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Related Experiment Videos

How right should the customer be?

Erin Anderson1, Vincent Onyemah

  • 1Insead, Fontainebleau, France. erin.anderson@insead.edu

Harvard Business Review
|July 19, 2006
PubMed
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Misaligned sales force controls create conflict and reduce productivity. Companies should choose between outcome control (OC) systems, prioritizing customers, or behavior control (BC) systems, prioritizing managers, or find a balance.

Area of Science:

  • Business Management
  • Sales Strategy
  • Organizational Behavior

Background:

  • Sales force controls encompass training, supervision, motivation, and evaluation policies.
  • These controls guide salespeople in making trade-offs between resource allocation and sales objectives.
  • Misaligned controls can lead to salesperson discouragement, reduced productivity, and attrition.

Purpose of the Study:

  • To differentiate between outcome control (OC) and behavior control (BC) systems in sales organizations.
  • To analyze the consequences of conflicting control systems within sales forces.
  • To guide firms in selecting the most appropriate sales control system.

Main Methods:

  • Comparative analysis of OC and BC systems based on author research.

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  • Identification of characteristics defining each control system.
  • Examination of potential negative outcomes arising from control system conflicts.

    • Main Results:

    • OC systems encourage a customer-first approach, while BC systems prioritize manager directives.
    • Conflicting controls, such as encouraging entrepreneurship alongside strict reporting, lead to negative consequences.
    • Significant differences exist in the control systems of companies prioritizing customer outcomes versus managerial oversight.

    Conclusions:

    • Sales force control systems significantly impact salesperson behavior and company performance.
    • A consistent control system, whether leaning towards OC or BC or a balanced approach, is crucial for effectiveness.
    • Firms must carefully consider their strategic priorities to implement the appropriate sales control system.