March 21, 2017

Shi Research Analyzes Approach to Sales Rep Turnover

Shi Research Analyzes Approach to Sales Rep Turnover
Motivated by solving business problems, Dr. Huanhuan Shi, assistant professor of marketing at the University of Nebraska–Lincoln College of Business Administration, specializes in analyzing the modern sales workforce. Shi worked as a customer relationship manager in the banking industry in China prior to coming to the United States to earn her Ph.D. at Penn State University’s Smeal College of Business in 2016. She joined CBA last fall and in March 2017, published, “Sales Representative Departures and Customer Reassignment Strategies in Business-to-Business Markets,” in the Journal of Marketing, the top ranked publication in the marketing field.

The article examines the impacts a company’s client base faces when sales representatives leave a firm. Shi knows first-hand the importance of maintaining good customer relations based on her previous work experience.

“We collected data on significant problems B2B (business-to-business) firms face,” said Shi. “The biggest problem we identified is high turnover rate of sales persons within sales teams. Sales people constantly interact with customers, so when they leave the concern is customers will either go with them or be less satisfied with the new representative.”

To her surprise, little research had been conducted in the area. She worked with a leading U.S.-based distributor of electrical component products to collect data analyzing replacement strategies following sales staff turnover.

Shi teaching at CBA
Shi teaching at CBA
“We looked at two dimensions of replacement strategy. One opinion is to find a high-performance sales representative to positively manage the customer relationship, and another common practice is to recruit a new sales person with a similar background to the one who left. It turns out, the similar sales representative performed better in our study than the high performance representative,” she said.

Shi pointed out the result applies only to the one company studied. She believes the value of her research exists more in the method than the results.

“We used a database approach to quantify replacement strategy. Sales managers often use intuition, but never had research to back up their practices. We wanted to recommend a best practice, and now have a research method in place others can use,” she said.

Shi wants to continue her sales research by studying sales teams. Sometimes sales people want to team-up to serve one customer as opposed to individual-based sales.

“We know variation occurs and in some cases it might be better for sales people to team up,” said Shi. “We also examine skill combinations between two or three person sales teams to determine how to best help customers.”

The move to Nebraska gives Shi an opportunity to continue her research.

“The sales center here is a tremendous resource. The overall research environment at Nebraska is excellent, including expertise in other departments. My research quantifies the impact of sales transition in terms of revenue so it is related to finance. I enjoy bridging the gap between marketing and finance, and received a CFA (chartered financial analyst) designation earlier in my career,” she said.

Shi, who teaches marketing analytics (MRKT 350), partnered with Dr. Gary Lilien, Distinguished Research Professor of Management Science at Penn State University, Dr. Rajdeep Grewal, The Townsend Family Distinguished Professor of Marketing at the University of North Carolina, and Dr. Shrihari Sridhar, associate professor of marketing at Texas A&M University, on the Journal of Marketing publication.