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The Effect of Sales People, Processes, and Provisions on Performance: The 4P-Sales Management Model

Part of the Developments in Marketing Science: Proceedings of the Academy of Marketing Science book series (DMSPAMS)

Abstract

In this paper the authors develop and empirically test a comprehensive 4-P Sales Management Model. The model simultaneously considers the affect sales People, sales Processes and sales Provisions (how the firm equips sales representatives, in this case technology support, specifically CRM) have on firm Performance. By simultaneously examining the relative effect these various characteristics have on firm performance this research presents a holistic approach to understanding the antecedents of sales performance. The development of the 4-P Sales Management Model offers important theoretical and substantive contributions. A brief overview of the model is outlined here.

Salespeople play a pivotal role in shaping the ongoing relationships between firms. The sales force creates relational benefits that transcend the exchange content of a single transaction by providing solutions that save time and create greater convenience to the customer. Salespeople also share their expertise and knowledge which increases the competency of customer decision-making. A salesperson needs to be competent across a variety of tasks and situations. They must work as the customer’s agent in the selling firm, find workarounds, solve problems, and create smooth exchange pathways between firms (Doney and Canon 1997; Peterson and Lucas 2001). Through these value-added activities, salespeople create customer loyalty for the firm (Palmatier, Scheer, and Steenkamp 2007; Reichheld and Teal 1997). It is proposed here that firms will experience greater performance when management engages and works to develop its sales force.

Process-oriented approaches advocate a conscious management of the relationship development by establishing process-dependent measures and criteria. This view calls for deployment of defined processes for creation and maintenance of relationships with the buying firm that transcend the individual salesperson. Relationship creation processes is defined here as the institutionalized mechanisms firm deploy to develop relationships with new prospects. Relationship management processes is defined here as the mechanisms firms deploy to nurture the relationships they have with existing customers. A systematic, process-based approach to the creation and management of relationships should translate the efforts by competent salespersons into selling-firm performance.

In a fast-paced, changing market place, access to timely and accurate information can make the difference between a converted and a missed opportunity for a competent salesperson. Insightful, specific, and credible information on customers is the best support for sustained firm performance when one considers that processes can be easily replicated and competent salespersons easily poached by the competition. This suggests that the technological provisions provided to the sales force likely plays a key role in the people-performance relationship. Thus, it is proposed here that technological provisions will positively moderate the effect people have on performance such that people will influence performance to a greater extent in firms with high (versus low) levels of technological provisions.

The model is tested by conducting regression analysis of a cross-industry data set collected from 1,227 managers. Results indicate firms that spend substantial effort developing their sales people experience greater firm performance compared to firms that spend less effort developing their sales people. The analysis indicates this effect can be partially explained by the relationship building processes institutionalized by firms. Further, the results suggest the positive effect people have on performance can be amplified by providing the sales force technological provisions.

These findings support prior research examining the important and dynamic relationship-building role of the sales force (e.g., Morgan and Hunt 1994; Palmatier et al. 2007). Salespeople are the boundary spanning agents of the firm responsible for building relationships with customers which ultimately enhances firm revenues. By carefully developing the people responsible for generating revenues and institutionalizing relationship building processes management can systematically enhance the firm’s performance. Additionally, the model indicates that technological provisions can magnify the positive effect salespeople development has on firm performance. Firms can maximize the positive effect of developing and engaging their salespeople by offering the sales force technological provisions that can aid them in their work.

Keywords

  • Firm Performance
  • Sales Force
  • Sales Performance
  • Sales Process
  • Conduct Regression Analysis

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© 2015 Academy of Marketing Science

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Krishnan, V., Peterson, R., Groza, M.D. (2015). The Effect of Sales People, Processes, and Provisions on Performance: The 4P-Sales Management Model. In: Kubacki, K. (eds) Ideas in Marketing: Finding the New and Polishing the Old. Developments in Marketing Science: Proceedings of the Academy of Marketing Science. Springer, Cham. https://doi.org/10.1007/978-3-319-10951-0_6

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