Publication Details

Lu, Q., Voola, R. & Akter, S. (2015). Salespeople's learning by doing and pricing strategy. In A. Hinterhuber & S. Liozu (Eds.), Pricing and the Sales Force (pp. 59-74). Abingdon: Routledge.


Understanding the salespeople’s dynamic learning process is critical in effective sales force management. Particularly, the ability to understand the customer intimately is critical in facilitating sales people develop capabilities that allow them set prices that best meet the needs of the customer and the company objectives. To the best of our knowledge, there are no studies structurally modelling salespeople’s learning by doing. We develop a Bayesian learning framework to capture salespeople’s learning by doing. In doing so, we argue that for sales organizations who delegate pricing authority to sales people, it is imperative that they understanding how their sales people learn by doing. Our framework allows us to estimate; 1) salespeople’s learning from successful and failed cases separately; and 2) salespeople’s prior skills, (i.e. their skills when they first join the firm) and potential skills (i.e. the ultimate skills that salespeople potentially can reach through learning by doing). We illustrate our approach by analysing historical transaction data of a large multinational software company. We argue that understanding of sales people learn by doing is critical in understanding customer facing strategies including pricing.

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