The Effect of Personal Selling on Customer Conversion under Partial Compliance
(A2025-126483)

AUTHORS

Seong kyoung Shin, Bowling Green State University; Tat Chan, Washington University in St. Louis; Manohar Kalwani, Purdue University

ABSTRACT

Personal selling is crucial for business growth, prompting companies to invest significantly in their sales forces. However, measuring the effectiveness of personal selling poses significant challenges due to selection bias introduced by firms’ strategic targeting. Moreover, the perception of personal selling as intrusive often leads majority of targeted customers to avoid engagement, resulting in further consumer-side selection bias. This study aims to evaluate the effectiveness of personal selling using observational data, controlling for both selection biases arising from firms’ targeting policies and consumer partial compliance. We employ propensity score matching to construct comparable groups of targeted and non-targeted consumers. Subsequently, we apply an instrumental variable approach, with targeting status serving as the instrument for treatment, to infer the effects of personal selling. Focusing on the impact of phone calls from representatives, a form of personal selling, in the prescription delivery service market, we find that phone calls do encourage conversion. However, the effectiveness of personal selling is significantly underestimated when not correcting for selection bias due to partial compliance. Our findings suggest that personal selling should specifically target inexperienced consumers and that firms should prioritize strategies to enhance compliance among targeted individuals.