufacturing. Employees transfer knowledge and experience back and forth between the production line and purchasing, manufacturing, engineering, planning, and operations. The sales learning curve unfolds similarly through the give-and-take between the company--marketing, sales, product support, and product development--and its customers. As customers adopt the product, the firm modifies both the offering and the processes associated with making and selling it. Progress along the manufacturing curve is measured by tracking cost per unit: The more a firm learns about the manufacturing process, the more efficient it becomes, and the lower the unit cost goes. Progress along the sales learning curve is measured in an analogous way: The more a company learns about the sales process, the more efficient it becomes at selling, and the higher the sales yield. As the sales yield increases, the sales learning process unfolds in three distinct phases--initiation, transition, and execution. Each phase requires a different size--and kind--of sales force and represents a different stage in a company's production, marketing, and sales strategies. Adjusting those strategies as the firm progresses along the sales learning curve allows managers to plan resource allocation more accurately, set appropriate expectations, avoid disastrous cash shortfalls, and reduce both the time and money required to turn a profit.     

Compensation contracts and fire sales

This paper analyzes the impact of remuneration practices on banks’ risk-taking in a model with fire sales externalities. When these externalities are not internalized by a bank's shareholders and executives, borrowing and fire sales are higher than the socially optimal level. Our analysis shows that plain-vanilla equity fails to internalize fire sales externalities. Deferred equity and long-term bonuses unrelated to short-term profits can restore social efficiency. Bail-in bonds can achieve efficiency at a smaller cost since they allow for state-contingent payments. It is not the level but the composition of variable compensation that determines the inefficiency. Excessive regulation may lead to suboptimal levels of risk-taking. Government guarantees reinforce the fire sales externalities and the need for regulation.     

Collusion under monitoring of sales

Collusion under imperfect monitoring is explored when firms' prices are private information and their quantities are public information; such an information structure is consistent with several recent price‐fixing cartels, such as those in lysine and vitamins. For a class of symmetric oligopoly games, it is shown that symmetric equilibrium punishments cannot sustain any collusion. An asymmetric punishment is characterized that does sustain collusion and it has firms whose sales exceed their quotas compensating those firms with sales below their quotas. In practice, cartels could have performed such transfers through sales among the cartel members.     

Permanent sales increase and investment

When firms experience increases in sales that they consider to be permanent, the present value of expected profits also increases, leading to increases in the firms' investments. Our study investigates the permanent sales hypothesis (PSH) of firms' investment; it examines whether investment decisions are influenced by changes in the permanent, in contrast to transitory, component of sales income increases. Using the co-integration test and the structural vector auto-regression (SVAR) framework, our paper finds strong support for the hypothesis that investment behavior is primarily explained by permanent changes in sales income. Empirical multiple time series regression results also confirm that investments are a function of a number of past yearly sales changes. Our results show that larger, more liquid, and lower debt ratio firms follow PSH more closely than smaller, less liquid, higher debt ratio firms. Recent studies on corporate investment (i.e., Fazzari, Hubbard, and Petersen, 1988) have argued that the higher the dependence on the internal source of funding of the investment, the stronger the severity of financing constraints. Our study shows that the more dependent on the permanent cumulative increase of internal source of funding a firm's funding on investment, the less financially constrained firms.     

Contract expiration and sales price

This article represents the first empirical attempt to detect the relationship between sales price and listing (or contract) period. Specifically, we examine the relationship between sales price and contract expiration days. Our hypothesized positive relationship between sales price and contract expiration days is borne out by the results of this study. These results show that the home seller is able to exact a price premium of 0.04% per contract day that he/she is able to preserve. Alternatively stated, he/she will concede a price discount of 0.04% per day, on average, as the sales contract approaches its expiration. Simple analyses of time on the market (TOM) without controlling for listing period may yield misleading signals.     

如何成为优秀的市场营销专家(二) ——第一印象的重要

<正> 今天不管你是卖化妆品还是手机,或是更高层次的销售B2B解决方案,都需要面对以下的特别难题和困惑:客户获得的越来越多的信息、激烈的竞争、产品多元化、更长的销售周期、客户更严格的筛选标准,以及要对客户的需要有更多的认识,以提供更高质量的服务。 智越咨询公司为了帮助业务代表面对各种挑战,特地做了一项广泛的研究。这项研究为期9个月,目的在于探讨业务代表成功的因素。我们以各行各业的公司为典型个案进行,范围从制造业到服务业。 这一研究表明:无论你是哪一个行业的业务代表,都需要去满足一些从前没有考虑过的客户提出的重要要求;需要扮演客户的顾问的角色。若希望在今天的销售环境下取得成功,就必须明白客户服务的重要。 在客户所提出的6项重要因素中,尤为重要的是专业知识与形象、你对客户的贡献,以及对客户的关注和指导。在决定客户是否与你达成交易的因素中这三项因素占到77％。 1.专业知识与形象(29％):这一因素包括了这家公司的业务的稳定程度、被认可程度和在业界中是否处于领导地位;也包括个别业务代表的专业知识、对产品供应和竞争情况的了解程度,以及个人实力等。 2.你对客户的贡献(25％):这一因素既包括了销售机构和业务代表所获得的信任,也包括了业务代表为客户解决困难,做客户     

Days on market and home sales

In 2006, Massachusetts adopted a new policy that prohibits home sellers from resetting their properties’ days on market through relisting. Massachusetts homes exposed to the policy change experienced a $16,000 reduction in sale price relative to Rhode Island homes. Slow‐moving homes suffered a greater reduction, but newer listings only had a small increase in sale price. One reason is that some buyers were unaware of sellers’ manipulation of days on market and thus unable to recognize authentically new listings. Sellers reacted to the new policy by cutting listing prices, although in towns where listing price history was transparent, sellers raised listing prices to dampen the stigma of slow sales.     

Short sales constraint and SEO pricing

We examine the influence of SEC's Rule 105 on informed trading and the information content of stock prices around an SEO's offer day. We show that constraints on short sales inhibit informed trading and hamper incorporation of information into stock prices for offers whose traders have private adverse information and without options listing. The constraints contribute to increased price uncertainty and higher market sensitivity to seller-initiated trading. After controlling for other causes of SEO discounts, we find that the decrease in information content of stock prices just before an offer day has a significant impact on the SEO's value discount.     

还是应该用好经济手段--国家开发银行专家委员会副主任王大用谈宏观调控

《银行家》:上半年的各种经济数据陆续出来,从这些数据看,您认为宏观调控已经达到目标了吗? 王大用:从现在的统计数据看,上半年,全社会固定资产投资同比增长28.6％,增速比一季度回落14.4个百分点。6月末,货币供应量增长回落到16.2％,增幅比上月末回落2.4个百分点。这是比较合理的增长,已经不能再低了。     

Short sales and trade classification algorithms

This paper demonstrates that short sales are often misclassified as buyer-initiated by the Lee–Ready and other commonly used trade classification algorithms. This result is due in part to regulations which require that short sales be executed on an uptick or zero-uptick. In addition, while the literature considers “immediacy premiums” in determining trade direction, it ignores the often larger borrowing premiums that short sellers must pay. Since short sales constitute approximately 30% of all trade volume on U.S. exchanges, these results are important to the empirical market microstructure literature, as well as to measures that rely upon trade classification, such as the probability of informed trading (PIN) metric.     

Fire sales and the financial accelerator

During financial turmoil, increases in risk lead to higher default, foreclosure, and fire sales. This paper introduces a costly liquidation process for foreclosed collateral and pro-cyclical recovery rates in a dynamic stochastic general equilibrium model of the financial accelerator. Links between endogenous recovery rates, risk premia, and default risk generate a liquidity spiral, magnifying financial accelerator effects. We illustrate how collateral liquidation and monetary policy alter the real impact of financial shocks operating through macro-financial linkages; and the way a government subsidy on collateral liquidity and required liquidity buffers can help dampen the liquidity spiral by shoring up recovery rates.     

Informed short sales and option introductions

This study examines how the introduction of options affects the level of informed short selling. In particular, we test whether option introductions increases or decreases the level of informed short selling. Our tests are motivated by a theoretical debate in the literature. The first stream of literature argues that introducing options into markets may increase speculative trading which can result in less informed trading when informed traders perceive speculative trades as noise. The second stream argues that introducing options into markets improves the informational environment of the market because option prices provide an additional information mechanism for informed traders. We approximate informed short selling by examining (i) non-exempt short sales, (ii) contrarian short-selling activity, and (iii) the return predictability contained in shorting activity. Results show that non-exempt shorting activity increases after options become available. Further, we show that both the level of contrarian short selling and the return predictability contained in short selling increase after options are listed. Our results suggest that informed short selling increases after options are introduced.     

The double jeopardy of sales promotions

The maturing of most consumer markets in the United States has put great pressure on manufacturers in their search for growth. They have concentrated on building sales and expanding share proportions in the stagnant markets with devices like niche products, product extensions, mergers, and international ventures. They have shifted emphasis to sales promotions at the expense of advertising. But promotions, when you come right down to it, mean price reductions. Trade promotions are almost always rebates, and consumer promotions are usually temporary price reductions or coupons. The cost in reduced profit, demonstrated mathematically through calculations of price elasticity, is severe. Besides, when the promotion is over, the manufacturer has not moved forward an inch in shoring up the brand franchise. Promotions bring volatile demand, whereas the producer seeks stable demand. By sustaining a brand image and building customer loyalty, on the other hand, theme advertising can stabilize demand. Moreover, this type of advertising is less likely than promotion is to invite destructive competitive retaliation. Calculation of the advertising elasticity of a brand indicates that sometimes even modest sales increases can produce healthy profit improvement. In a well-planned marketing campaign, there is often good reason to include trade or consumer promotion--to counter a leading competitor's moves, for example. But there is no point in carrying out wild swings at rivals in a struggle for market share. Mathematical techniques can aid the efficiency of marketing planning and put on a more rational basis the decision on where to put the dollars.     

预防胜于治疗

香港会计师公会专业风险管理委员会正积极指导会计师事务所怎样将专业疏忽索偿风险减到最低,同时游说政府实行更为公平的责任分配制度。从前,因为专业疏忽而成功起诉一家会计师事务所似乎是不太可能。但是,正如所有一厢情愿的想法,这个观点也不断受到质疑,而且不时被推翻。随着美国爆发一连串企业丑闻及因而制订的新法例,会计师所承担的责任变得越来越重大。香港会计师公会专业风险管理委员会(以下简称"专业风险委员会")积极提供的一项会员服务,就是致力于使会员更深入认识专业疏忽索偿的风险、怎样避免这些风险及在未能避免时怎样应付。香…     

Management of frontline financial sales personnel

The employee turnover rate within the financial services industry is one of the highest among all industries. Studies demonstrate that a salesperson’s organizational commitment and propensity to leave are impacted by job satisfaction and emotional exhaustion. This study examines the relationships among emotional exhaustion, organizational commitment, propensity to leave and the facets of job satisfaction. Findings support that: (i) financial services salespeople’s propensity to leave is influenced by emotional exhaustion, (ii) emotional exhaustion is mediated by multi-faceted job satisfaction in predicting organizational commitment and (iii) the facets of job satisfaction are, in part, mediated by organizational commitment in predicting propensity to leave.     

律师与银行家携手法律与金融业共荣--访北京天铎律师事务所主任律师胡维翊

加入世贸组织后,银行业作为由垄断向市场化过渡的行业之一,将面临很大的挑战.其中规则意识的培育和有效利用是保障我国银行业"软着陆"的重要基石.规则运用的直接表征就是法律服务在银行业经营中的地位.为了充分展示法律服务对银行业的重要意义,本刊特采访了北京天铎律师事务所主任律师胡维翊,请这位身具中国和美国法律背景的著名金融法律专家阐述法律服务与金融业的联系.     

The Doctor Knows Better

Aman was hit by a taxi in the street.He was brought to the hospital.
His wife who was standing up by his bed, said to the doctor： ＂I think that he is very ill. ＂