In the Eye of the Beholder: An Analysis of the Relative Value of a Top Sales Rep Across Firms and Products

We ask the question, “when should the most highly skilled salespeople sell the best products?” Our main result is that the highly skilled reps should sell better products when the task is very complex and worse products when the task is very simple. This is shown using a general analytical model of selling in which sales are a joint function of the salesperson’s skill and the complexity of the selling task. Complexity varies across products and industries. Intuitively, when the selling task is complex, few salespeople of any level of ability will be successful with a low-quality product. Therefore, the high-skill rep’s value is higher on the better product. Conversely, when the task is simple, salespeople of any ability can sell the better product fairly easily so the high-skill rep’s impact is more pronounced on the worse product. This general result offers insight into many key problems: Which salespeople should we hire? How should we organize our salespeople? How should we allocate training funds? We show that the insights hold for salespeople that either create value or simply persuade the customer about the product’s value. Finally, we contrast this set of questions with the question of how many salespeople the firm should hire. We find that the firm that has the biggest sales force does not always have the best. (Sales Management; Selling; Hiring Policies; Game Theory; Agency Theory )