Huanhuan Shi, Shrihari Sridhar, Rajdeep Grewal, & Gary Lilien
Sales Representative Departures and
Customer Reassignment Strategies in
Business-to-Business Markets
When a sales representative (rep) leaves a business-to-business
fi
rm, a crucial link with the rep
’
s customers becomes
severed. The
fi
rm reassigns those customers to different sales reps (either existing reps or new hires) in a manner that
mitigates potential sales losses. What causal effect do sales rep departures have on customer-level revenue, and
which sales rep replacement strategies are more effective? Using data from a
Fortune
500
fi
rm and a difference-in-
differences analysis with correction for selection bias, the authors show that sales rep transitions lead to 13.2%
–
17.6%
losses in annual sales. New hires are less effective than existing sales reps in mitigating sales losses. Existing sales
reps who are similar (vs. dissimilar) to the departing reps (in terms of past industry experience) are more effective in
mitigating sales losses; however, reps with high past performance do not exhibit greater ef
fi
cacy for mitigating sales
losses than reps with average or low past performance. The analysis presents means to quantify the economic
consequences of losing a sales rep and to determine how to reassign customers to sales reps according to the
resulting economic impact