A practical approach to sales compensation: What do we know now? What should we know in the future?

Doug J. Chung, Byungyeon Kim, Niladri B. Syam

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Personal selling represents one of the most important elements in the marketing mix, and appropriate management of the sales force is vital to achieving the organization’s objectives. Among the various instruments of sales management, compensation plays a pivotal role in motivating and incentivizing sales agents. This monograph reviews the evolution of research in sales compensation and discusses future trends and opportunities. Specifically, it examines the managerial relevance of the theoretical foundations, discussing the underlying reasons for their applicability (or lack thereof) in practice. Furthermore, the monograph surveys recent empirical methods—including field experiments and structural econometrics—that are practical for analyzing sales agents’ behavior under various compensation systems. It also discusses prominent areas of future research in the midst of a changing sales environment.

learning, and artificial intelligence can affect sales strategy formulation and, thus, sales compensation systems to better motivate and incentivize an organization’s sales force.

Original languageEnglish (US)
Pages (from-to)1-52
Number of pages52
JournalFoundations and Trends in Marketing
Volume14
Issue number1
DOIs
StatePublished - 2020
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2020 Now Publishers Inc. All rights reserved.

Keywords

  • Artificial intelligence
  • Field experiments
  • Machine learning
  • Principal-agent theory
  • Sales compensation
  • Sales management
  • Sales strategy
  • Structural econometrics

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