The embedded sales force: Connecting buying and selling organizations
- First Online:
- Cite this article as:
- Bradford, K., Brown, S., Ganesan, S. et al. Mark Lett (2010) 21: 239. doi:10.1007/s11002-010-9106-1
- 456 Views
Business-to-business firms are increasingly focusing on building long-term partnering relationships with key customers. Salespeople are often responsible for managing these relationships. To be effective as relationship managers, salespeople need to be embedded in both their firm’s and customers’ organizations. They need to have extensive knowledge of their customers’ business and also know and be able to leverage their firm’s resources to develop offerings tailored to their customers’ needs. Their companies and sales managers need to use different approaches to manage and support salespeople in this new role. In this paper, we examine some issues affecting the interfaces between elements of the embedded sales force and suggest some directions for future research and methods for examining these issues.
The role of the sales force and salespeople in business-to-business (B-to-B) firms is changing. In response to increasing consolidation and globalization of their customers, increasing commoditization of products, and expanding levels of service offerings, many B-to-B firms are becoming more customer centric and adopting a relationship marketing perspective. They are focusing their efforts on developing long-term partnering relationships with their best and most promising customers rather than broadening their customer base with more transactional relationships (Weitz and Bradford 1999; Jones et al. 2005a).1
In addition, the growth and use of services to differentiate a firm’s product offering are enhancing the role of salespeople. As service providers, salespeople are often responsible for identifying service opportunities, coordinating the delivery of these services (Sheth and Sharma 2008) and developing customized solutions for their business customers (Tuli et al. 2007). For most B-to-B product organizations, it is the sales force that represents the service component of the seller’s offering, and thus, salespeople afford firms the opportunity to use sales-service differentiation strategies (Hunter and Perreault 2007). In fact, goods-dominant firms, such as IBM and Procter and Gamble who pioneered many relationship marketing practices, have been so service centric for decades that their consultative sales efforts not only dominate modern marketing budgets but also account for significant returns on investments in effective sales-service differentiation strategies.
Services have greater variability and are harder to evaluate even though they offer more opportunities for customization than products. Stronger seller–customer relationships help customers mitigate the higher level of performance risk associated with services, as compared to product offerings (Palmatier 2008).
Thus, firm’s sales force plays a critical role in implementing this emerging relationship marketing perspective and dealing with the growing importance of such services. Since salespeople span the boundary between the firm and its customers, they are responsible for developing, maintaining, and expanding these customer relationships. Moreover, offerings with a significant service component require greater coordination between sellers and buyers and often require coproduction, which increases the amount of buyer–seller interaction. “Lone wolf” salespeople (Dixon et al. 2003) scouring their territories for orders are being replaced by relationship managers—salespeople who are responsible for marshaling and coordinating their firm’s resources to provide innovative offerings with long-term implications for their customers and their firms.
To be effective as relationship managers, salespeople need to be an integral part of both buying and selling organizations. They need to be intimately involved in the business practices of both firms by having a deep and thorough understanding of both their firm’s and customers’ needs, resources, and capabilities and the roles of different functions and individuals within these organizations. This new role suggests an evolution toward an embedded sales force. An embedded sales force is one that integrates on a regular basis with both its own organizational subunits as well as the customers’ subunits for the purpose of creating customized products and services for its customers.
Not only does an embedded role facilitate greater and better quality social connectedness, it facilitates economic connectedness. These benefits also extend to political connectedness lowering the chances that political alliances thwart a good relationship, fostering shared cultural norms, and leading to the development of similar cognitive styles (Krippner et al. 2004).
Chen (2008) argues that embedded organizations serve not only to create explicit knowledge but also to create tacit knowledge. Even more provocative is the suggestion by Maio et al. (2008) that an embedded structure facilitates forgiveness: relationship repair and maintenance. Thus, we contend that effective relationship managers must become embedded in both their organization and their customers’ organization.
The four concentric and overlapping circles in Fig. 1 represent the polycentric embedded sales force located at the intersection of their firm’s sales organization, the buying organization, and other relevant functional organizations within the sales firm. The purpose and contribution of this paper is to identify potential areas of research that may help us better understand the role of and what factors contribute to the effectiveness of salespeople embedded in the buying and selling organizations. In the following sections which parallel the interfaces depicted in Fig. 1, we pose research questions and discuss previous research related to the questions.
2 Customer–salesperson interface
To manage customer relationships in a business-to-consumer (B-to-C) context, firms typically collect and analyze the past purchase behaviors of customers. They develop general rules identifying their best and most promising customers and develop promotions directed toward these customer segments. However, in a B-to-B context, salespeople personally develop and manage each customer relationships. B-to-B firms, through their salespeople, go beyond offering “personalized” promotions to create customized solutions specific to each B-to-B customer’s unique opportunities.
While there has been considerable research on the knowledge, skills, and abilities (KSAs) related to the effectiveness of salespeople in their transactional relationship management roles, the research on the KSAs needed to be effective in this emerging relationship management role is limited.
Q1: What are the KSAs needed to be an effective salesperson in a partnering relationship management role?
2.1 Relationship orientation
Bradford et al. (2008a) propose that salespeople with a relationship orientation will be more effective at managing these partnering relationships. Relationship orientation is defined as relatively stable, predisposition to value and build close relationships with others. Based on prior research (Brewer and Chen 2007) and interviews with salespeople, they identify four dimensions of relationship orientation: (1) the inclusion of others as part of one’s self-identity, (2) the view that one needs to work with others such as customers and colleagues to accomplish tasks, (3) a belief that working with others is intrinsically rewarding, and (4) a norm for being with and concerned for others. Bradford et al. (2008a) propose that salespeople who are relationship-oriented and possess skills and knowledge (such as emotional intelligence) to manage relationships will be particularly effective at building relationships with key accounts, leading and working on sales teams, and getting the support of colleagues within their firms. However, the Bradford et al. (2008a) proposal is yet to be tested.
2.2 Tacit knowledge
Tacit knowledge is an uncodified, how-to knowledge that people typically learn through experience. In a sales context, it provides the know-how for managing oneself and others (customers, peers, and supervisors). Tacit knowledge is considered more valuable than explicit knowledge because it provides context for understanding people, places, ideas, and experiences. Tacit knowledge can be characterized as being either global, abstract and overarching, or local, relating to an immediate concern. Research suggests that global tacit knowledge because it is more abstract is more valuable than local tacit knowledge (Wagner et al. 1999). Polycentric salespeople embedded in many functional areas of their firm and their customers’ firms are more likely to acquire global tacit knowledge compared to unicentric (embedded in one organization’s functional area) salespeople. Thus, embeddedness should increase the quality of tacit knowledge salespeople have and their subsequent effectiveness. Research has not explored the extent to which this is the case or what the optimal balance between global and local knowledge should be for relationship managers.
2.3 Emotion management
Emotions play an important role in the development of trust and continuity of relationships (McKnight et al. 1998). Thus, relationship managers need to have high emotional intelligence—they need to be effective in perceiving and managing their emotions and the emotions of their customers.
Palmatier et al. (2009) examine the effects of one emotion, gratitude (the feeling of thankfulness and appreciation) in building relationships. This research finds that gratitude in response to relationship-specific investments builds trust, commitment, and reciprocity and leads to higher purchase intentions in a B-to-C context and long-term sales growth in a B-to-B context.
Finally, as salespeople are embedded within their own and their customers’ organizations, they are bound to experience frustrations arising from the different goals and responsiveness from the embedded layers. The effectiveness of the embedded sales force can be improved by understanding the impact of these emotions and how salespeople cope effectively with them (e.g., Brown et al. 2005; Nonis and Sager 2003; Dixon et al. 2001). It can also be improved through understanding how customers respond to salespeople’s expressions of gratitude, frustration, and other emotions.
2.4 Creative value generation
A third KSA needed for effective relationship management is creativity—the ability to develop novel and useful approaches for creating value for the salesperson’s customers, as well as its firm. Traditional salespeople are usually more constrained to use existing products and services to solve customer problems, while relationship managers have the opportunity to tailor services and products to develop creative, win–win solutions. Three conditions that foster creativity in these relationship managers are (1) an extensive knowledge about the customer and the capabilities of their firm, (2) an intrinsic motivation that stimulates a drive for mastery and a learning orientation to develop these integrative solutions, and (3) managerial practices that facilitate creative thinking among relationship managers such as management open mindedness toward new ideas and tolerance for failures (Amabile et al. 1996).
3 Salesperson–sales team interface
Traditionally, the personal selling literature has focused on individual salespeople performing selling tasks. In response to the interest in building long-term customer relationships and the increased complexity of tailoring the products and services offered, firms are using formal and/or ad hoc sales teams to more effectively manage customer relationships. These sales teams enable firms to develop multiple, cross-level, and cross-functional ties with customers and draw on diverse knowledge bases of team members to foster innovations and work effectively with their counterparts in the firm. Thus salespeople, in a relationship management role, must be effective team leaders (Jones et al. 2005a; b).
Q2: What are the unique factors affecting the performance of sales teams and how can relationship managers improve sales team performance?
3.1 Team composition
One interesting area for research is team composition—the diversity of individual team member characteristics. The different knowledge bases in diverse team can increase the likelihood of developing innovative approaches, but it can also lead to communication problems and dysfunctional conflict. Management practices such as organizational climate, leadership approach, and compensation can heighten the benefits and reduce the dysfunctional aspects of team diversity.
Diversity can involve surface-level characteristic—characteristics such as gender and age—or deep-level characteristics such as values and abilities. Studies suggest that deep-level characteristics may be more directly related to team performance (e.g., Bell 2007). Christian et al. (2008) examine the impact of performance and learning goal orientation (LGO) diversity (constructs that indicate deep-level characteristics) on team performance. Team members with a LGO focus on mastery. They have an internal desire to learn and develop their skills. Team members with a performance goal orientation (PGO) are motivated to avoid failure and gain favorable evaluations. Christian et al. (2008) propose that variance in LGO and PGO reflects differences in how team members cognitively frame tasks and affects team performance differentially over time. They find that teams with low variance in LGO and PGO perform better over time while high variance teams perform worse over time.
With regard to many personal characteristics, such as technical product expertise, presentation skills, negotiation skills, financial expertise, we know very little about optimal combination of characteristics or what should be the determinants of team composition. For example, what role should the selling task play in this decision, and how does the customer’s buying task or buying center affect management’s choices?
3.2 Team structure
An important consideration is the size of the team. One might expect that as team size gets bigger, that the effectiveness of the team would increase due to the breadth of knowledge and skills. On the other hand as the team size increases, we would also expect that communication and coordination would become more difficult. Several studies have suggested inconsistencies in the relationship between size and effectiveness (Perry et al. 1999). In addition to size, proximity between team members and how they are connected (virtually or face to face) affect the effectiveness of the team. Yet, little has been done to explore the impact this characteristic has on team performance in a sales team context.
3.3 Management of team processes
Because teams by definition involved multiple participants with diverse backgrounds, needs, and perspectives, there are bound to be communication problems and conflict among the members of the team at various times. Researchers have explored types and causes of team conflict (Jehn 1997), as well as how to manage conflict (De Dreu et al. 2001).
One consistent conclusion in the literature is that certain types and amounts of conflict are positively related to the performance of the team. However, most of the research on interorganizational conflict has come from the management literature. It is not clear if the same processes and outcomes can be related to relationship management teams because unlike other organizational teams, the performance of sales teams is directly tied to the team’s successful relationship with an external stakeholder, the customer. In addition to the need for further exploration of conflict and its management within sales teams, there has been little work in the areas of motivation and evaluation of team performance.
4 Salesperson/sales team—sales management interface
Q3: How can sales management support the activities of relationship managers and what are the unique aspects of managing salespeople in this role?
4.1 Supporting the relationship managers
With salespeople in embedded roles that link internal associates possessing a range of functional expertise with elements of the buying organization, firms can achieve competitive advantage through information technology applications. In some cases, technology itself can connect buying and selling organizations without interpersonal communications, as is the case with online reverse auctions (Jap 2003). In other cases, information technology does not displace salespeople but instead provides salespeople with tools that may facilitate or enable the performance of sales tasks. In either case, sales technology alters the industry’s competitive dynamics by elevating buyer expectations and can create an imperative for their competitors. In information-intensive industries, such as consumer packaged goods (CPG), sales technology is a necessary component for competing on analytics. To develop solutions for their retail business customers, CPG sales forces use proprietary sales technology tools based on sophisticated scanner data models provided by information vendors like IRI and Nielsen.
Firms are increasingly exploring the use of sales technologies to support the activities of salespeople. Sales technologies, defined as information technologies that can facilitate or enable the performance of sales tasks, help salespeople learn and adapt faster to an increasingly complex and changing environment, thereby enhancing their performance (Hunter and Perreault 2006). Sales technology can provide salespeople with better access to information, more advanced analytical capacity, and/or more effective or efficient communications (Hunter and Perreault 2007). Thus, sales technology is to modern selling what weaponry always has been to military warfare (a complex and necessary expense that differentiates competitive sales forces)—and a sales organization that ignores the effects of sales technology, either within its firm or across sales firms in its industry, does so at peril of its own potential. However, the adoption of these technologies by salespeople and realization of returns on a firm’s investment in sales technology portfolios has been problematic (Hunter and Perreault 2007) as the integration of salespeople, processes, and technology is both complex and costly.
While marketing scholarship has invested a great deal into understanding innovation in offerings, both goods and services, little research has explored how salespeople respond to such innovations. The extant sales technology literature considers how an individual’s sales technology orientation—the predisposition of salespeople to adopt sales technologies (Hunter and Perreault 2006)—influences one of the most dominant process model paradigms in sales practice and literature, namely the processes of working harder and working smarter (Sujan et al. 1994). However, more research is needed on how salespeople embedded in relationship marketing organizations respond to and incorporate technology into their work processes. For example, little is known about the underlying psychological mechanisms associated with salespeople’s response to such innovations and how they may contribute to technology-laden efforts intended to achieve competitive advantage. Hunter and Panagopoulos (2008) propose and test a theoretical model examining some psychological mechanisms (commitment to and coping with change) that affect sales technology infusion (Jones et al. 2002) and subsequent performance. Their model also proposes that the customer centricity of the firm, a condition characteristic of a seller’s relationship marketing orientation, moderates the effects between the psychological mechanisms and sales technology infusion as well as those between sales technology infusion and performance. In essence, sales technology represents a complexity that modern sales managers cannot ignore when designing, implementing, or evaluating the effectiveness or efficiency of an embedded sales force—and the current literature affords ample opportunity for new insights on how sales technology influences sales processes and salespeople working as members of an embedded sales force. This leads us to consider two more specific questions: What are the ways and means through which sales technology improve or hinder an embedded sales force’s performance of its organizational linking efforts, and how do sales technology successes diffuse throughout industries?
4.2 Management of relationship managers
Sales management tasks include motivating, evaluating, and controlling salespeople. The sales management literature makes a distinction between input and output control systems (Anderson and Oliver 1987; Anderson and Onyemah 2006; Challagalla and Shervani 1996; Onyemah and Anderson 2009). Input control systems are based on managing and evaluating the activities undertaken by salespeople (e.g., number of calls made) while output control systems are based on outcomes of sales activities (e.g., sales made). For traditional salespeople involved in transactional relationships, the inputs and outputs are strongly related with each other, more sales calls results in more sales, and thus performance evaluations based on sales generated provides for an effective control system.
However, the objective of salespeople in a relationship manager role is more complex. The goal of relationship managers is to build value in the relationship over the long-term, not just make short-term sales. Thus, control systems for relationship managers need to be based on inputs and outputs related to the quality of customer relationships, the customer’s trust and commitment in the relationship manager and their companies. For example, Palmatier et al. (2006) found that B-to-B salespeople were more effective at utilizing their firm’s relational investments when the salesperson had some ownership or profit sharing interest in their firm.
Onyemah (2008) identifies eight dimensions for assessing the degree to which a control system can be characterized as inputs or outputs: the nature of the performance criteria, the number of performance criteria, the degree of management intervention, amount of contact with management, monitoring, coaching, transparency of evaluation criteria, and the use of incentive compensation. In an extensive empirical study, he finds that firms typically use a mix of both input and output control mechanisms that can sometimes be inconsistent. While this inconsistency has a negative main effect on the performance of salespeople, the relationship between inconsistency and performance becomes positive when salespeople are provided with adequate support from their sales managers. That is, support from their supervisors is critical for salespeople managing relationships.
Amabile et al. (1996) suggest that often times the control systems adopted by supervisors can impede rather than facilitate the motivation of subordinates such as salespeople. They identify some of these organizational impediments as a resistance to change, internal politics, and overly complex rules. Sujan and Kacker (2008) suggest that tacit knowledge enables salespeople to overcome these impediments and stay motivated. Their tacit knowledge results in salespeople viewing obstacles as challenges rather than threats (Csikszentmihalyi 1997). Polycentric, embedded employees have more opportunities to develop tacit knowledge (Chen 2008).
Thus, research points to the importance of control and support systems in directing and motivating salespeople, but there remain significant gaps and inconsistencies in terms of what type of organizational control and support best serves the relationship manager. The ability of salespeople to cope with less than ideal control systems and poor support is also an important area of future research.
5 Salesperson/sales management—marketing and other organization functions interface
Q5: What impedes cooperation between marketing and sales and what can firm do to improve the cooperation?
Effective coordination between all of the functional areas with diverse competences and mind sets provides salespeople with a better opportunity to manage their customer relationships. This interface involves two activities: (1) the relationship manager garnering and coordinating support from sales management and other functional areas in the firm (a skill referred to as intrapreneurship by Sengupta et al. 2000), and (2) the firm supporting the activities of the relationship managers.
Q6: What are the activities in which relationship managers engage to secure solutions for their customer firms and how can selling firms support this value-creating role?
5.1 Sales/marketing interface
A major impediment to coordinating activities across the sales and marketing functional areas is that employees in the functions have different mindsets—different perspectives on issues and approaches for addressing problems (Homburg and Jensen 2007). Some of the mindset differences between sales and marketing employees are customer versus product orientation, personal relationships versus analysis, field versus office, results versus process, and short-term versus long-term orientation. The counterproductive aspects of these differences can be reduced by organizational policies and processes such as improved communications, job rotation, integrated goals, organizational culture, and incentives or reward and recognition systems (Rouziès et al. 2005).
Rouziès et al. (2008) explore another approach for increasing cooperation—building social capital embedded in marketing and sales interactions. They empirically examine the processes for building social capital between sales and marketing. Building on Oh et al. (2006), they propose a social capital model where both closure (i.e., strong, cohesive, dense networks in a closed group) and brokerage (i.e., bridges with unconnected groups or boundary spanning) mechanisms influence the marketing and sales interface, thereby creating higher levels of performance.
Their approach suggests that firms can generate value from the social capital underlying marketing and sales relations in part by resolving the tension between density of relationships within their group and connections to other groups. Their results also suggest which types of marketing and sales interface are most effective.
Coordinating marketing and sales functions is particularly important for successfully launching new products. While the marketing department plays a major role in the development of new products, the success of new product launches often depends on the sales force’s ability to communicate the benefits of the new product to customers.
Brown et al. (2008) examine the effects of different managerial influence tactics (informational, promotional, and normative) and the role frontline sales managers play in the success of new product launch. Their model and empirical results indicate that the influence tactics used by marketing managers affect the influence tactics used by sales management which affect the intentions of salespeople to devote effort to selling the new product and the subsequent success of the new product launch. In addition, the relationship between the salesperson’s intentions and the success of the launch is moderated by the frontline sales manager’s commitment. Thus, frontline sales managers are important gatekeepers in successful new product launches.
5.2 Intrafirm influence activities of relationship managers
Three processes, referred to as Salesperson Navigation (SpN), engaged in by salespeople to leverage the internal resources of their companies are (1) exploratory navigation, (2) task-driven navigation, and (3) influence (Plouffe and Barclay 2007). Exploratory navigation is the development by relationship managers of a generalized understanding of their own organization, its capabilities, and its resources. Task-driven navigation is the identification of resources and capabilities specific to the customer situation. Finally, influence involves the use of selling tactics within the company to garner support—an activity also referred to as internal selling.
While several authors have studied employee use of intraorganizational influence strategies, such as expertise, bargaining, and friendliness on salary determination, evaluation and stress (Kipinis and Schmidt 1988), or the determinants of intraorganizational influence use (Porter et al. 2003), limited research has examined the use of intraorganizational influence strategies by salespeople in within the context of internal selling.
Two characteristics of relationship managers that affect their ability to access the resources of their firms are (1) knowledge and (2) political skills (Ferris et al. 2005). Explicit and tacit knowledge of the firm’s capabilities provides relationship managers with information about opportunities for intrapreneurship. Relationship managers with political skills are effective at getting cooperation from employees who can provide the needed support. What other skills are effective in gaining internal cooperation? These ideas are in need of development and testing.
5.3 Facilitating internal support for relationship managers
Bradford et al. (2008b) present a conceptual framework outlining the organizational and individual factors that enable relationship managers to gain internal support. Two organizational factors affecting the support provided to relationship managers are the firm’s organizational culture and the formalization of selling center role. In firms with customer-centric organizational cultures, norms motivate employees to support the activities of salespeople in their efforts to manage customer relationship more effectively. The support can also be provided by identifying selling center members and formalizing their supporting role. This framework is a step to better understand effective internal selling by relationship managers.
The embedded role of salespeople as relationship managers raises a new set of questions and issues meriting further research on the KSAs needed for effective relationship managers and on the potential impact of activities undertaken by various functional areas in a firm on the effectiveness of relationship managers. In addition, the substantive research issues presented in this paper suggests an opportunity for the use of new research approaches.
We recognized that firms have a portfolio of partnering and transactional relationship customers. While transactional relationships may dominate a firm’s portfolio, we focus this paper on the relational exchanges because they are under researched and typically offer the most opportunities for gaining competitive advantage.
In the sales research literature, these relationship managers may be referred to as key account manager (KAM) and national account managers (NAM). However, the responsibilities of KAMs and NAMs can in some situations be restricted to coordinating the activities of salespeople calling on a customer with multiple locations rather than developing a strategic relationship with a customer (Workman et al. 2003). Most of the KAM research focuses on the responsibilities of KAMs, not on the skills and support they need to be effective.