Survival Analysis: A New Approach to Analyzing Sales Force Retention

Abstract

This paper examines the problems associated with traditional methodologies used to study turnover. Existing empirical research findings rely on “cross sectional window designs”. This paper describes design flaws in the traditional approaches and demonstrates how the flaws may have affected the validity of previous studies.Survival analysis is introduced and discussed as a valuable tool for sales force turnover research. Survival analysis traces the survival function of new hires over time. This study presents data from a large national insurance firm to introduce the methodology of survival analysis, and traces the retention of insurance sales agents over a two year period. The effect of independent variables on rentention using survival analysis is shown by examining effect of sales productivity on retention rates.