Retaining Talented Salespeople

Abstract

For any marketing organization that relies on personal selling, it is vital to attract and retain successful salespeople who fit well with the organization. In this paper, we examine how salespeople learn about their fit with the organization and about their future performance and how they use this to make the decision to stay or leave. We depart from the extant sales management literature on retention/turnover in that we model individual sales employees’ stay/leave decisions using a structural model that accommodates forward looking behaviour. In our application, the dynamic model explains turnover better than a model that does not consider forward looking behaviour. Our approach also immediately yields several insights about the roles of person-organization fit and sales performance satisfaction in sales force turnover. Overall, and accounting for person-organization fit, we find that good performance encourages the salesperson to stay longer with the selling organization. Most importantly, the relative importance of person-organization fit and salesperson performance in determining turnover varies over time. In particular, person-organization fit plays a bigger role at the beginning of a salesperson’s tenure, whereas satisfaction associated with selling performance plays a larger relative role at later stages.