Our research reveals actionable ways for managers to (1) successfully manage salespeople’s avoidance of relatively large opportunities, (2) better understand the role of conversion uncertainty in salesperson decision making when prospecting, and (3) effectively manage salespeople’s decision making when prospecting by altering their benefit–cost calculus and uncertainty calibration and paying attention to salespeople’s portfolio characteristics. Furthermore, salespeople should be aware of the biases their past performance success and experience create in their decision making when prospecting.
1. Why Salespeople Avoid Big-
Whale Sales Opportunities
From: Xu, van der Borgh, Nijssen, and Lam (2021)
2. Pros and Cons of ‘Big Whale’
Opportunities?
• Some practitioners emphasize the pursuit of large prospects
because these “big whales” help firms and salespeople achieve
rapid sales growth; others warn against prioritizing such prospects
because they can easily drain salesperson and company resources
• Moreover, in the time it takes to close one major deal, the
salesperson could have closed many smaller deals
• Although practitioners appear to recognize salespeople’s benefit–
cost trade-offs when prospecting, academic research has not
systematically examined this important phenomenon.
From: Xu, van der Borgh, Nijssen, and Lam (2021)
3. Why do salespeople pursue or avoid big-
whale sales opportunities?
• Based on their initial judgment of opportunity magnitude, salespeople conduct a
benefit–cost analysis to decide which opportunity to pursue.
• Using opportunity magnitude as the primary cue, salespeople assess benefits and
costs of pursuing a prospect. This has an inverted U-shaped effect on performance.
So, salespeople are most likely to be successful for opportunities of average size.
Benefits
– =
Opportunity
Magnitude
Opportunity
Magnitude
Performance
Opportunity
Magnitude
Costs
From: Xu, van der Borgh, Nijssen, and Lam (2021)
4. How does conversion uncertainty
affect salespeople’s decision making
• Conversion uncertainty: A salesperson’s initial judgment of the likelihood to
convert an opportunity into a deal.
• Conversion uncertainty lowers salespeople’s perception of anticipated benefits. As
a result, smaller opportunities tend to get more attention and follow up.
Benefits
Costs
– =
Opportunity Magnitude
Performance
Low uncertainty
High uncertainty The curve
shifts to the
left
Opportunity Magnitude Opportunity Magnitude
From: Xu, van der Borgh, Nijssen, and Lam (2021)
5. How does this effect change
depending on the salesperson?
• Salespeople with low past performance do best with relatively
large and uncertain portfolios.
• Salespeople with high past performance and inexperienced
salespeople do best with relatively large and certain portfolios.
• Relatively experienced salespeople perform well with small-to-
moderate portfolios and high uncertainty.
From: Xu, van der Borgh, Nijssen, and Lam (2021)
6. Managerial Implications
• Managers can use historical CRM data to calculate opportunity
magnitude and cost for each salesperson.
• This data can be used to assuage avoidance of big-whale deals and as part
of salesperson training.
• To reduce conversion uncertainty, managers can use behavior-based
control to curtail salespeople’s pursuit of highly uncertain
opportunities and providing them with more frequent feedback.
• Salespeople need to be cognizant of potential biases created by
their past performance success and experience.
From: Xu, van der Borgh, Nijssen, and Lam (2021)