How Can Managers Utilize Competitive Information to Increase Sales Performance?

Sep 06, 2013, 15:30 ET from American Marketing Association

CHICAGO, Sept. 6, 2013 /PRNewswire-USNewswire/ -- Salespeople often represent the best source of competitive intelligence since they are the primary contact between companies and customers.  This competitive information can often be very rich since it comes directly from customer reactions to selling activities. It is a common yet oversimplified belief that salespeople can achieve better performance when they themselves possess high-quality competitive intelligence. This belief ignores the fact that competitive intelligence of the sales district as a whole can create a collective wisdom that is larger than any one individual.


In a large-scale study involving two major US companies, Michael Ahearne, Son K. Lam, Babak Hayati, and Florian Kraus examine the collection and dissemination of competitive intelligence as well as the formal and informal social networks existing between salespeople and their sales managers.  They find that salespeople are unable to leverage this valuable competitive information without the help of effective sales managers. Much like spokes, salespeople rely on managers to act as hubs that filter, verify, and integrate competitive intelligence, converting this information into useful sales strategies.

This research, appearing the in September issue of the American Marketing Association's Journal of Marketing, shows that not all managers are capable of converting competitive intelligence into sales performance.   Sales managers are often provided accurate, high quality information about competitors.  However, information is also often low quality and unreliable.  By examining the formal and informal social networks formed by managers and salespeople within these organizations, the researchers find that sales managers with strong social networks within the sales force are best at using this competitive information to increase performance. More specifically, sales managers with strong informal networks with their salespeople (informal advisors) are best at synthesizing information and identifying high quality useful information. It is, however, sales managers with strong networks with peer sales managers that are best at using this competitive information in a strategic manner to increase sales performance.    This study provides important information for companies looking to leverage competitive information for strategic advantage.  

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SOURCE American Marketing Association