Effect of salespeople's acquisition–retention trade-off on performance

Abstract

This research examines the impact of the acquisition–retention resource allocation at the individual salesperson level – that is, the proportion of their time dedicated to acquisition versus retention activities – on their sales performance. We extend prior research that investigates the acquisition–retention trade-off below (i.e., customer value approach) or above (i.e., firm portfolio approach) the salesperson's perspective by also incorporating many ‘within-firm’ factors that are critical to capturing the contingent nature of the allocation decision. The results suggest that firms can double their sales gains by implementing a trade-off strategy that customizes the acquisition allocation at the salesperson level. Using matched triadic data gathered from 227 salespersons, 106 supervisors and the seller's database, the authors find an inverted U-shaped linkage between the proportion of time allocated to acquisition activities and sales performance. Moderation analyses show that salespeople's optimal acquisition allocation depends on their knowledge breadth and job commitment, their supervisor's experience and job commitment and the quantity and quality of the prospects in their relationship portfolio.