Managing Salesforce Product Perceptions and Control Systems in the Success of New Product Introductions

Abstract

Given the importance of new products, firms may be prone to “over-manage” sales personnel by using behavior-based control systems that dictate the performance of particular activities related to the introduction. Such controls may be especially tempting given that favorable salesperson product perceptions actually yield less effort on the new product, and behavior-based controls can offset this tendency. However, using longitudinal data from a sample of 226 pharmaceutical salespeople, along with external ratings from customers and archival measures of effort and sales performance, we demonstrate that such a strategy is short-sighted. Behavior-based controls constrain a salesperson’s ability to appropriately allocate effort across his or her customer base, negatively impacting customer product perceptions and, ultimately, new product sales. In contrast, outcome-based control systems enable salespeople to work smarter, and their corresponding effort on behalf of the new product has a more positive effect on customer product perceptions and new product sales.