The Impact of Contests on Salespeople’S Customer Orientation : An Application of Tournament Theory

Abstract

Although experts agree on the importance of strong customer relationships, sales force management practices often result in behaviors that weaken relationships. The current use of sales contests with quantitative objectives in relation to revenue or profit margins testifies to this divergence. Sharma (1997) emphasizes the need for a better understanding of the impact of sales contests on customer satisfaction and salespeople’s customer orientation because of the importance of strong customer relationships. Tournament theory, a mid-range theory developed in economics, provides a framework for understanding why and how contests may influence customer orientation. In an experiment examining four characteristics of sales contests, we explore which types of sales contests best preserve customer-oriented behaviors. The findings provide insight regarding contest design factors that support a strong customer orientation.

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