Why do Salespeople Quit? An Empirical Examination of Own & Peer Effects on Salesperson Turnover Behavior

Salesperson turnover can have a negative overall effect on a firm. Research on salesperson turnover has conceptually studied the consequences of voluntary turnover on a firm. However, there has been little empirical research investigating the antecedents of salesperson turnover, specifically the role of own (relative performance, customer satisfaction, and goal realization) and peer effects (peer performance variance and turnover). Therefore, we propose a framework to assess the influence of own factors (through identity theory) and of peers factors (through social identity theory) on salesperson turnover. Using a proportional hazard model implemented on data consisting of 6,727 salespeople over two years, our results suggest that in addition to own behaviors, managers need to pay attention to peer behaviors as peer turnover (voluntary and involuntary) greatly increases the salesperson's turnover probability. Further, the results indicate that peer effects have a greater impact than own effects. This research has implications for salesforce management as it helps managers a) identify a salesperson's turnover risk, b) diagnose the drivers of turnover behavior, and c) build strategies to prevent salesperson turnover.