The impact of macroeconomic conditions on sales performance in Nigeria

Abstract

In emerging markets, sales teams often find it difficult to meet their quotas because they face a range of challenges as they strive to achieve their revenue targets. Identified challenges include the caprices of the macroeconomy. A clear understanding of macroeconomic factors that affect sales performance, therefore, is crucial for sales and marketing managers because the state of the macroeconomy can create winners, as well as, losers. For this reason, optimizing sales performance may call for a more rigorous attention to the character of the macroeconomy. This study evaluates the full spectrum of macroeconomic determinants of sales performance by importing macroeconomic perspectives into sales performance research, then interpreting the significance of these macroeconomic drivers on sales performance within the context of topical issues in the Nigerian economic landscape. The study employs a dynamic panel data approach to gain insights into the macroeconomic indices–sales performance nexus across a broad range of the 20 most active companies on the Nigerian Stock Exchange over the period 2005-2014. The study shows that exchange rates, oil prices, domestic credits, total consumption expenditures, and federal tax revenues have a significant impact on sales performance. Thus, for sales teams to succeed, their sales plans must reflect the macroeconomic conditions of the Nigerian business environment. The swiftest road to success, therefore, is to dump the ‘business as usual’ mindset, which can speedily sink any corporation. Rather than adopting a relaxed stance and waiting for the macroeconomy to mend, sales teams can be innovative in the marketing of their companies’ products and services vis-à-vis the macroeconomic environment. The results of this study should be beneficial to sales teams and companies generally, as they advance new tactics to improve sales performance. Additionally, by importing key macroeconomic perspectives into sales performance research, this study helps academics, economists, investors, and other stakeholders understand the macroeconomic drivers of sales performance in emerging markets such as Nigeria.