Is being one of the best companies for salespeople also doing the best for shareholders?

Abstract

We have all probably heard the phrases “You have to spend money to make money,” and “Treat your employees right and they will treat you right.” These concepts are extremely important and conflict somewhat with cost control, in particular for costs related to the people selling your products and services. We examine this issue by comparing the market value and operating results of publicly traded companies recognized by Selling Power magazine as one of the 50 Best Companies to Sell for, to matching companies not included on their lists. The results indicate that companies providing an excellent environment for their sales efforts and emphasize customer retention have higher Tobin’s Q (a measure of market valuation) and are more likely to have an increasing Tobin’s Q than their competitors.