Transitioning from product to service-led growth in manufacturing firms: Emergent challenges in selecting and managing the industrial sales force

Despite the increasing strategic value of service-led growth in competitive and commoditized markets, firms frequently encounter problems orienting their industrial sales forces toward these new organizational objectives. To identify important potential challenges to firms attempting to make the transition to service-led growth, we conducted focus groups and depth interviews with 38 sales executives at goods-dominant business-to-business firms. Our discussion with C-suite managers uncovered four major transition issues, to wit, (1) the magnitude of change at the sales organization level triggered by a service transformation; (2) unique elements of selling hybrid offerings versus industrial goods; (3) the link between these differences and the sales proficiencies required for hybrid offering sales; and (4) potential individual differences among high-performing hybrid offering salespeople, compared with sales reps focused on goods sales. These insights highlight some of the managerial and sales force-level challenges that goods dominant firms will have to address as they attempt to initiate and maintain the transition to a service-led growth strategy.     

Co-production and its effects on service innovation

This study explores the influence of business-to-business (i.e., upstream) co-production on service innovation in the information technology (IT) industry, and examines the antecedents of co-production, based on a survey of sales managers, the seller side of the co-producers, from 157 IT businesses in Taiwan. The findings indicate that co-production positively influences service innovation to a degree that depends on the collaborative partner's compatibility and history of business relations, affective commitment, and expertise. Moreover, the business' innovation orientation enhances (moderates) the relationship between co-production and service innovation. These results have several managerial implications. Businesses should choose co-production partners that are compatible and can contribute toward advancing the relationship. Furthermore, investments in building their innovation orientation will strengthen their efforts in service innovation through co-production.     

The adoption of information technology in the sales force

The purpose of this article is to explain why salespeople adopt information technology. The results from a cross-sectional study of 229 salespeople indicate that putting sales technology to use strongly depends on salespeople's perceptions about the technology enhancing their performance, their personal innovativeness and organizational efforts in terms of user training. Throughout the adoption process companies also need to target sales line managers-next to end users-because salespeople clearly comply with the expectations of their supervisors. Finally, the threat from competing sales professionals or peers who use similar sales technology seems to be of secondary importance for individual sales technology adoption.     

What drives customer Re-engagement? The foundational role of the sales-service interplay in episodic value co-creation

As existing business-to-business value co-creation (VCC) contracts approach their planned expiration, customers evaluate incumbent suppliers when forming their decisions to re-engage or defect. During this late stage of VCC, supplier sales and service personnel perform unique activities to support one another and foster VCC re-engagement. To investigate this sales-service interplay, the authors employ an exploratory inquiry consisting of 115 depth interviews across 63 customer accounts. Interviews were conducted with customers following the decision to re-engage or defect from an incumbent supplier. Findings suggest that sales' efforts to renew the VCC contract depend on tactical insights provided by service. Through their involvement with customers, service holds a tactical perspective that can extract micro-level customer insights. Findings also suggest that service's ability to influence supplier-specific knowledge stores within the customer organization depends on macro-level strategic customer directives that may be shared by sales. Further, service's activation of such knowledge stores moderates the relationship between sales' RFP response and the customer's VCC re-engagement decision. The results have implications for the industrial sales and service fields, since the integration of the sales and service teams is critical for garnering intrafirm knowledge flows that drive recurrent VCC within collaborative customer-supplier relationships.     

How buyer–seller relationship orientation affects adaptation of sales processes to the buying process

Adaptation in sales is common in business relationships. The purpose of this study is to understand how the buyer–seller relationship affects sellers' sales process adaptation to customers' buying processes. The results reveal how the buyer–seller relationship orientation affects sales process adaptation and its effects. The main sources of information in this qualitative inquiry are in-depth, semi-structured interviews with key informants representing a buyer–seller relationship. This study helps to shed light on how the buyer–seller relationship orientation affects sales process adaptation. The findings reveal that both the buyer and the seller have an impact on sales process adaptation. Extant research has recognized adaptation as a central aspect in relationships, while largely neglecting sales process adaptation. Thus, this study focuses on the effects of buyer–seller relationship orientation on sales process adaptation.     

Organizational innovativeness and firm performance: Does sales management matter?

Salespeople interact with individual customers to drive revenues by identifying and finding solutions for customer needs. The external knowledge salespeople acquire in conjunction with the network position they hold in their firm suggests that the sales force has great value in facilitating organizational innovativeness. Sales managers set the tone for sales operations, and an intellectually stimulating sales manager can create ripple effects of innovative thinking across the sales force and organization. In this paper, we propose that sales manager intellectual stimulation helps drive organizational innovativeness and, in turn, sales growth. Survey data collected from a cross-industry sample of business-to-business sales leaders are linked to an objective measure of firm sales growth. The results indicate that sales manager intellectual stimulation leads to organizational innovativeness. They also suggest that the degree to which the sales department is integrated within the firm strengthens this positive relationship. Finally, the relationship between organizational innovativeness and sales growth follows a non-linear U shape.     

The effects of sales supervisor relationships on work meaning: The case of Canadian and Chinese salespersons

Although the meaning of work—an individual's understanding of the purpose and significance of his or her work—is often discussed, the issue of how to enrich the meaning of work for salespeople remains poorly understood. This study examines the role of sales manager-salesperson relationships in the development of work meaning in a cross-cultural context. To better understand how work meaning might differ in Eastern (collectivist) and Western (individualist) cultures, data were gathered from salespersons in the Chinese and Canadian telecommunications industries. Findings suggest that the development of work meaning among Canadian salespeople is ascribed to the perceptions of customer orientation and self-determination. Conversely, in China, a quality relationship with one's sales supervisor is a direct factor in the development of work meaning. Managers of global sales forces should carefully consider the cultural differences of their salespersons and how a close personal relationship can impact the understanding of the purpose and significance of work for their sales team. After discussing the findings, managerial implications and suggestions for future research are offered.     

Purchasing-driven sales: Matching sales strategies to the evolution of the purchasing function

The personal selling field has witnessed the emergence of various sales strategies, including relationship, value, key account, and solution selling. Despite claims about their effectiveness, recent work challenges the relevance of existing sales strategies across buying contexts. Specifically, emerging sales strategies often focus on the user in the customer organization, without being explicitly aligned with the increasingly important purchasing function. To define the critical role of the purchasing function for sales effectiveness, this study collects data from 32 firms in two markets; their purchasing departments reveal four stages of purchasing evolution: passive (price focused), independent (cost-focused), supportive (solution/innovation focused), and integrative (strategy focused). The research demonstrates that each stage of purchasing evolution then requires distinct sales strategies by selling firms and any mismatch of purchasing evolution and sales strategy may be detrimental to sales. This novel view and the supported findings offers several implications for both research and practice.     

The Role of Sales in NPD: An Investigation of the U.S. Health‐Care Industry

The new product development (NPD) literature emphasizes that the success of new products strongly depends on a firm's capability to understand customer needs and translate them into new products. Because of their close relationships with customers, salespeople are in the ideal position to connect the firm's NPD efforts to its customers. The extant literature on the role of sales in NPD focuses on either sales’ contribution to generating new product ideas or the adoption of new products by salespeople, while a systematic study of sales’ contribution during all NPD stages is lacking. In addition, the role of sales is typically studied in isolation, while in practice, the role of sales depends on the relationship between sales and marketing. This article addresses these gaps in the literature by reporting on an empirical investigation of the role of sales during the entire NPD process in the U.S. health‐care industry, taking into account the complexities of the sales‐marketing dynamic. The article is based on interviews with 21 sales and 15 marketing informants from the U.S. health‐care industry, both pharmaceutical firms (selling drugs to physicians) and device manufacturing firms. Our findings highlight how salespeople are distant from NPD process during the discovery stage. Salespeople are focused on selling to customers, and marketing keeps sales distant from the NPD process. During the development stage, sales is still only indirectly involved in NPD through its relationship with marketing. During commercialization, however, marketing takes the driver's seat and strongly involves sales in the various (pre)launch activities. But while salespeople are mostly indirectly involved in NPD, sales managers have a closer relationship with sales and are more directly involved. The findings also show how the involvement of sales is influenced by characteristics of the health‐care industry. Thus, this article contributes to our understanding of the role of sales in NPD by integrating theoretical perspectives from the sales‐marketing interface literature into the NPD literature.     

Industrial sales management: A case for MBO

The system of management by objectives (MBO) is a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual's major area of responsibility in terms of the results expected of him, and use these measures as guides for operating the firm and assessing the contribution of each of its members (Odiorine, 1965; Mali, 1972; Reddin, 1971; and Carroll and Tosi, 1973). Those who manage by objectives place primary emphasis on direction of efforts, and the evaluation of results (Varney, 1972).Etzel and Ivancevich (1974) have indicated several areas in marketing which can benefit from the MBO procedure, including sales management, advertising, market research, new product development, and physical distribution. This article focuses on one of these areas-sales management. The unique characteristics and activities of salesmen and sales managers demand a flexible tool of evaluation; one that can operate within a system that does not permit close “on the job” supervision. The procedures of MBO offer an evaluation blend that is well tailored to this type of situation.This article has three objectives. First, some of the specific problems and needs of industrial sales management are examined. Second, suggested MBO procedures for industrial sales management are outlined. Finally, a discussion on how MBO can operationally deal with the problems and needs of industrial sales management are presented.     

Organizational variables, sales force perceptions of readiness for change, learning, and performance among boundary-spanning teams: A conceptual framework and propositions for research

Sales organizations are continuously developing new ideas and approaches to be more competitive. One of the approaches taken by most successful organizations is the move from individuals to boundary-spanning, cross-functional teams. Sales teams are being employed to counter efforts by buying organizations to form buying centers. It is proffered in this paper that organizations that are ready for change are conducive to enhancement of sales team learning. Organization readiness for change is a condition impacted by a variety of organizational antecedent variables such as culture and climate. This paper proposes that sales team learning is impacted by team members' perceptions of the organization's readiness for change. In addition, we also posit the moderating influence of two environmental variables: turbulence and competitive intensity on the relationship between readiness for change and sales team learning. Sales team learning is then proposed to be related to a variety of sales outcomes. In this paper, we present a conceptual framework for understanding the contexts in which team learning occurs and the impact of team learning on team effectiveness. Throughout the paper, we present research propositions that provide opportunities for future examinations of team learning.     

A multidimensional perspective of business-to-business sales success: A meta-analytic review

The role and nature of business-to-business (B2B) sales has evolved since the end of the 20th century, mostly driven by technological, organizational and social changes. However, the literature has yet to catch up with that evolution. Particularly, the literature lacks contemporary studies that exclusively showcase the key determinants and practices that facilitate the success of B2B sales. Hence, we conduct a meta-analysis of the literature and summarize the results of 139 independent published studies from 1980 to 2019 that examined the relationship between several determinants and B2B sales success. Our results show that such success may be influenced by 31 different determinants associated with four dimensions of the selling process (i.e., salesperson, organization, customer, and environment). We also investigate the moderator effects of measurement source (subjective vs. objective), measurement items (single vs. multiple), industry context (goods vs. services), number of industries (single vs. multiple), sales function (inside sales vs. outside sales) and year of publication (before 2010 vs after 2010) between several determinants and B2B sales success. Our findings convey important implications for theory and practice on the key determinants of B2B sales success, as well as the conditions on which each determinant is effective. We also provide recommendations for further research on B2B sales success.     

AN EMPIRICAL TEST OF THE RESOURCE-BASED THEORY: STRATEGIC REGULATION IN THE DUTCH AUDIT INDUSTRY

The resource-based view of the firm is a recent strategic management theory that seeks to identify the resources that may provide firms with a sustainable competitive advantage. This paper has two purposes. First, the paper relates strategic management arguments to parallel lines of reasoning in industrial organization theory and argues that strategic regulation is a major source of sustainable competitive advantage. The second purpose of the paper is to report the results of an empirical test of the resource-based theory on the basis of a longitudinal data set on the postwar history of the Dutch audit industry. A key determinant of this history proves to be strategic regulation, which stimulates demand for audit services and protects rent-producing resources.     

Forecasting Sales of New Contingent Products: An Application to the Compact Disc Market

Estimating the sales potential of new products before an actual launch is a major problem confronting marketing and new products managers. Several modeling efforts for both new durable products and consumer package goods have been reported. An area which has received little explicit treatment, however, is that of new contingent product sales. A specific case of such products is the close relationship between software (consumables or accessory items subject to repeat purchase), and hardware (the original durable good required for use of the software). Examples of this relationship include video cassette recorders and VCR tapes; microcomputers and floppy diskettes; and cameras and photographic film. In this article Barry Bayus discusses a practical method for estimating hardware and software sales of such products. Effects due to different market segment behaviors, pricing, awareness levels, and purchase intentions are incorporated into the model. Results from a study of the compact disc prerecorded audio market by RCAlAriola are presented in order to illustrate how the model can be applied and how the results are useful in making managerial decisions.     

Changes in sales call frequency: A longitudinal examination of the consequences in the supplier-customer relationship

Sales calls are one of the most valuable and expensive resources available to industrial sales managers. The main purpose of this research was to look at the relationship between an increase in sales call frequency and some important outcomes in the buyer-seller relationship. To do so, we adopted a longitudinal research design where data from 357 customers of one industrial supplier were obtained over a two-year period of time. Results indicated that an increase in call frequency has a positive effect on sales volume, perceived service quality, perceived value for money and overall customer satisfaction. Furthermore, these effects tend to diminish as relationships become longer, and are stronger at higher levels of hierarchy in the buying company.     

Sales force reactions to corporate social responsibility: Attributions, outcomes, and the mediating role of organizational trust

Corporate social responsibility (CSR) is gaining momentum among researchers and practitioners. In spite of this extensive interest, systematic research regarding the effects of CSR on other stakeholder groups, besides consumers, remains sparse. Based on a field study in a global Fortune 500 consumer packaged goods company, we examine sales force attitudinal and behavioral outcomes of company's partnership with a United Nations (UN) philanthropic organization. Specifically, we seek to examine whether sales force perceptions of CSR motives influence their evaluation of CSR actions. Findings indicate that egoistic-driven motives negatively influence salesperson trust in the company, whereas stakeholder- and values-driven motives positively influence salesperson trust; however, strategic-driven attributions do not have an influence on salesperson trust. The results further reveal the mediating role of trust in the relationship between sales force attributions and outcomes including loyalty intentions and positive word-of-mouth.     

Sales management control level and competencies: Antecedents and consequences

The pursuit of superior salesperson performance and higher levels of sales organization effectiveness is a growing management priority. Management control is an important antecedent to several aspects of salesperson performance and organizational effectiveness. However, prior research has neglected two important issues. First, the impact of market orientation on sales manager control approaches has not been previously considered. Second, sales manager competencies in behavior-based control have not been examined, as research has focused on the level and form of control. Market orientation and the critical sales skills required of salespeople have strong antecedent relationships with sales manager control. Also, sales manager control competencies play a significant role in shaping salesperson performance, and the impact of control competencies is larger than control level. Sales manager control competencies play an important mediating role between sales manager control level and salesperson performance and sales organization effectiveness. Our findings are based on a study of British companies in which five hundred sales managers were sent surveys and 300 usable responses (a response rate of 60%) were returned. Three important implications derived from this study include: (1) sales managers need to translate market orientation into sales force behaviors; (2) control strategy should be aligned with sales force priorities; and (3) time and resources should be invested in training sales managers.     

考虑可持续性设计的闭环供应链差异定价研究

为了解决回收产品再制造成本增加甚至难以进行再制造的难题,制造商在产品生产的前期就要考虑后期再制造活动的可实施性,即考虑可持续性设计。在考虑可持续性设计情况下,本文针对由一个制造商和一个经销商构成的两级闭环供应链系统,分别建立经销商从事再制造和制造商从事再制造两种模式下的差异定价模型,得到了相应的最优定价策略,并主要针对可持续性努力程度,讨论其与各个最优决策变量、产品单位成本及可持续性努力程度系数之间的关系。研究给出了可持续性努力程度分别对新产品和再制造产品的最优中间价、最优销售价、最优销售量及最优利润的影响,同时论证了新产品和再制造产品的单位成本及其可持续性努力程度系数分别对可持续性努力程度的影响,并对经销商从事再制造和零售商从事再制造两种模式进行了对比分析。     

The development of consulting in goods-based companies

The article focuses on the developments in several B2B companies which traditionally produce goods and based on this experience are trying to enter the business of management consulting. It is the aim of the paper to identify the specific challenges that these companies are facing regarding marketing and selling their management consulting services. Furthermore hypotheses are developed that should give direction how to overcome those challenges successfully. Due to the lack of current research results, an explorative case study approach is chosen referring to two companies from the IT industry having gained relevant experience in this business area. In addition, theoretical frameworks demonstrate the plausibility of the hypotheses developed. If further research supports these hypotheses, it will have significant impact on the market strategy, marketing communication and sales organization of companies going to increase their consulting services.     

Linking authentic leadership to salespeople's service performance: The roles of job crafting and human resource flexibility

To build the sustainable service excellence, organizations should fuel sales employees’ drive to serve customers and recover service failures to their utmost satisfaction. The primary aim of our study is to delve into the role of authentic leadership in fostering customer-oriented organizational citizenship behavior (OCB) and service recovery performance among sales employees. Respondents for our surveys comprised employees and managers from sales departments of pharmaceutical companies in Vietnam. The data analyses justified the positive relationships between authentic leadership and customer-oriented OCB as well as service recovery performance in a business to business (B2B) context. Job crafting served as a mediator for the links between authentic leadership and customer-oriented OCB as well as service recovery performance. Furthermore, human resource (HR) flexibility was found to play a moderating role for the effect of authentic leadership on job crafting among sales employees.