Value-Partitioning of Sales Contribution in Business Markets

Huanhuan Shi, Shrihari Sridhar, Rajdeep Grewal

Production and Operations Management · 2025 · Volume 34 · Issue 11

Abstract

In business markets, sales from customers are often jointly determined by multiple roles, yet firms struggle to quantify individual contribution of each role and the synergies among them. This study applies a value-partitioning approach to separate the sales contributions of customer-focused outside (OS) representatives (reps) and operations-focused inside (IS) reps, and their synergistic effects. It leverages variations in OS–IS combinations to generate individual-level value-added metrics, as well as metrics for dyadic synergies. To address empirical challenges such as limited variations in OS–IS combinations, the study employs empirical Bayes estimation, which provides best linear unbiased prediction (BLUP) estimates. An application using data from a Fortune 500 firm operating in business markets, reveals that the value added by OS reps, IS reps, and their interface have substantial and differential impacts on customer sales. Specifically, an increase of one standard deviation in the effect of OS, IS, or interface synergy improves customer sales by 17.8%, 11.6%, or 14.3%, respectively. Simulations demonstrate the superiority of empirical Bayes over fixed effects estimation in reducing bias, and that the value-added metrics are predictive of future customer sales. This research also illustrates how value-added metrics can be applied to evaluate the impact of sales programs on different sales roles.

Keywords

Business Markets, Empirical Bayes, Fixed Effects, Marketing and Operations Interface, Sales Operations, Sales Reps, Unobserved Effects

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