An exploratory model and initial test of the influence of firm level consulting-oriented sales...
Publication: Journal of Personal Selling & Sales Management
Date: Friday, March 22 2002
Introduction
As Cespedes (1995) notes, despite the intensifying rate of improvement on most manufacturing performance indices, overall competitiveness measures for manufacturing firms declined because key competitive factors are shifting into areas such as customized new product development,
Baber (1997) describes a sales consultant as "both a consultative salesperson and a consultant. As a consultative salesperson, your objective is to find a customer want, need, problem, or opportunity. It then is to determine how your products and services can solve or fulfill it ... As a consultant, your objective is to develop industry, customer, and/or technical knowledge, become an expert in some area of value to the customer, and then look for and solve customer wants, needs, problems, and opportunities related to that knowledge and expertise" (p. 162). Thus, consultative selling emphasizes the sale, to current or new customers, of appropriate products or services to solve the customer's problems, while sales consulting emphasizes enhancement of the value of the selling firm's product for current customers (Westbrook and Peterson, 1998).
Figure 1 provides a model relating consulting oriented sales training, post-sales training, evaluation, and compensation programs leading to long-term sales growth. These four components reflect both consulting oriented behavior control systems and outcome oriented incentive systems and were conceived to reflect current sales management knowledge (see Jackson et al. 1995; Stathakopoulos 1996) about appropriate approaches to develop relationship-oriented partnerships with customers. This model was designed to be an exploratory first step. Potential mediating variables such as sales force behaviors and impact of programs on perceived customer product value should be explored in future research.
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Cespedes (1995) argues that developments in information technology, accelerated product life cycles, supply chain arrangements, and market fragmentation involve salespeople in activities traditionally ascribed to product marketing and other functional groups. The impact of these developments on marketing requirements, such as more customized product-service offerings and greater segment/account specific knowledge, should increasingly impact field sales and service systems. These developments should impact the extent of cross-training of technical and sales personnel, team selling, major account managers, sales training content, and evaluation/compensation programs. However, Cespedes argues that common sales training "practices tend to develop the sales force in the image of the previous generation of successful salespeople in the firm, not with a vision to the new marketing environment" (p. 170). He cites Kerr and Burzynski's (1988) study that found that customer service and relationships with other areas of the firm were seen by sales managers as essential for effective selling, but only 1% of sales-training times focused on these areas.
Re-orientation of the sales force from a transaction-oriented selling emphasis to a consulting emphasis requires significant revision of sales management programs and organization, as well as possible revision of organizational wide structure, culture, and procedures. This re-orientation may entail investments or additional emphases on team selling/ account service, major account managers, and enhancement or further development of diagnostic and problem solving skills possessed by the sales force. The organization would need to be structured to facilitate formal and informal contact between sales, marketing, and technical personnel to ensure appropriate product/service modification for customers based on diagnosis of the customer's situation. It is realistic to acknowledge that such extensive investments and changes required by consulting oriented sales management programs or other relationship-marketing strategies may not be appropriate for many firms. The decision as to the extent of re-orientation of sales programs to encourage sales consulting depends partly on the importance of customer loyalty and retention to the firm. Cespedes (1995) notes that relationship-marketing strategies are most likely to succeed among relationship-oriented buyers who are willing to develop long-term partnerships and make significant investments in the partnership.
Certainly the nature of the relationship sought by a customer influences receptivity to a consulting oriented sales strategy. Weitz, Castleberry, and Tanner (1995) distinguish strategic partnerships from functional or relational partnerships. Strategic partnerships are characterized by their high concern for the other party's welfare, their significant investments to improve the profitability of both parties, and their high levels of coordination. They are created explicitly for the purpose of uncovering and exploiting joint opportunities (Krapel et al. 1991). The prevalence of relationship oriented buyers and strategic partnerships is likely to be higher in industries where technical selling (Newton 1973) is the norm.
Sales consultants require different skills to perform their relationship-marketing role, compared to more transaction-oriented salespeople. Churchill et al. (2000) indicate that different skills are needed for different types of selling tasks and skills. Researchers have provided valuable typologies of selling positions that help us understand the type of sales positions and market conditions most favorable to sales consulting. In Newton's typology (1973), sales consulting would seem to be most appropriate in technical selling positions. The major job of a technical sales force is to increase the volume of sales to existing customers by providing them with technical advice and assistance. Technical selling is much like management consulting in that the ability to identify, analyze, and solve customer problems is vitally important for salesperson and firm success. In Moncrief's (1986) typology, sales consulting would seem to be most appropriate in industries dominated by institutional selling. In Darmon's typology (1998), sales consulting would be most appropriate under conditions of extensive/complex information processing for selling positions classified as partnership builders or relationship builders. Partnership builders would include high-tech industrial sellers and national account managers, while relationship builders would include industrial sellers with a large number of accounts.
This article presents and tests an exploratory model that links consulting oriented sales management programs and objectively measured long-term firm sales growth. The firm performance outcome is an appropriate construct for this model because sales management programs are organization variables. This study focuses on organization level policies, which should contribute to our knowledge of the impact of specific forms of organization-level behavior control programs, such as monitoring and evaluation, and outcome control programs, such as incentive compensation, on firm performance. Previous research (Anderson and Oliver 1987; Challagalla and Shervani 1996; Cravens et al. 1993) on control strategies has noted the stronger impact of behavior based control strategies on employee level outcomes, such as intrinsic motivation and job satisfaction. The emphasis of this body of research has been on behavior-based controls because outcome-based controls reflect an organization-level perspective. Another reason for the emphasis of previous research on input criteria (behaviors) is that these behaviors are seen as more controllable than the outputs, which can be affected by numerous factors outside the control of the salesperson or sales manager (Churchill et al. 1985). However, it is our contention that sales consultants in the technical type of industry environments described above have more control over other marketing mix determinants of sales growth, such as product development, after-sales service, and supply-chain performance. Salesperson consultants would also have more impact on the determinants of customer satisfaction and customer cost reduction.
The mix of behavior-based and outcome based controls is appropriate in light of the results reported by Cravens et al. (1993) indicating a complex relationship between behavior-oriented and compensation oriented controls on sales force non-selling behavior performance, as well as outcome performance (self-reported comparisons to competition on measures of sales volume/sales growth/profitability and customer satisfaction effectiveness). Their findings promote the use of behaviorally based perspective by sales executives who wish to develop a team-oriented, recognition-motivated sales force with orientations toward sales support and customers. These objectives are important for effective sales consulting. However, their study found no impact of either control perspective on use of technical knowledge. The implication of the Cravens et al (1993) findings for consulting oriented sales management programs is that both behaviorally based and outcome based perspectives must be employed in a coordinated and consistent fashion to encourage the quality of consulting behaviors with the client, and within the selling firm in order to achieve customer satisfaction with product value and to achieve sales growth.
Consulting oriented sales programs would emphasize development of salesperson customer knowledge as well as questioning, listening, problem diagnosis, and problem solving skills. Consulting oriented evaluation programs would measure and reward salespeople on their ability to solve customer problems, reduce customer costs, increase sales from current customers, improve customer satisfaction, and improve customer retention.
Previous sales research has emphasized salesperson level models, using traits, attitudes, cognitive capabilities, and orientation (see Walker, Churchill, and Ford 1979; Saxe and Weitz 1982) with little predictive impact. Expectancy theories of motivation (Vroom 1964) have also had little predictive value. Greater attention needs to be given to organization level sales programs as determinants of firm level performance to address the impact of sales force strategy. This research is needed to complement employee-based selling research and previous research on determinants of firm level research. Salesperson, environmental, and organizational factors impact sales organization and salesperson effectiveness, but salesperson outcome performance and sales organization effectiveness are related but different constructs (LaForge and Cravens 1981-1982; Ryans and Weinberg 1979; Ryans and Weinberg 1987).
Consulting oriented sales programs also may impact the supply chain. Since the sales-force is the primary link in many business-to-business relationships and since managers regard sales-force customer satisfaction activities as critical to enhance customer satisfaction, it is important to understand how sales management programs designed to enhance customer relationships impact supplier performance (Cravens et al. 1993; Grewal and Sharma 1991; Weitz and Bradford 1999). As indicated by Tzokas (2001), historical sales management practices have been oriented towards higher effectiveness and efficiency in the sales encounter. Attention devoted to relationship marketing has shifted to creating the necessary conditions for a long-term relationship. So there is a growing need for more knowledge concerning programs relationship marketing. The potential importance of sales-force problem diagnosis/after-sales service was discussed by Wood, Merenda, and Kaufman (1996), who suggest that problem solving suppliers seek to develop strong technical and collaborative skills so that they can resolve customer's design and production problems, and thus develop close working relationships.
A Model of Consulting Oriented Sales Management and Performance
In cases where long-term buyer-seller relationships are important for the reasons outlined in the introduction, it is likely that sales management programs need to be more relationship oriented. The previously cited market orientation and customer orientation research provides one basis for the expected link between consulting oriented sales management and performance. Sales consulting requires activities consistent with Kohli and Jaworski's (1990) information processing dimensions of market orientation. These consulting activities reflect Day's (1990) arguments for the skills that are required to translate a market orientation culture into practices.
Effective salesperson consulting skills, and the sales management programs that foster such activities, may be valuable sources of sustainable competitive advantage (Aaker 1988; Day and Wensley 1983; Reed and DeFillippi 1990) and thus will impact performance in the same fashion as other market oriented activities (Pelham and Wilson 1996). Sales consulting skills may be valuable in complex, technical selling environments, but if these skills are rarely fostered the effective sales consultant will have a competitive edge (Avlontis and Gounaris 1997). Thus, the hypotheses that follow stipulate how consulting oriented sales management programs should enhance selling firm sales growth in certain business-to-business markets.
The expectation that a consulting oriented sales management program would influence appropriate and effective salesperson adaptive and consulting behaviors is based on empirical research indicating that salesperson customer orientation responds to managerial policies and actions (Kelly 1992). This study will seek to measure direct relationships to firm performance, while future studies should measure mediating relationships.
Consulting Oriented Sales Training
As a component of a consulting oriented sales management program, initial consulting oriented sales training (C.O.S.T) for new salespeople would have the same theoretical bases for a link to selling firm performance as discussed above. However, each proposed component will be discussed to clarify how each should impact the quantity and quality of sales consulting behaviors, leading to improved firm performance.
Hawes et al. (1993) and Weitz and Bradford (1999) indicate the need for changes in traditional sales management programs in response to need for a more relationship-oriented and market-oriented approach. They suggest that a sales force engaged in a partnering role must have a higher level of customer knowledge than previously required in the traditional selling role. This knowledge includes in-depth understanding of how the seller's capabilities can impact what the buying firm needs to do in the future.
Hawes et al. (1993) suggest that sales-force training needs to more strongly emphasize use of a problem solving or consultative selling style. The case for greater sales training emphasis on problem diagnosis/solving and listening skills is supported by Good (1993), Ingram et al. (1992), and Tayor (1986). A study by Castleberry et al. (1999) found that their construct of Interpersonal Listening in Personal Selling (ILPS) was significantly correlated with adaptive selling and salesperson performance. Listening skills can be improved and measured (Devine 1978), thus lending support to the inclusion of listening skills training in initial and continuing sales training programs.
An industrial firm cannot be customer or market oriented unless its salespeople (1) develop a good understanding of customer needs through effective listening (Ramsey and Sohli 1997; Baroom et al. 1998), (2) analyze and understand customer problems (Leong et al. 1989), (3) communicate that understanding to the relevant departments such as R&D, production, and customer service in order to (4) tailor products and services to meet customer needs and solve their problems (Saxe and Weitz 1982; Baroom et al. 1998). Pelham (1997a) suggests that the market oriented firm's superior customer understanding could lead to better customization of the product/service offering, tailored to the unique needs of individual customers or groups of customers. If customization efforts are appropriate, consulting oriented sales management programs should provide the salesperson with skills to successfully develop an understanding of customer needs and work with relevant technical and production departments to develop the customized product.
Clancy and Shulman (1994) argue that it is a myth that salespeople know a great deal about their customers. They indicate that typically salespeople ask only what they think they need to know to obtain an order. They suggest that the reason that salespeople don't probe for more information may be that their companies don't reward them for doing so. Sharma and Lambert's (1994) study documents this low accuracy in salesperson's perceptions of their customers. They suggest that firm performance could be improved if the sales-force is better trained to gather more accurate information. Inaccurate salesperson perceptions have been shown to directly affect performance (Lambert et al. 1990; Weitz 1978). These misperceptions can lead to inappropriate prospecting conclusions, inappropriate presentation strategies for the particular customer, or inappropriate solutions to customer problems/needs. To correct such misperceptions, a consulting oriented sales training program should emphasize listening, diagnosis, and problem solving skills (compared to company/product knowledge and presentation skills). Ramsey and Sohli's (1997) results support the expectation that consulting oriented sales training will influence customer retention. This is based on their findings of significant relationships between a customer's perception of salesperson listening behavior and trust in the salesperson, as well as anticipation of future interactions.
Napolitano (1997) suggests that salespeople who are responsible for implementing a partnering buyer-seller strategy must have the conceptual and analytical skills needed to understand the customer's key productivity goals, the skills to identify problems, and provide solutions based on the selling firm's resources and creativity. Puri's (1993) study suggests that purchasing managers considered salespersons' problem solving abilities to be more important than sales presentation skills or industry knowledge, and almost as important as product knowledge.
Chonko et al. (1993), Erffmeyer et al. (1992), and Puri (1993) indicate sales training needs to more strongly feature consultative or problem solving skills and behaviors, adaptive selling skills, and customer relationship building skills.
In summary, consulting oriented sales training should enhance the sales force's ability to continuously improve the product/service offering beyond any competing firm's ability to copy such improvements. This increases the buying firm's switching costs and, thus, enhances the selling firm's customer retention. This higher level of customer retention improves the selling firm's growth by reducing the base of lost customers needed for replacement. Therefore:
H1: Initial consulting oriented sales training positively influences the selling firm's sales growth in certain business-to-business markets.
Post-Sales Training
Sharma (1997) concludes that on-going customer satisfaction training is critical because it forces the salesperson to reexamine selling techniques and beliefs and because feedback through training has been seen as an important factor enhancing learning (Einhorn 1982). A consulting oriented sales management program must require sharing of successful and unsuccessful consulting strategies, tactics, and solutions. A consulting oriented sales training program, including learning activities beyond initial sales training, is a microcosm of the organizational learning model which imparts to all salespeople the benefits of experience with previous consulting efforts.
An effective sales training program continues beyond initial training. After initial training, new salespeople undergo a coaching process on the job by sales trainers, supervisors, or experienced salespeople. Data reported by Dartnell Corp. (1999) indicate that industrial products companies devoted an average of 32 hours per year training experienced salespeople. However, the majority of this training time (59%) is devoted to imparting product knowledge. Certainly, changes in buying structures and buyers' needs merit greater attention.
Kohli et al. (1998) indicate that some scholars even argue that the accumulated knowledge and learning of individual organizational members is an organization's only source of sustainable competitive advantage. They conclude that a focus on skill development, even for veteran salespeople, is likely to be associated with higher performance. Implementing a relationship-oriented strategy requires a substantial portion of post sales training (P.S.T.) time in formal and informal sales meetings to enhance sales force customer problem solving skills and relationship building skills. P.S.T. should encourage a learning goal orientation (Sujan et al. 1994), the emphasis on efforts to improve sales skills, as opposed to a performance goal orientation, the emphasis on using current skills to achieve short-term results. VandeWalle et al. (1999) found that a learning goal orientation has a positive relationship with sales performance, whereas a performance goal orientation was unrelated to sales performance. Thus:
H2: Consulting oriented post sales training (P.S.T.) positively influences the selling firm's sales growth in certain business-to-business markets.
The success of consulting oriented post sales training will be enhanced if the initial consulting oriented sales training provided the sales force with the appropriate level of consulting knowledge and skills. Likewise, as indicated by the arguments above, initial sales training benefits will diminish over time unless reinforced with learning activities throughout the salesperson's career. Hence:
H2a: The interaction of consulting oriented sales training and consulting oriented post sales training, relative to sales growth, is a positive and significant influence.
Consulting Oriented Behavioral Evaluation
Even if firms emphasize relationship building and consulting skills in their training programs, other sales management programs should converge with this training to reinforce sales force's learning orientation, as well as motivate the sales force to improve the quantity and quality of consulting efforts. The accurate and appropriate assessment of salesperson performance is critical in order for the sales force to make a positive contribution to the firm's long-term success (Boles et al. 1995).
The extent of consulting efforts seeking to enhance product value for current customers is influenced by a sales-force's motivation to expend effort toward these tasks. Sales-force motivation to use and improve consulting skills is influenced by perceptions of the instrumentality of intrinsic and extrinsic rewards arising from those efforts (Walker, Churchill, and Ford 1977). Input-based, or behavioral, evaluations can complement other sales programs in achieving higher levels of intrinsic motivation and overall higher levels of sales (Oliver and Anderson 1994) and improvements in salespersons' commitment and satisfaction (Anderson and Oliver 1987; Challagalla and Shervani 1996; Oliver and Anderson 1994). Along that line of thought, it is expected that a consulting oriented evaluation system that includes assessment of salespeople based on their inputs (extent/quality of effort devoted to the diagnosis of customer problems and extent/quality of interaction with internal technical people) as well as outputs (level of customer understanding and extent of customer problem solving) will result in the positive outcomes cited by these researchers. Account analysis and interrogatory-based tracking programs facilitate behavior-based evaluation.
Evaluation systems that measure performance in terms of customer satisfaction, increased sales from current customers, and customer retention communicate to the sales force what sales behaviors management considers important. If a firm seeks to implement a relationship marketing strategy, it is appropriate that a consulting oriented evaluation program assess the success of the training program in term of improvement in questioning/listening skills, sales-force knowledge of customer needs, problem diagnosis/solving skills, and ability to work with internal technical personnel to solve customer problems (Weitz and Bradford 1999). In addition, sales management should recognize sales-force consulting that results in significant customer cost savings.
Inclusion of customer feedback in the evaluation process is suggested in findings reported by Lambert et al. (1997). They found a significant relationship between the customer's evaluations of the selling firm and customer evaluation of the salesperson. Boles et al. (2000) conclude that there is value in basing some of a salesperson's evaluation on his/her relationship selling behaviors. Peppers and Rogers (1997) note that, as firms shift strategies toward adding customer value in order to retain customers, there is a shift toward evaluation and compensation based on long-term customer satisfaction, full customer service, retention rates and growth of customer value. Therefore:
H3: A consulting oriented evaluation (C.O.E) program positively influences the selling firm's sales growth in certain business-to business markets.
Consulting Oriented Compensation Plan
Sales force compensation programs have always played a major role in motivating, rewarding and influencing sales-force behavior (Churchill, Ford, and Walker 1985, 1997). Compensation systems that reward the successful outcomes of consulting behaviors reinforce the input consulting behaviors discussed above and can lead salespeople to improve consulting skills. It is important for the compensation program to be structured in such a way that it complements the evaluation system, which, in turn, measures reasonable controllable outputs.
A consulting oriented compensation plan (C.O.C.P.) should include commissions/bonuses based on reasonably controllable results within the time frame of the compensation period. These results should include increasing sales from current customers, positive feedback tied to customer satisfaction, and enhanced customer retention in order to be consistent with the objectives of a relationship marketing strategy and the content of consulting oriented training and evaluation programs. The inclusion of the customer satisfaction component is based on Ittner and Larcker's (1998) research that found that a positive relationship between customer satisfaction measures and future performance (customer retention and revenue growth). The inclusion of this customer satisfaction component is appropriate for consulting oriented salespeople, despite Sharma's (1997) argument that customer-satisfaction based incentives programs may be inappropriate and ineffective since salespeople may not understand what type of efforts enhance customer satisfaction. Consulting oriented salespeople should understand the relationships between the quantity and quality of their consulting efforts, enhanced product value, and enhanced customer satisfaction. Their consulting oriented sales training, post-sales training, and evaluation reinforces that understanding (see Figure 1).
This compensation program should motivate the sales force to perform an appropriate level of consulting-oriented sales-force activities oriented toward customer satisfaction and customer retention. Pelham (1997a) found that the customer satisfaction dimension of market orientation was the strongest link to firm new product success, relative product quality, and customer retention rate. The critical nature of customer retention is often not reflected in sales programs, despite data that indicate that twenty percent of business-to-business customers contribute a median seventy-five percent of sales volume (O'Connell and Keenan 1990). Thus, if this compensation program is appropriately structured, it should influence long-term sales growth. Over-reliance on traditional bases of compensation, such as current period sales versus quota and developing new accounts, encourages a short-term transaction orientation with customers. Seeking long-term growth but rewarding short-term performance is counterproductive in situations where a relationship orientation is more appropriate.
A consulting oriented compensation plan that has a customer retention component should positively impact customer retention and thus sales performance. The impact of customer retention on revenue growth has been documented by Anderson et al. (1994), Fornell (1992), and Vavra (1992). The importance of customer retention as a goal has been illustrated in industries where vendor reduction and preferred supplier programs are prevalent (Morgan and Cayer 1992). Thus:
H4: A consulting oriented compensation plan (C.O.C.P.) positively influences the selling firm's sales growth in certain business-to-business markets.
The results of Cravens et al. (1993) discussed earlier suggest the need for consulting oriented sales management programs that are both behaviorally and outcome based. They must be consistent in their encouragement of quality consulting behaviors with the client and within the selling firm in order to achieve customer satisfaction with product value and to achieve sales growth.
Without an appropriate evaluation program a consulting oriented compensation plan will be ineffective because it measures and rewards inconsistent behaviors and outcomes. Likewise, a consulting oriented evaluation program will not impact performance unless consulting behaviors and outcomes are appropriately rewarded. Many of the outcomes of sales-force consulting, such as enhanced product value-in-use and increased customer satisfaction, may take longer to impact than quarterly sales results. If this is not reflected in the evaluation-compensation system, the success of consulting oriented sales management program is likely to be diminished. Therefore:
H4a: The interaction of a consulting oriented evaluation program and a consulting oriented compensation program, relative to sales growth, is a positive and significant influence.
Method
Questionnaires were sent in to the national sales managers of 700 medium-to-large industrial manufacturing firms (over $40 million in sales) from a random sample of firms drawn from Wards Directory, excluding divisions of larger firms. Sales managers from one hundred forty-eight firms (21.1%) responded to the survey. Sales growth data for the next four years for these firms were obtained from Ward's Business Directory for the total sample. Since firm level sales management programs were the constructs of interest, it was considered appropriate to use national sales managers as critical respondents. This sampling frame is consistent with market orientation research (Narver and Slater 1990; Pelham 1999). The sample was drawn from five two digit SIC manufacturing industries: Rubber (SIC 30), Fabricated Metals (SIC 34), Machinery (SIC 35), Electric/Electronic (SIC 36), and Instruments (SIC 38). The first two industries were chosen to represent commodity products. The last three industries were chosen to represent specialty industries in order to provide sufficient variation for variables of interest, while providing industries where salesperson consulting might be appropriate. These industries represent forty-two percent of industrial manufacturing firms.
The average size of responding firms was $437 million in sales, with 64% having sales under $100 million. The composition of responding firms was: rubber (11.5%), fabricated metals (11.5%), machinery (49.3%), electric/electronic (15.5%), and instruments (12.2%). These proportions are roughly equivalent to the proportions based on the Census of Manufacturers, with fabricated metals being slightly under-represented and machinery being slightly over-represented. To measure non-response bias, the composition of responding firms was compared to non-responding firms by SIC code and by size of firm. There were no significant differences based on chi square analysis and t-tests of means. Early (first 4 weeks) and late responders to the survey were also compared based on these tests, and, again, there were no significant differences based on comparison of results, size of firm, or SIC code industry composition. Respondents were only told that this was a survey of sales management practices to avoid responses by only firms who practice consulting oriented sales management.
Measures
Appendix 1 provides items used to develop measures of the consulting oriented sales management programs. All items used 7-point Likert or semantic-differential scales, with the exception of the items measuring consulting oriented sales training (C.O.S.T.). The responses to individual measures, using these scales, were averaged to form the variable. A pilot study (n= 30) of sales managers was conducted to eliminate items with low reliability scores and low factor analysis loadings on their respective constructs. Measure derivation of these constructs and related constructs, as well as coefficient alpha and confirmatory factor analysis data, are available in Pelham's (2002) study of the moderating influences of the industry environment on sales force consulting behaviors and consulting effectiveness. Those data indicated sufficient evidence exists as to dimensionality and discriminant validity of the 4 consulting-oriented sales management programs.
C.O.S.T. was measured by constant sum questions requesting the percentage of time devoted to various types of training subjects adding up to 100%. Thus, it was not possible to measure the reliability of the individual measures of C.O.S.T.
Consulting Oriented Sales Training (C.O.S.T.) was tapped by six questions asking the percentage of initial sales training time devoted to consulting oriented content and more traditional sales training content.
Consulting oriented evaluation (C.O.E) is composed of 5 items designed to measure the extent to which sales managers evaluate salespeople on behavioral and outcome based standard measures related to customer understanding and customer problem diagnosis/solving.
The construct of Consulting-Oriented Compensation Plan (C.O.C.P.) is composed of 3 questions designed to measure the extent to which the firm's commission and bonus system is based on sales increases from current customers, customer satisfaction feedback, and customer retention.
Post-sales training (P.S.T.) is composed of 2 questions designed to measure the percent of new salesperson's time spent with experienced salespersons learning how to maintain good customer relationships and percent of sales meeting time spent in workshops discussing experiences with solving customer problems.
Appendix 2 provides items used to measure industry characteristics, which were included in the models as control variables. Objective industry characteristic measures were drawn from Ward's Business Directory, Dun's Industry Norms, and Key Business Ratio's. Sheth (1985) suggests that product and customer differentiation are critical determinants of industrial market strategy. Product/customer differentiation and product expenditure were also suggested as possible moderating factors for adaptive selling by Spiro and Weitz (1990). The inclusion of these variables is also supported by Saxe and Weitz's (1982) finding that customer-oriented selling behaviors were expected to occur when the salesperson can offer a range of alternatives and customers are engaged in complex buying tasks. Additional discussion of the derivation of these measures and data supporting construct validity of these industry control measures are available in Pelham's 1999 and 2002 studies.
The dependent performance variable (Appendix 2) is growth in sales from 1996 to 2000 drawn from Ward's Business Directory.
OLS regression was used to test the hypotheses. Moderated regression analysis was used to explore hypotheses related to the interaction of consulting-oriented programs.
Results
An examination of the means of consulting variables was conducted across the five 2 digit SIC code industries. It would be expected that consulting oriented activities would be more prevalent in specialty industries, such as machinery, electric/ electronics, and instruments, because their products are more complex and differentiated, increasing the potential for product/service customization (Sheth 1985). There was a significant (p< .05) difference in the mean levels of consulting oriented sales training between the electric/electronic industry (50%) and the rubber industry (42%). However, there were no other significant differences in the means for other consulting oriented sales management programs across the 5 SIC industry groups.
In commodity industries, with low product differentiation, there should be some potential for sales-force consulting in areas such as complementary services and supply chain activities, even if the basic product is not conducive to customization. If sales consulting is rare, but somewhat valuable to customers, in these commodity industries, there may potential for sales consulting to provide a competitive advantage and lead to greater incremental sales growth, compared to industries where sales consulting is more prevalent. Pelham's (1997b) market orientation results suggest this possibility. There were significant differences in means between commodity and specialty industries for measures of industry characteristics such as differentiation and industry growth.
As indicated in Table 1, the consulting oriented sales management programs are significantly correlated with each other. The Consulting Oriented Evaluation Plan variable correlates with the consulting oriented Compensation Plan variable (r=.33, p< .001), Post Sales Training variable (r=.24, p< .01), and the Consulting Oriented Sales Training variable (r=. 17, p< .05). The Consulting Oriented Compensation Plan correlates with Consulting Oriented Evaluation (r=.33, p< .001) and the Post Sales Training variable (r=. 18, p< .001).
Table 2 provides regression models with firm sales growth as the dependent variable. When industry control variables are the only variables entered into the model, only product differentiation is significant (B=.21, p< .05) with an R-2=.04. The beta parameters for a consulting-oriented sales training and commission plan are significant (.18, p< .05), lending support to Hypotheses 1 and 4. The beta parameters for a consulting oriented post-sales training and evaluation program are not significant, leading to the rejection of Hypotheses 2 and 3. The model R-2 of. 13 represents an increase of .09 compared to the reduced model with only industry variables in the model. This result is similar to Pelham's (1999) results with a similar database of 229 industrial manufacturing firms in 8 SIC code industries. In that study the addition of firm strategies, market orientation, and firm size explained an additional. 13 of the variance.
To further indicate the complementary relationships between elements of a consulting oriented sales management program, moderated regression models 2 and 3 were evaluated. Model 2 indicates a significant interaction of consulting oriented initial sales training and post-sales training (B=.27, p< .05), with an addition of .01 in R-square above Model 1, with no interaction variable. Thus, Hypothesis 2a is accepted. This indicates the importance of following up initial training in questioning and diagnostic skills with learning emphasizing how to solve customer problems, enhance the value of the product in use, and enhance the buyer-seller relationship. Since consulting oriented sales training and post sales training are not significantly correlated and since neither of these independent variables are related to the dependent variable of sales growth, this interaction is a pure moderator, using the typology of Sharma et al. (1981). Model 4 indicates a significant interaction (B=. 74, p< 01) of a consulting oriented evaluation program with a consulting oriented commission plan. Thus, Hypothesis 4a is accepted. This model results in an increase in R-2 of .02 compared to Model 1, with no interaction variable. This indicates the importance of reinforcing the evaluation of sales-force consulting with a compensation program that rewards positive consulting results. This finding reinforces Sharma's (1997) results indicating the impact of customer satisfaction (input and output) evaluation measures on salespersons' reexamination of selling techniques. Since the independent variables of consulting oriented evaluation and compensation plan are significantly correlated, this interaction is a quasi-moderator using the typology of Sharma et al. (1981).
Discussion
This study contributed to the body of sales management research by providing an exploratory step toward understanding the relationships between sales management programs and firm performance. This study also contributed to previous research on behaviorally based and outcome based controls by indicating the need for coordination and consistency between consulting oriented training and evaluation programs with compensation programs.
The results of this study indicate that a sales management program emphasizing consulting oriented skills, knowledge, and outcomes can significantly impact selling firm sales growth in industrial manufacturing firms where there is likely to be a prevalence of relationship buyers and the need for strategic partnering. These results confirm the expectations that, if a sales management program is structured consistently with the Narver and Slater's (1990) market orientation elements of customer understanding, customer satisfaction, and inter-functional coordination, then the result should be higher sales growth for many industrial firms, compared to their competitors who take a more transactional/performance goal approach to their sales management programs.
The strong relationships between initial (and on-going) consulting oriented sales training and measures of long-term sales growth performance support researcher's (Hawes et al. 1993; Good 1993; Chonko et al. 1993; Puri 1993) arguments for emphasis on enhancement of listening and problem-solving skills. This emphasis should strengthen current customer relationships and customer retention, leading to improved industrial selling firm growth in the types of industry situations described above. This emphasis should also improve consultative selling skills, which should improve firm performance.
This study suggests that, for many firms in industrial markets, there needs to be a re-direction away from the traditional emphasis on the selling process and presentation techniques which may ignore the way in which customers buy (Donaldson 1998) and may be diminish sales-force customer orientation. Re-direction toward questioning and listening skills that enable the sales force to better understand their customers would enhance sales-force customer orientation (Ingram et al. 1992). The firms that emphasize consulting skills in their training and successful consulting behaviors in their evaluation/compensation programs should achieve these results because they are more likely to establish and maintain productive partnering relationships with their customers leading to customer retention (Bryne, Brandt, and Port 1993) and higher selling firm performance. In many industries, developing long-term strategic partnerships are growing in importance due to the increase in vendor reduction and preferred supplier programs. Customer retention is a critical determinant of performance because of the higher profitability of older customers who tend to buy full lines and due to lower marketing costs to serve these customers (Clancy and Shulman 1994; Heskett et al. 1994). Customer retention increasingly depends on achieving higher levels of customer satisfaction through value enhancing efforts. Jones and Sasser (1995) argue that the potential returns on initiatives to increase satisfaction in commodity businesses can be as high as the return on initiatives in more profitable businesses because these initiatives will often raise the product or service out of the commodity category. Despite the demonstrated value of marketing emphasis on existing customers, Clancy and Shulman (1994) estimate that very few of their consulting clients are concerned about retention and fewer are concerned with increasing usage from exiting customers.
This study's results indicate that, although consulting oriented sales training and compensation have the strongest relationship with sales growth, the elements of a consulting oriented sales management program are more effective when combined with the other elements. The importance of sales training as a determinant of improved firm performance is consistent with research (Piercy et al. 1998) indicating that sales managers rate sales training as one of the most important factors in improving sales performance. The consulting oriented knowledge and skills developed in initial sales training should be consistently reinforced in on-going learning activities designed to improve the relationship building and customer problem solving efforts of all salespeople. Evaluation of these efforts is more likely to result in positive outcomes when these efforts are rewarded with a consulting oriented commission plan.
It is important to note the significant influence of consulting oriented sales training and compensation on long-term growth. The implication for sales managers, in industries where relationship buying is prevalent and strategic partnerships are critical, is that there should be greater emphasis on 1. listening skills, diagnostic skills, and problem solving skill in sales training; 2. relationship-building skills and sharing of problem solutions in post-sales training learning; 3. salesperson evaluation systems which measure customer cost savings and customer feedback; and 4. compensation systems, which compensate salespeople for customer retention, positive customer feedback, and increased sales from current customers. This increased emphasis should improve sales force relationship building effectiveness with current customers leading to increased sales. This emphasis should also improve sales force selling effectiveness with prospective customers by enhancing the listening/problem solving abilities of salespeople, which are crucial for successful selling interactions.
It should be noted that sales management programs do not exist in a vacuum. The success of any shift in emphasis in sales management programs to a consulting emphasis will depend on the appropriateness of this emphasis for the type of customer and industry success determinants. Cespedes (1995) notes that relationship- marketing programs are likely to result in failure if attempted with transaction oriented buyers (p. 201). He also notes that the salesperson may be trained and influenced to work harder and smarter, but this may not result in better sales results because of poor product or pricing policies (p. 220). If the firm's marketing system does not have the capabilities and programs to translate the salesperson's diagnostic consulting activities into product modification/service solutions for the customer, sales force consulting will not produce the expected positive results for the buyer or seller. In addition, a market oriented firm-wide culture is needed to foster sales consulting activities. In addition, Slater and Narver (1995) suggest that a firm-wide learning orientation is also needed to avoid merely adaptive learning, which focuses on expressed needs, as opposed to latent needs. Sinkula et al. (1997) suggest that market orientation is concerned with knowledge producing behaviors, while learning orientation facilitates knowledge questioning values, essentially rewarding salespeople for determining how to provide solutions to customer needs. The resource-based theory of the firm (Hunt and Morgan 1995), which argues that information and knowledge are the key ingredients for success (Bell 1973), provides the theoretical foundation for the link between learning orientation and performance. Farrell study (2000) found that a market orientation relates to learning orientation. In industrial firms, consulting-oriented sales management programs, designed to enhance listening and diagnostic skills, should enhance the learning orientation of the firm and enhance performance.
The marketing system that does effectively translate sales force customer problem-solving capabilities into products with more value to customers may involve some or all of the following: (1) team selling, (2) major account programs, (3) effective formal inter-functional coordination programs/policies activities, (4) cross-training salespeople to develop technical and logistics knowledge, and (5) delegation of more marketing responsibilities to field salespeople.
Study Limitations and Future Directions
Although there was a significant relationship between consulting oriented sales training and firm performance, it is highly likely that the presence of such sales training reflects other internal firm factors such as the quality of management, appropriateness of strategy, firm structure, and the market orientation of the firm. Churchill et al. (1997) noted that the relationship between sales training and sales force results are unclear because there are many factors other than sales training that can influence sales revenue and profits (Honeycutt and Stevenson 1989). Therefore, future research should expand current models to include other internal firm factors.
As an exploratory study, the models presented were simple and did not present probable mediating influences of sales force consulting behaviors and the immediate outcomes of those behaviors, such as enhanced product value for customers. Pelham's (2002) study noted the relationships between consulting oriented sales training, industry factors, consulting behaviors, sales force involvement in product modification, and customer product value. Future studies should investigate these and other potential mediating influences.
It should be noted that the sampling frame of this study was limited to medium to large industrial manufacturing firms; therefore, any conclusions drawn from this study cannot be generalized beyond these types of firms. These industries in this study were chosen because of the expectation that their products/services were sufficiently complex and technical to justify time spent on consulting efforts. These industries were also chosen because there should be some potential for enhancing product/service value to the customer through modification or customization, providing a justification for sales-force consulting. Future research should expand the types of firms studied to determine the potential impact on firm performance from consulting-oriented sales management programs. Pelham's (2002) study indicated the potential for consulting oriented sales management and sales consulting to be productive outside of differentiated industries where both are most prevalent.
Future research should also measure the relationships between consulting oriented sales management programs and variables that are likely to mediate the relationships between the sales management programs and firm performance. These variables include salesperson skill levels, attitudes, and behaviors. Future research should also measure the relationships between consulting-oriented sales management programs and salesperson adaptive selling (Weitz et al. 1986), salesperson customer orientation (Saxe and Weitz 1982), and extent of customer oriented/consulting behaviors (Pelham 2002).
A strength of the study is that it was conducted at the level of the firm. Future studies should also investigate the impact of consulting oriented sales management programs at the individual salesperson level. This research could measure the consequences of such a program on a wide range of consulting and non-consulting sales behaviors. It could also measure the impact of these types of programs on sales person performance, mediated by individual characteristics. Future studies should also measure the impact of consulting oriented sales programs on buyer satisfaction.
Future studies should also expand the measures of consulting oriented sales training, post-sales training, evaluation, and compensation programs to provide a richer understanding of these programs and provide greater guidance to sales managers.
Appendix A
Consulting Oriented Sales Management Items and Variables
C.O.S.T. Consulting Oriented Sales Training (Constant sum=10 or 100%;
0=0%, 1=10%, 10=100%)
What percentage of your sales training time is spent on these areas,
with the sum of your answers equaling 100%:
Time spent learning consulting areas:
KNOW.CUS: knowledge of customer's requirements and uses for your
product.
KNOW.QUE: development of questioning/listening skills.
KNOW.DIA: development of problem diagnosis and problem solving
skills.
Divided by percentage of time learning traditional areas:
KNOW.COM: knowledge of company.
KNOW.PRO: knowledge of company/competitor products.
KNOW.PRS: development of presentation skills.
Consulting content: Wotruba (1980), Good (1993), Chonko et al. (1993),
Puri (1993), Jaworski and Kohli (1993), Narver and Slater (1990)
Traditional content: Erffmeyer, Russ, and Hair (1992)
C.O.E. (Consulting Oriented Evaluation)
Please indicate your level of agreement with the following statements
on a scale from 1 to 7 (1=strongly disagree, 7= strongly agree). Our
sales managers:
1) evaluate salespeople on how well they diagnose their customer
problems.
2) evaluate salespeople on how well they work with technical
employees in solving customer problems.
3) evaluate salespeople on how well they understand their customer's
operations.
4) seek feedback from customers as to how well salespeople solve
customer problems.
5) recognize those salespeople whose efforts have resulted in the
largest cost savings for customers.
C.O.E. based on: Narver and Slater (1990), Saxe and Weitz (1982),
Pelham and Wilson (1996), Pelham (1997A), and Jaworski and Kohli (1993)
P.S.T. (Consulting Oriented Post Sales Training) Please indicate the
extent of time on the following seven point scale (1 =less than 10%,
7 =more than 70%) that is devoted to the following activities:
1. Percent of time a new salesperson spends with experienced
salespersons learning how to maintain good relationships
with customers.
2. Percent of sales meeting time is spent in workshops discussing
salesperson's experiences with solving customer problems.
P.S.T. based on Cooper and Gardner (1993), Evans and Laskin (1994),
Anderson and Narus (1991), Good (1993), and Hawes et al. (1993).
C.O.C.P. Consulting Oriented Compensation Plan: Please indicate on
the following 7 point scale the extent that each element represents
of your compensation program (1=none, 7=a major portion)
1. -- of our commission and bonus system is based on increasing sales
from current customers.
2. -- of our commission and bonus system is based on feedback as to
customer satisfactions.
3. -- of our commission and bonus system is based on customer
retention.
C.O.C.P. based on Cooper and Gardner (1993), Sheth and Sharma (1997),
Narver and Slater (1990)
Appendix B
Industry Control Items and Variables
Justification for usage of these constructs and measures: Sheth (1985),
Spiro and Weitz (1990), Saxe and Weitz (1982), Narver and Slater
(1990), Pelham (1997b), Keats and Hitt (1988), and Porter (1980).
Coefficient alpha and factor analysis data for measures and constructs
are available in Pelham's 1999 and 2002 studies.
Subjective Industry Environment Measures
\EXPEND: For our customers, our company's product represents a (1=
relatively low, 7=very significant) expenditure because of its
cost or the amount of volume purchased.
DIFFERENTIATION: On the following scale (1 = extremely similar,
7=extremely different) please indicate your opinion on the following.
1. How would you characterize the products produced by your industry
in terms of product quality?
2. How would you characterize your industry's customers in terms of
similarity of product purchase criteria?
3. How would you characterize your industry's customers in terms of
similarity of needs and uses for the product?
4. How would you characterize the products produced by your industry
in terms of product features?
Product Differentiation: Average of items 1 and 4.
Customer Differentiation: Average of items 2 and 3.
Objective Industry Environment and Performance Measures
The following measures were drawn from Ward's Manufacturers Directory
or Dun and Bradstreet Industry Norms and Key Business Ratios.
1. AVGROWC: Average growth in capital spending for 1992-1996.
2. AVGROWS: Average growth in dollar sales for 1992-1996.
3. TECHTURB: Coefficient of variation in capital spending for 1992-1996
based on method suggested by Bourgeois (1985).
4. MKTTURB: Same as above using sales for that period.
5. VAEST: Index of value added per establishment compared to all
industries.
6. VAEMPL: Index of value added per employee compared to all
industries.
7. ESTINDEX: Index of establishment growth (base year 1992).
8. SHIPEST: Index of shipments per establishment compared to all
industries.
Composite Industry Variables
(See Pelham 2002 for Reliability Data and/Factor Loadings)
1. GROWTH: Average of AVGROWC, AVGROWS, and ESTINDEX.
2. COMPANY SIZE/VALUE ADDED: Average of SHIPEST, VAEMPL, and VAEST.
3. Market/Technical Turbulence: Average of TECHTURB AND MKTTURB.
SALES GROWTH 2000/1996: Sales growth of respondent firms, comparing
2000 to 1996. Data drawn from Ward's Directory of Manufacturers for
148 firms.
Table 1
Means, Standard Deviations, Coefficient Alphas, and Correlations
of Consulting Oriented, Industry, and Performance Variables
(n=148)
Standard
Mean Deviation Alpha 1
1. Consulting Oriented
Evaluation 4.22 .97 .76 1.00
2. " "
Compensation Plan 2.90 1.33 .65 .33 ***
3. Post Sales Training 2.67 1.21 .68 .24 **
4. Consulting Oriented Sales
Training .87 1.08 --(2) .17 *
5. Differentiation 3.80 1.18 .91 .06
6. Expenditure Importance 4.16 1.49 --(3) .07
7. Industry Growth 1.39 1.18 .96 .01
8. Industry Company Size/
Value Added 130.40 95.98 .94 -.17 *
9. Industry Turbulence 1.51 .62 --(4) .04
10. Sales Growth 1.24 .66 --(5) .18 *
Standard
Mean Deviation Alpha 2
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65 1.00
3. Post Sales Training 2.67 1.21 .68 .18 *
4. Consulting Oriented Sales
Training .87 1.08 --(2) -.07
5. Differentiation 3.80 1.18 .91 -.12
6. Expenditure Importance 4.16 1.49 --(3) -.12
7. Industry Growth 1.39 1.18 .96 -.08
8. Industry Company Size/
Value Added 130.40 95.98 .94 -.01
9. Industry Turbulence 1.51 .62 --(4) .03
10. Sales Growth 1.24 .66 5.00 .13
Standard
Mean Deviation Alpha 3
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68 1.00
4. Consulting Oriented Sales
Training .87 1.08 --(2) .10
5. Differentiation 3.80 1.18 .91 .09
6. Expenditure Importance 4.16 1.49 --(3) -.07
7. Industry Growth 1.39 1.18 .96 -.03
8. Industry Company Size/
Value Added 130.40 95.98 .94 -.05
9. Industry Turbulence 1.51 .62 --(4) .02
10. Sales Growth 1.24 .66 5.00 .11
Standard
Mean Deviation Alpha 4
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2) 1.00
5. Differentiation 3.80 1.18 .91 .15
6. Expenditure Importance 4.16 1.49 --(3) .08
7. Industry Growth 1.39 1.18 .96 .01
8. Industry Company Size/
Value Added 130.40 95.98 .94 -.01
9. Industry Turbulence 1.51 .62 --(4) -.09
10. Sales Growth 1.24 .66 5.00 .18 *
Standard
Mean Deviation Alpha 5
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2)
5. Differentiation 3.80 1.18 .91 1.00
6. Expenditure Importance 4.16 1.49 --(3) .05
7. Industry Growth 1.39 1.18 .96 .07
8. Industry Company Size/
Value Added 130.40 95.98 .94 -.04
9. Industry Turbulence 1.51 .62 --(4) -.12
10. Sales Growth 1.24 .66 5.00 .22 *
Standard
Mean Deviation Alpha 6
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2)
5. Differentiation 3.80 1.18 .91
6. Expenditure Importance 4.16 1.49 --(3) 1.00
7. Industry Growth 1.39 1.18 .96 -.06
8. Industry Company Size/
Value Added 130.40 95.98 .94 -.05
9. Industry Turbulence 1.51 .62 --(4) -.07
10. Sales Growth 1.24 .66 5.00 -.03
Standard
Mean Deviation Alpha 7
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2)
5. Differentiation 3.80 1.18 .91
6. Expenditure Importance 4.16 1.49 --(3)
7. Industry Growth 1.39 1.18 .96 1.00
8. Industry Company Size/
Value Added 130.40 95.98 .94 .05
9. Industry Turbulence 1.51 .62 --(4) .35 **
10. Sales Growth 1.24 .66 5.00 .15
Standard
Mean Deviation Alpha 8
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2)
5. Differentiation 3.80 1.18 .91
6. Expenditure Importance 4.16 1.49 --(3)
7. Industry Growth 1.39 1.18 .96
8. Industry Company Size/
Value Added 130.40 95.98 .94 1.00
9. Industry Turbulence 1.51 .62 --(4) -.07
10. Sales Growth 1.24 .66 5.00 .07
Standard
Mean Deviation Alpha 9
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2)
5. Differentiation 3.80 1.18 .91
6. Expenditure Importance 4.16 1.49 --(3)
7. Industry Growth 1.39 1.18 .96
8. Industry Company Size/
Value Added 130.40 95.98 .94
9. Industry Turbulence 1.51 .62 --(4) 1.00
10. Sales Growth 1.24 .66 5.00 .07
Standard
Mean Deviation Alpha 10
1. Consulting Oriented
Evaluation 4.22 .97 .76
2. " "
Compensation Plan 2.90 1.33 .65
3. Post Sales Training 2.67 1.21 .68
4. Consulting Oriented Sales
Training .87 1.08 --(2)
5. Differentiation 3.80 1.18 .91
6. Expenditure Importance 4.16 1.49 --(3)
7. Industry Growth 1.39 1.18 .96
8. Industry Company Size/
Value Added 130.40 95.98 .94
9. Industry Turbulence 1.51 .62 --(4)
10. Sales Growth 1.24 .66 5.00 1.00
Notes:
(1.) p<.05 level; **=p<.01; ***=p< .001).
(2.) Coefficient Alpha analysis could not be performed for consulting
oriented sales training because all measures of this construct were
constant sum measures (adding up to 100%)
(3.) Coefficient Alpha analysis could not be performed for Expenditure
Importance because this variable only had one indicator.
(4.) Coefficient Alpha analysis could not be performed for Industry
Turbulence because there were only two indicators for this variable.
(5.) Coefficient Alpha analysis could not be performed for the
dependent variable of sales growth because this variables only had
one measure.
Table 2
Influences on Firm Sales Growth 1996 to 2000
Multiple Regression (Standardized Data-Beta Coefficients; n=148)
Control Variables
1. Product Differentiation .23 *
2. Customer Differentiation n.s.
3. Industry Growth n.s.
4. Industry Company Size/Value Added n.s.
5. Mkt./Tech. Turbulence/ n.s.
6. Product Expenditure n.s.
R-Square/Adj. R-Square .04/.01
Model F (p) .99
Model Variables
Consulting Oriented Sales Management
7. Consulting Oriented Sales Training .18 *
8. Consulting Oriented Post Sales Training n.s.
9. Consulting Oriented Evaluation n.s.
10. Consulting Oriented Compensation Plan .18 *
R-Square/Adj. R-Square .13/.06
Change in R-Square/Adj. R-square .09/.06
Model 1 F (p) 1.72 *
Interactions:
Variables 7 * 8 .27 *
R-Square/Adj. R-square .14/.06
Change in R-Square/Adj. R-Square .01/.00
Model 2 F (p) 1.83 *
Variables 9 * 10 .74 **
R-Square/Adj. R-Square .15/.07
Change in R-Square/Adj. R-Square .02/.01
Model 3 F (p) 1.93 *
Note: *=.05 significance; **=.01 significance; ***=.001 significance.
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Alfred M. Pelham (Ph.D., Penn State University) is an Assistant Professor at the College of New Jersey, Ewing, New Jersey.
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