Niladri Syam

That's What I Thought I Wanted? Miswanting and Regret for a Standard Good in a Mass-Customized World

How can a standardized product survive in a mass-customized world? This requires understanding that consumers often experience problems predicting their future hedonic reactions to new experiences (such as custom products), leading to feelings of regret. This form of regret occurs not because the custom product differs from specifications, but because consumers miswanted the design they ordered. Our analytic model shows that regret aversion induces consumers to design custom products to reflect the attributes of the available standard products. Consequently, regret-averse consumers may choose the standard product rather than place a custom order. The number of available standard products, however, moderates both these effects. Two experiments empirically substantiate the key predictions of the analytical model: (a) the custom products resemblance to the standard product grows with regret aversion associated with miswanting, (b) there exists a segment of “regretfully loyal consumers” for the standard product in a mass-customized world and it expands with regret aversion, (c) both the above effects are weakened by the presence of a second standard product, and (d) the custom product can increase its market share when the number of standard products increases.

Manager-Salesperson Congruence in Customer Orientation and Job Outcomes: The Bright and Dark Sides of Leadership in Aligning Values

To create customer-oriented organizations, managers are often asked to promote a values-based vision. Yet, many managers struggle with transferring their values to employees making strategic value changes difficult. Despite this challenge, research has yet to demonstrate how managers effectively align values within the sales force, or the impact alignment has on job outcomes. Therefore, we develop and empirically test a conceptual framework to examine the role of transformational leadership in aligning salesperson customer orientation (CO) values. We find that transformational leadership is a strong mechanism in creating perceived value congruence, yet may have a surprising dark side. Results suggest that transformational managers achieve congruence by raising or, contrary to conventional wisdom, lowering salesperson CO values to meet the perceived values of the manager. Response surface modelling results support the importance of perceived manager values. Customer-oriented salespeople have higher job satisfaction and sales performance when they perceive their manager to also have high CO. When values are misaligned, job satisfaction increases more for low CO salespeople as perceptions of manager CO increase. Exploratory findings show that performance was higher under situations of perfect alignment but also under severe misalignment suggesting that values generate performance under complementary or supplementary conditions.

Can Sales Uncertainty Increase Firm Profits

The authors add to the sales management literature in three ways. First, they demonstrate that a firm can benefit from higher sales uncertainty. This is contrary to the finding from the standard principal–agent models that more sales uncertainty hurts the firm when agents are risk-averse. Second, the authors find that the risk-averse agents total pay can increase when there is high sales uncertainty, and this too is contrary to the standard principal–agent model. Third, they provide intuition for this surprising result by showing that it holds when the slope of the sales response function is random but not when the intercept is random. When the responsiveness (slope) of sales to a decision variable (of the firm or the agent) is random, information about randomness becomes decision-relevant and the firm can exploit learned information. In this studys model, the agent and firm can receive noisy signals of random demand. When the customers’ response to effort (or price) is random, the decision about effort (price) responds optimally to information in a way that benefits the firm. When uncertainty is high, there is more potential information for the firm to exploit profitably, owing to the convexity of the sales with respect to the uncertainty parameter. This is enough to dominate the negative impact of uncertainty owing to agents’ risk aversion. When randomness affects only baseline sales (intercept), received signals are not decision-relevant. In that case, higher uncertainty has only a negative impact, just as in standard principal–agent models.

How Do Specialized Personal Incentives Enhance Sales Performance? The Benefits of Steady Sales Growth

The authors study specialized personal incentives (SPIs), which are cash rewards granted to salespeople for meeting interim performance goals within the regular sales quota period (monthly, quarterly, etc.). Because firms often institute multiple SPIs, the authors are able to investigate whether different sales achievement trajectories have differential impacts on salespeoples period-end sales performance. The authors find that a steadily growing sales trajectory in a sales period is more strongly associated with period-end success than a sales trajectory that is relatively flat early but has a sharp spike later in the period. Furthermore, although salespeople who had high performance in the prior month (i.e., high-performance state) may be able to draw on superior selling strategies (compared with other salespeople), they too experience a boost in sales performance in the current month by earning SPIs. Notably, the authors also find that although earning SPIs benefits all salespeople, there is a U-shaped relationship between a salespersons performance state and his or her month-end sales performance. For any specific number of SPIs earned, the probability of meeting and exceeding month-end quotas is boosted more for salespeople with low- and high-performance states than for salespeople with a medium-performance state.

Personal selling and the purchasing function: where do we go from here?

The business-to-business selling function has changed over the years, with more informed and demanding buyers, prompting firms to move toward a more consultative, solution-selling approach. While these changes have been the focus of extensive research in the personal selling and sales management domain, the customer side of the interaction dyad requires more examination. Even within the context of the customer side, insufficient attention has been paid to the purchasing function in business-to-business (B2B) selling research. Given the increased importance in customer organizations of the purchasing function, this article presents a literature review that highlights the purchasing functions personal selling and sales management needs and argues that, as the purchasing function becomes more important and its needs evolve, personal selling and sales strategies also need to evolve. The article highlights areas for future research in this domain.

Generating and sharing of market intelligence in sales teams: an economic social network perspective

Abstract In this research, we take a multimethod approach to shed light on the potential costs to sales teams that generate and share market intelligence (MI). First, we introduce an analytical model to propose the respective levels of effort that sales managers, experts, and team members spend generating and sharing MI. To test our propositions, we utilize social network data from 40 independent, business-to-business (B2B) sales teams, representing 287 salespeople. Interestingly, our results support the premise that team members become dependent (reduce MI efforts) when their sales manager or team expert shares MI among the team. We term this a “sharing tax” that sales managers and team experts pay when they share MI. Consequently, sales managers demonstrate greater MI-generation efforts the more they share MI. We also find that experts who share more (less) also show greater (lesser) MI-generation efforts, but only for teams where sales managers share low (high) levels of MI. In summary, our research innovatively conducts an empirical test of the Nash Equilibrium pattern of sales team effort to show that two critical team members, the sales manager and expert, are at a disadvantage when they share valuable MI.

Competing with Co-Created Products

The practice of firms co-creating products and services with their customers has a long history in business markets and, with advances in information technology, is now gaining increasing popularity in consumer markets as well. In this research we study the incentives of competing firms to co-create. We analyze the strategic choices of two competing downstream firms who simultaneously decide whether or not to co-create with an upstream supplier. Within this framework we incorporate, (1) endogenous pricing and effort choice by the upstream supplier and (2) endogenous pricing and effort choices by the downstream firms. Firms contemplating co-creation with a supplier are faced with a trade-off. On the one hand they can benefit from the supplier’s innovation efforts and therefore obtain a better product than they themselves could produce. On the other hand, they are confronted with the adverse effect of their own innovation efforts spilling over to their rivals via the supplier who would sell the co-created products to all firms. Our model captures this tension and offers several insights.First, we show that, when firms compete in the end-consumer market, the supplier can exert lower innovation effort when it co-creates with more firms. This result complements the existing literature that shows that, without competition between firms, a supplier is always better off and exerts more effort when it co-creates with more firms.Second, we show that in the co-creation environment, ex-ante symmetric firms may pursue asymmetric strategies in equilibrium. The asymmetric equilibrium, in which only one of the two firms co-creates with the supplier, is obtained when the degree of competition between the firms is moderate.Third, we find two types of asymmetric equilibria. For moderately low degrees of competition between firms, all parties prefer the asymmetric outcome. For moderately high degrees of competition, both firms prefer co-creation, but the supplier will refuse to co-create with one of them thereby enforcing the asymmetric outcome. Thus, a strategic supplier’s role is critical in that it expands the region where the asymmetric equilibrium obtains, beyond that preferred by the firms themselves.Finally, and counterintuitively, a higher degree of product fit for the rival can actually benefit the co-creating firm in the asymmetric outcome, even though it improves its rival’s product.