Factors affecting effectiveness of salesperson practices and business performance of insurance businesses in Thailand.

Author:Jirawuttinunt, Sumittra
Position:Report
 
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1. INTRODUCTION

Due to today's highly marketing competition, it can be argued that sales organizations are challenged with more effective and efficient sale management strategy than its competitors in order to win in the marketplace (Olson, Cravens, and Slater, 2001). Hence, one of the primary goals of most sales managers is to increase the performance of their salesperson, thereby increasing the firm's total sales. According to Kuster and Canales (2011), salesperson is one of the most important tools to a firm's survival by virtue of their role between the firm and their customers. In addition, salesperson plays a key role in the formation of long term buyer-seller relationships. In a selling environment, salesperson practice effectiveness attracts considerable research attention because of its importance to achieving superior salesperson performance (Paparoidamis and Guenzi, 2009). Managers and researchers are interested in how to develop more effective selling strategies for increased sales performance which contribute to competitive advantage. It is reasonable that some more research is needed to understand possible determinants of salesperson practices such as sale planning, adaptive selling, use of technical skills and knowledge, and customer-oriented selling. However, most of the previous research in this area has clarified determinants only a few salesperson behaviors, and also examine the influence of personal characteristics, with little predictive the relationship of sales' behavior effectiveness and business performance. Moreover, there has been question about the relationships between salesperson practices effectiveness and business performance that researchers to date have not sufficiently examined. Based on the importance and necessity of sales strategy discussions, this study tries to make a contribution to the sales management literature by investigating salesperson practice effectiveness antecedents and the outcomes in term of business performance. As such, the specific activities of salesperson and the strengths identified here could contribute to increasing the effectiveness of salesperson activities.

Salesperson practice effectiveness in this research is defined as well perform of various activities of salesperson in their job responsibilities which increase a firm's competitiveness and its components are sale planning, ability to adapt selling, use of technical knowledge and skills, and customer-oriented selling. This research suggests that the important factors such as salesperson experience, reward orientation and training & development orientation affect salesperson practice effectiveness which increases business performance. Previous research has found that effective salesperson behavior produces superior outcome which improve better sales organization performance (Baldauf et al., 2001). This study focuses on how the salesperson's behavior influences business performance and the factors which affect salesperson practice effectiveness especially in insurance industry because salesperson behaviors and management practices are likely the key drivers of insurance company success (Chen and Mau, 2009). Moreover, this article is of great value to the financial service sector since it shows how one of financial service business such as insurance company gains business value from salesperson practices.

Absolutely, the main purpose of this research is to increase a clearer understanding of several key determinants and outcomes of the salesperson practice effectiveness. By doing so, we will contribute to the marketing literature by reducing the existing gap and show companies insights how to improve sales behavior in insurance company of Thailand. Moreover, the moderating variable as goal achievement focus is also tested. The main research questions is how does salesperson practice effectiveness affect business performance?, and How do sales experience, reward orientation and training & development orientation affect salesperson practice effectiveness in insurance company in Thailand? In addition, how does goal achievement focus moderate the relationships in the model?

The remainder of this paper is organized in the following manner. First, a review of the relevant literature leads to the proposed model and associated hypotheses. Next, the research methodology is discussed and the hypothesized interaction relationships are tested using the OLS regression analysis approach. Finally, the study findings are presented followed by a discussion of theoretical and managerial implications.

2. RELEVANT LITERATURE REVIEWS AND RESEARCH HYPOTHESES DEVELOPMENT

Figure 1 illustrates the hypothesized relations among the antecedents of salesperson practices, salesperson practice effectiveness and business performance. In this model, salesperson practice effectiveness aspects such as sale planning focus, ability to adapt selling, use of technical knowledge and skill and customer-oriented selling are held to be positively associated with business performance. In addition, the salesperson antecedents used in the model consists of sales experience, reward orientation and training & development orientation. In turn, each of salesperson antecedents is hypothesized to be positively associated with each of salesperson practices effectiveness. Moreover, goal achievement focus as moderating effect between salesperson practices antecedents and salesperson practice effectiveness relationships are also examined.

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2.1 The Effectiveness of Salesperson Practices

Salesperson practices based on the foundation of Babakus et al. (1996) is conceptualized as the effective activities of salesperson in performing their job responsibility. Accordingly, Boles et al. (2000) show that salesperson behavior concerns with age, education, previous employment, sales experience, reward orientation and vocational esteem. Moreover, Baldauf and Cravens (2002) indicate that the activity of salesperson effectiveness comprise behavioral performance such as use of technical knowledge, adaptive selling, sales planning and sale support. From a number of prior literatures, effectiveness of salesperson practices in this research consists of planning focus, ability to adapt selling, use of technical knowledge and skills and customer- oriented selling. These four categories are important because they represent various aspects of salesperson practices of insurance sector for Thailand perspective. Several studies argue that salesperson effectiveness plays an important role as strategic tool that facilitates the business strategy to create competitive advantage and, ultimately, increase business performance (i.e. Abed and Haghighi, 2009). In addition, this research examines three antecedents including sales experience, reward orientation and training & development on the relationships in the model. In order to clearly investigate the relationships among salesperson practice effectiveness, antecedents and outcomes, this research describes salesperson practice effectiveness in four activities as follow:

Sales Planning Focus. The term "sales planning" refers to the tactical plan of salesperson that provides management to strategically direct its business to achieve competitive advantage (Thome et al., 2012). Sales planning is an important mission with many challenges in complex selling task. In rapidly growing industries, it is more likely that expanding and rapidly changing customer base increase salesperson's sales planning requirement. Therefore, it is critical to develop plan to reduce uncertainty for future sales activities by using sales calls, select strategies and coverage and synthesize a wide range of information to achieve sales objectives and contribute to effectiveness of salesperson practices (Baldauf and Cravens, 2002). Ivert and Jonsson (2010) study the advanced planning and scheduling systems in sales and operations planning and reveal that the activities concerning of planning efficiency can gain more benefits. Likewise, the study of Thome et al. (2012) show that sales and operations planning is related to firm performance. In addition, prior finding of Baldauf and Cravans (2022) confirm that high sales planning increases sales organization effectiveness. Thus, it leads to the hypothesis proposed as below:

Hypothesis 1: Sales planning is positively associated with business performance.

Ability to adapt Selling. Ability to adapt selling refers to the salesperson's ability to modify or change sales behavior when interacting with customer (Baldauf and Cravens, 2002). Adaptive selling may occur with specific case of selling such as complex buying tasks and little conflict of customer by using unique sales presentation for each customer. The basic of adaptive behavior is perceived information about the nature of the selling situation such as reactions to questions, comments, and body language (Roman and Lacobucci, 2010). Accordingly, research largely concludes that adaptive selling improves salesperson performance (i.e. Abed and Haghighi, 2009). A study of Kim (2010) shows that the more adaptive selling of salespersons can do to meet customers' needs, the higher the service quality perceived by customers. Also, the study of Franke and Park (2006) claimed that adaptive selling increases job satisfaction and salesperson performance. In addition, Johlke (2006) reveals that adaptive selling techniques are related to increase firm performance. Thus, it leads to the hypothesis proposed as below:

Hypothesis 2: Ability to adapt selling is positively associated with business performance.

Use of Technical Knowledge and Skills. Use of technical knowledge and skills refers to behaviors of salesperson in providing information about the design and specification of product or service and the applications and functions of product and service (Baldauf and Cravens, 2002). It has been acknowledged that sales skills are one of the key determinants that...

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