Saddling effect of underlying contracts on sales performance: a multi-group analysis in the takaful industry

Abstract

Purpose This study aims to examine the impact of information overload (referred to as the saddling effect in this study) of underlying contracts on the sales performance of the salesforce at takaful institutions with special reference to addressing the heterogeneous effect among distribution channels. Design/methodology/approach A total of 311 samples were collected from the sales professionals of the takaful industry in Malaysia using a purposive sampling technique and the empirical analysis was conducted with the measures of model fit and bootstrapping technique using partial least square structural equation modeling and multi-group analysis. Findings Empirical results indicate that the saddling effect of the underlying contracts is evident among salesforce and the magnitude of the impact was found to be heterogeneous between the groups of salesforces in different distribution channels. Practical implications Findings recommend respective authorities of takaful institutions to intensify capacity building for their salesforce, particularly in the area of shariah knowledge and nature of underlying Islamic contracts used in the takaful products. A significant heterogeneous effect between distribution channels suggests that the actions and policy formulations should be diverse between the salesforce at different distribution channels and higher attention should be catered for the salesforce at the direct selling channel. Originality/value The increased information expectation (i.e. underlying contract knowledge) on takaful salesforce and its impact on their sales performance have not been documented before. The increase in information may create a burdening effect or what is referred to in this study as the information or knowledge “saddling effect.” If a saddling effect is identified, this may be a formidable reason for the slowing growth of the takaful industry in the respective market. It is expected that the outcome of this study would assist not only to fill the gap in the literature of personnel selling in the takaful industry but also will assist the takaful institutions in formulating appropriate policies for tackling the issue of the saddling effect of underlying contracts.

Does knowledge collecting and donating enhance a bank's salesperson performance?

“…In their most recent report, Sales Insight Lab (2020) highlights that salespersons who lack this quality will need more support to meet their sales quota. Both practitioners and scholars agree that underperformance reduces salesperson job satisfaction (Shamsudheen et al, 2023;Gu, 2018), directly and indirectly, leads to higher turnover (Shanahan and Hopkins, 2019;Sunder et al, 2017), endangers business profitability (Che et al, 2018) and sustainability (Wong and Tan, 2016). Therefore, understanding why salespersons fail to perform is essential for theoretical and practical reasons (Barone and DeCarlo, 2013).…”

“…In their most recent report, Sales Insight Lab (2020) highlights that salespersons who lack this quality will need more support to meet their sales quota. Both practitioners and scholars agree that underperformance reduces salesperson job satisfaction (Shamsudheen et al. , 2023; Gu, 2018), directly and indirectly, leads to higher turnover (Shanahan and Hopkins, 2019; Sunder et al.…”