Hunting for new customers: Assessing the drivers of effective salesperson prospecting and conversion

Abstract

Researchers and practitioners acknowledge that sales prospecting plays an important role in new customer acquisition. Yet, rigorous academic research on prospecting is virtually nonexistent. In this study, we examine the salesperson’s role at the front of the sales funnel which involves prospecting for leads (prospecting efficacy; PE) and converting those prospects into customers (conversion efficacy; CE). Based on the Motivation-Opportunity-Ability framework, we test the relationships between several drivers of PE and CE via an NBD and Beta regression model. First, we discover an implicit trade-off between PE and CE, implying a ‘sweet spot’ that maximizes new customer acquisition. Also, more experienced salespeople acquire fewer new customers than those with less experience. Higher advertising support and extrinsic rewards improves CE to a greater extent for more-, versus less- experienced salespeople, which suggests that incremental increases in advertising budgets and incentive rewards are better allocated in favor of more experienced salespeople.