Engaging the sales force in digital solution selling: how sales control systems resolve agency problems to create and capture superior value

Abstract

Purpose Digital solutions (DS) that build on recurring revenue models (RRMs) offer new opportunities to continuously create and capture superior value. However, many firms fail to engage their sales force in digital solution selling (DS selling), leading to agency problems that receive little attention in literature. This study aims to examine the drivers of agency problems that surface in the transition toward DS selling and the sales control systems that resolve these problems. Design/methodology/approach The authors conducted a qualitative, inductive study. Data were collected from interviews with 72 marketing and sales managers representing 53 industrial firms transitioning toward DS selling. Findings DS selling is subject to adverse selection and moral hazard caused by motivation-related, opportunity-related and ability-related drivers. Input, capability, activity and outcome controls – detailed in this study – can resolve these agency problems. Research limitations/implications The limitations of this study’s methodology and scope suggest several directions for future research. Methodology-wise, the authors mainly relied on cross-sectional interview data from informants in Central and Northern Europe. Scope-wise, more research is needed on the capabilities, processes and steering instruments supporting DS sales. Finally, only now do the authors begin to understand which compensation plans motivate DS selling. Practical implications The controls identified in this study help managers to steer their sales force in DS sales. Originality/value To the best of the authors’ knowledge, this study is the first to investigate DS sales control systems. Thereby, the authors enhance prior understandings of solution selling, agency problems and sales control systems.