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When you want your friends to also be customers

Monday, February 3 2020 01:10pm

Lisa BeelerLisa Beeler is an assistant professor of marketing and the director of internships, diversity and inclusion for the Ralph and Luci Schey Sales Centre. Her research examines the tension that may arise when salespeople attempt to simultaneously perform the role of salesperson and friend. Beeler shares that everyone resonates with this research because we all have friends who invite us to one of those home parties or try to sell us something on Facebook. 

What is this research about?

Over 18 million Americans reported selling a good or service to a friend in 2018, compared to 13 million in 2011 (Direct Selling Association 2018). As of today, direct selling is a 34.9-billion-dollar industry (Direct Selling Association 2018), and continues to grow with establishing new companies like Rodan and Fields, Young Living, and Natura. With the expanding use of social selling platforms (e.g., Etsy, Posh, and Gumroad) as well as the direct selling industry, the number of salespeople tasked with turning personal friendships into business relationships continues to rapidly rise.

Previously researchers have focused on selling contexts where business relationships evolve into friendships, as opposed to friendships evolving into business relationships. This research suggests the evolution, or sequencing, of the relationship is critical to understanding the stress a salesperson may experience when attempting to turn a friend into a customer. Given the inherent tension that exists between simultaneously being a friend and a salesperson, this research explores the impact of organization identification, or belongingness to the firm, on the salesperson’s perceived friend-selling stress and important salesperson outcomes (e.g., turnover, customer acquisitions).

The results suggest that organizational identification reduces the conflict associated with selling to friends, especially when salespeople are tasked with selling to their friends at low frequencies (products that don’t need to be replenished a lot). Organizational identification also decreases the salesperson’s role ambiguity that arises when navigating two roles (i.e., friend and salesperson) at the same time, and this is especially true for those salespeople with large networks of friends who also sell direct selling products/services. As expected, friend-selling conflict increases the likelihood that the salesperson will leave her job, but surprisingly salespeople with higher levels of conflict are better at acquiring customers.

What are the key managerial takeaways of this research?

  1. The conflict salespeople experience when attempting to turn a friend into a customer can actually increase customer acquisition, suggesting some levels of salesperson stress are beneficial in the early stages of the sales process.
  2. When salespeople must attempt to sell to their friends very frequently, firms should not rely on the salesperson’s organizational identification (or belongingness to the firm) as a means to achieve desired outcomes.
  3. Firms should incentivize (e.g., financially) network building.

What is the most interesting finding?

The most interesting finding with the research is that the more an employee identifies with their company, the less conflict they feel about selling to friends — but this can cause some issues because when selling to friends, a salesperson needs to recognize that they must tread carefully (perceive some possible conflict).

Salespeople who recognize conflict are more likely to acquire customers, but also more likely to quit their job so companies need to make sure they are providing support for these salespeople who are attempting to navigate being a friend and a salesperson.


 

What's Next for Professor Beeler?

Currently, Beeler is researching the psychological momentum of salespeople (how past sales "wins" influence salespeople’s assessments of future deals closing) and how customers cope with salespeople’s transgressions (by either seeking revenge, forgiving, or avoiding these salespeople). To learn more about Professor Lisa Beeler, visit her COB Directory Profile.