A new model for measuring salesperson lifetime value

Abstract

Purpose

The purpose of this paper is to propose a new salesperson valuation model. This paper presents a calculation method for estimating both the individual lifetime value of a salesperson and the sales force equity.

Design/methodology/approach

This is a conceptual paper supported by a case study.

Findings

The authors contribute to the literature by operationalizing the salesperson lifetime value concept and introducing new important aspects in comparison with previous discussions, including peer effect, recruitment/hiring cost and termination costs.

Originality/value

This manuscript theoretically and practically contributes to personnel value management in the organization and sales force financial control. The authors introduce peer effects, hiring/recruitment costs and termination costs, which are missing as a set in previous research. In addition, this paper offers a simple but robust model to practitioners’ use.

Citation

Farías, P., Torres, E. and Mora Cortez, R. (2017), "A new model for measuring salesperson lifetime value", Journal of Business & Industrial Marketing, Vol. 32 No. 2, pp. 274-281. https://doi.org/10.1108/JBIM-09-2016-0205