Improving Performance by Managing Sales Call VolumeMarch 1, 2014
G. Alexander Hamwi, PhD and Brian N. Rutherford, PhD
How can a salesperson improve her performance? This is a question that sales management researchers have spent a great deal of effort and time trying to answer. Researchers have approached the problem from many different perspectives: salesperson, sales manager, and customer. One tried-and-true method for improving a customer’s perception of a salesperson’s performance, though, is to ensure the salesperson consistently meets the client’s expectations. In a buyer-seller relationship, clients form expectations about a variety of things: price, features/benefits, product/service performance, and the level of service after the sale, just to name a few.
While published research examines complex methods of improving a salesperson’s performance by meeting client expectations (e.g., Cravens et al. 1993, Fang et al. 2005), more easily-implemented methods to improve performance have received much less attention, even though they can improve salesperson performance and enhance buyer-seller relationships. Assuming that simplicity is synonymous with ineffectiveness, real estate professionals and agency managers, among others, tend to ignore easily-implemented, simple methods of improving salesperson performance by working to better understand and meet clients’ expectations with more regularity.
The Importance of Face-to-Face Communication
While there are a variety of ways in which clients and sellers can communicate (telephone, fax, email, videoconference, etc.), the strongest, deepest form of communication is the face-to-face sales call. Face-to-face communication is the only form of communication that gives both parties the opportunity to communicate in real-time and to be privy to each other’s non-verbal cues (the most important part of the communication process). In sales calls not conducted face-to-face, salespeople experience a 50% decrease in useful information obtained because they lack the benefit of non-verbal cues. The salesperson loses an additional 10 % of useful information when they cannot hear a client’s voice (Weitz et al. 2007).
Even with the breadth of communication technology available for business use, buyers and sellers still prefer face-to-face communication, especially when the information being communicated is of increased importance and/or sensitivity (Cano et al. 2005). The same holds true in a real estate context. The use of technology in sales communications is preferred more as an enhancement than a primary means of communication (Ferrell et al. 2010).
Our study investigates the impact of meeting the client’s expected number of face-to-face sales calls on behavioral outcomes and the client’s evaluation of the salesperson’s overall performance. Clients have expectations about the number of face-to-face calls they want to receive in a given time period, and achieving this ideal number will improve a client’s perception of the agent’s performance. Meeting these expectations should also lead to increased customer retention and profit.
When a salesperson meets a client’s expectations concerning the number of face-to-face calls s/he wants to receive, what specific outcomes happen? How is the buyer-seller relationship enhanced? Our research, involving 203 customers of a Fortune 100 firm selling high tech systems, confirmed the following results:
- Higher Perception of Salesperson’s Commitment → Greater Client Trust
When a salesperson meets a client’s expectations concerning the number of face-to-face sales calls s/he wants to receive, the client perceives that the salesperson is committed to the relationship. In turn, the client’s trust in the salesperson increases.
- Higher Perception of Salesperson’s Commitment → Greater Client Commitment
One party’s perceived commitment influences the other party’s actual commitment. If a client perceives a salesperson as committed to the relationship because the salesperson meets the client’s expectations concerning the appropriate number of sales calls, the client will be more committed to the relationship (Anderson and Weitz 1992).
- Greater Client Satisfaction → Greater Client Commitment
When a salesperson meets a client’s expectations concerning the ideal number of face-to-face sales interactions in a given time period, the client will be more satisfied with the salesperson. Many studies have shown that increased satisfaction leads to increased commitment (e.g., Brown and Peterson 1994; Johnson et al. 2001); and satisfaction reinforces the client’s decision to participate in a relationship with the salesperson, which over time leads to increased client commitment (Fornell 1992).
- Greater Client Trust → Greater Client Commitment
When a client commits to a relationship, the client is making himself vulnerable to the salesperson. The client relies on the salesperson to interpret and evaluate the client’s wants and needs, as well as find satisfactory solutions to problems. If the salesperson has opportunistic intentions, the client could suffer harm. Clients will be more committed to salespeople who have earned their trust (Morgan and Hunt 1994).
- Greater Client Commitment → Higher Perception of Salesperson’s Performance
When a client is committed to a relationship, s/he trusts the salesperson, is satisfied with the salesperson, and perceives the salesperson to be committed to the relationship, as well. The client will naturally have a higher perception of salesperson performance than in a case where there is a disconnect between what is expected and what actually occurs. Confirmation of expectations has a positive influence on salesperson performance.
Implications for Real Estate Professionals
When a real estate professional contacts a client with the expected frequency (as perceived by the client), the client is more committed to and more trusting of the agent. Additionally, the relationship with the client is more likely to continue long-term. When the agent reaches the ideal number of face-to-face interactions, the client perceives the salesperson as being more committed to the relationship and also evaluates the salesperson’s performance more positively.
Results of our study show that meeting a client’s expectations concerning number of face-to-face interactions can result in an increase in client’s perception of salesperson performance by 5%. A 5% increase in perceived performance considered over time across the entire customer base of an agent (or his/her firm) could greatly improve financial performance. Reicheld and Sasser (1990) found that a 5% increase in performance can lead to an almost 100% increase in profits. The minimal amount of effort necessary to understand a client’s expectations and respond accordingly makes it clear that this small effort is worth putting out.
There are several ways in which customer expectation data can be obtained. Call reports can be reviewed to see how often the client is called on. Many managers already monitor the call frequencies of their sales force through a CRM (customer relationship management) system. Next, an agent or manager can determine the client’s desired level of face-to-face interactions. This information can possibly be obtained by: 1) having the agent ask the client, 2) using a customer satisfaction survey, and/or 3) the manager contacting the client directly. While there will be some expenses involved in obtaining this information, the costs may be minimal considering the possible long-term increases in profitability.
Once agents and/or firm managers obtain data regarding customer expectations, they should consider the costs of making additional face-to-face calls. Recent studies estimate the cost of one face-to-face sales call ranges from $400-$1200 (Weitz et al. 2007). Prior research has also suggested using the Customer Lifetime Value framework (Reinartz and Kumar 2003; Rust et al. 2004; Dixon 2010) to determine which client-supplier relationships are worthy of increased attention.
Managing face-to-face call volume is a simple strategy that promises key payoffs for the agent, the manager and the client.
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About the Authors
G. Alexander Hamwi, PhD
Assistant Professor of Marketing, Missouri State University
Dr. Alex Hamwi (PhD - Georgia State University) became an Assistant Professor of Marketing at Missouri State University in Fall of 2009 after receiving his PhD in Marketing from Georgia State University. Dr. Hamwi's research interests include sales management and behavioral and environmental aspects of sales and ethics. Dr. Hamwi's work has been published in the Journal of Personal Selling and Sales Management, the Journal of Business Research and the Journal of Business and Industrial Marketing.
Brian N. Rutherford, PhD
Assistant Professor of Marketing and Professional Sales, Kennesaw State University
Dr. Brian Rutherford (PhD - Georgia State University) received his PhD from Georgia State University in 2007 and then joined the faculty at Purdue University. In 2011, Dr. Rutherford joined the faculty at Kennesaw State University. Dr. Rutherford has published over thirty peer-reviewed journal articles, found in journals such as the Journal of Personal Selling and Sales Management, the Journal of Business Research, the Journal of Marketing Theory and Practice and the Journal of Business and Industrial Marketing.