Why Do Salespeople Quit? An Empirical Examination of Own and Peer Effects on Salesperson Turnover Behavior

Abstract

Salesperson turnover can have a negative overall effect on a firm. Research on salesperson turnover has conceptually studied the consequences of voluntary turnover on a firm. However, little empirical research has investigated the antecedents of salesperson turnover—specifically, the role of own effects (relative performance, customer satisfaction, and goal realization) and peer effects (peer performance variance and turnover). Therefore, the authors propose a framework to assess the influence of own factors (through identity theory) and of peer factors (through social identity theory) on salesperson turnover. Using a proportional hazard model implemented on data consisting of 6,727 salespeople over two years, the results suggest that in addition to own behaviors, managers need to pay attention to peer behaviors because peer turnover (voluntary and involuntary) greatly increases a salesperson's turnover probability. Furthermore, the results indicate that peer effects have a greater impact than own effects. This research has implications for sales force management because it helps managers (1) identify a salesperson's turnover risk, (2) diagnose the drivers of turnover behavior, and (3) build strategies to prevent salesperson turnover.