The Joint and Multilevel Effects of Training and Incentives from Upstream Manufacturers on Downstream Salespeople’s Efforts

Abstract

Manufacturers frequently face the challenge of motivating distributor salespeople to focus efforts on their products rather than competitors’ products. The present research explores two mechanisms that manufacturers use to address this challenge: training and incentives (spiffs). The authors find that the impact of these mechanisms on distributor salespeople’s efforts (toward a manufacturer’s products) largely depends on the extent to which manufacturers also provide training and incentives to distributor sales managers. More specifically, providing greater incentives to distributor sales managers undermines the relationship between their salespeople’s training and effort but enhances the relationship between their salespeople’s incentives and effort. Furthermore, greater sales manager training enhances the impact of salespeople’s incentives on effort; however, greater salesperson training undermines the relationship between salesperson incentives and effort. Thus, this research shows that the combination of mechanisms (training and incentives) and the levels at which manufacturers provide them (distributor salespeople and sales managers) can have different implications for distributor salespeople’s efforts.