One Size Does Not Fit All in Managing Styles
Bauer Researcher Recognized for Research in Motivating Salespeople
Published on March 10, 2020
North American industries spend trillions of dollars on the salesforce segment of their marketing budgets each year.
C. T. Bauer College of Business Marketing Professor and Chair Michael Ahearne, through decades of sales research, has identified many factors that impact the success or failure of that spending.
He recently joined a select group of scholars from the world’s top universities in receiving the 2020 Society for Marketing Advances (SMA) Distinguished Scholar Award. Ahearne, the Research Director of the Bauer College Sales Excellence Institute, has had research insights published in the Harvard Business Review, Wall Street Journal, and many other news outlets, as well as in highly regarded academic journals. His book, “Selling Today: Partnering to Create Customer Value,” is the highest grossing selling textbook in the world, and Ahearne has been named among the 15 top scholars in the world for publications in top marketing journals over the past 10 years.
A recent research paper, “Managing Laggards: The Importance of a Deep Sales Bench,” published in the Journal of Marketing Research, exemplifies Ahearne’s industry-relevant scholarship. The study provides insights that can help sales managers improve the performance of sales employees who aren’t meeting sales targets (or quotas).
Though much of sales research has focused on the use of bonuses and other incentives to boost sales, “Managing Laggards” examines the effectiveness of a disincentive.
Ahearne and his coauthors (including Raghu Bommaraju, who recently earned his Ph.D. at Bauer College and is now Assistant Professor at the Indian School of Business), partnered with the U.S. division of a Fortune 500 company. The company decided to try a new strategy to motivate the lowest performers or “laggards” in their sales organization.
In approximately half of the company’s sales districts, salespeople were told that failure to achieve a minimum sales target would result in the replacement of the lowest performing salespeople. Sales trainees were hired and placed in these sales districts to form a “bench” allowing sales managers to fill vacant territories rapidly. With potential replacements standing by, laggards in the sales districts almost immediately increased their sales performance. Sales districts with a trainee on the bench performed significantly better overall than other sales districts.
A series of controlled laboratory studies confirmed the results. Ahearne and co-authors conclude that incentives combined with this disincentive may lead to better sales. More generally, research by Ahearne has shown that one size does not fit all in managing salesforces, and different tactics work best to motivate star, core and laggard salespeople.