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The authors conduct a field experiment in which they vary the sales force compensation scheme at an Asian enterprise that sells consumer durable goods. With variation generated by the experimental treatments, the authors model sales force performance to identify the effectiveness of various forms of conditional and unconditional compensation. They account for salesperson heterogeneity using a hierarchical Bayesian framework to estimate the model. They find conditional compensation in the form of quota bonus incentives to improve performance; however, such compensation may lead to lower future performance. The authors find little difference in effectiveness between a quota bonus plan and punitive bonus plans framed as a penalty for not achieving quota. They find that unconditional compensation, in the form of reciprocity, is effective at improving sales force performance only when it is given as a delayed reward; however, the effectiveness of this plan decreases with repeated exposure. The authors also find heterogeneity in the impact of compensation on performance across salespeople, such that unconditional compensation is more effective for salespeople with high base performance, whereas conditional compensation is equally effective across all types of salespeople.

The authors examine behavioral outcomes following a customer-initiated contact (CIC) with a manufacturer and develop a framework to explain the impact of vendor performance during a CIC on a customer's share of category requirements with a focal brand and word-of-mouth incidence following contact. The authors propose customer characteristics and context-specific factors that may relate to differences in the key characteristics of the underlying source model of share of category requirements and word of mouth. The authors then assess the overall importance of the explanatory variables in the source model and simultaneously test for systematic differences related to CIC-specific factors using survey data from more than 1700 CICs that involve more than 60 brands. A key assumption in much prior research that has examined customer–firm interactions is that CIC-specific factors, if they are included at all, create an automatic regularity that must be controlled for. The authors propose and find an additional effect. The responsiveness to factors under a firm's control varies across CICs, and therefore firms that adapt their processing have an advantage. Rather than provide a uniform response to all CICs, the authors' results offer managers several guidelines on how to customize their responses to the various CIC types and how to improve the efficiency and effectiveness of their firms' CIC management efforts.