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        Research: Many sales people over-invest in pursuit of big account

        September 16, 2015

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        sales dartsLanding that major account often comes with a fat paycheck and esteem around the workplace. But is taking a chance on catching the big fish worth blowing off many easy-to-catch, smaller deals, and potentially coming up empty-handed? Jeremy Wolter, associate professor in marketing at the Harbert College of Business, believes that many sales people “over-invest in their pursuit of the (big) account.” “If a salesperson is trying to optimize their resource allocation, they are well-served by going after smaller accounts because it will be easier to accurately assess the opportunity,” said Wolter, who is co-authoring the paper, “I think I can … I think I can: The impact of perceived selling efficacy and deal disclosure on salesperson escalation of commitment.” wolter“Typically, sales people are not good at allocating resources to maximize account profitability,” Wolter said. “Instead, sales people often focus on winning accounts and allocate resources past a point of diminishing returns because of an escalation of commitment (tendency to try harder if signals suggest the odds of winning the account decrease).” Whereas major accounts could allow sales people to make their monthly quota in one deal and reaching sales goals, heavy-hitting deals come with a price. More time. More energy. More everything at the risk of losing smaller deals. A sales person has only so many resources to allocate toward prospects. Choose wisely. “There are many ways a sales person can talk his or her self into devoting resources towards a bad deal,” Wolter added. “Also, seek an outsider’s perspective (i.e., their sales manager) to obtain a more objective assessment of the situation. Interestingly, sales people who are very self-confident are the ones least likely to rely on the advice of their sales manager but are also the ones most likely to fall victim to escalation of commitment. “It is very hard for a salesperson to make the decision to give up on a potential client,” said Wolter, who believes big accounts should still be pursued. “But sales people should be open with their manager and seek their advice on calculating the odds of winning.”