This article is the first to empirically examine the effect of customer loyalty in retail price negotiations. Across three field studies and one negotiation experiment, the authors establish what ...they call the "loyalty-discount cycle": in price negotiations with salespeople, loyal customers receive deeper discounts that, in turn, increase customer loyalty, resulting in a downward spiral of a company's price enforcement. The reason for the positive effect of customer loyalty on discount is twofold: (1) loyal customers demand a reward for their loyalty and invoke their elevated perceived negotiation power, and (2) to retain loyal customers, salespeople grant discounts more willingly. Furthermore, the mechanisms are moderated by the basis of a customer's loyalty (price vs. quality) and the length of the relationship between the salesperson and the customer. To escape the loyalty-discount cycle, salespeople can use functional and relational customer-oriented behaviors. The study helps managers and salespeople optimize their price enforcement and servicing of loyal customers.
Organizational downsizing to cut costs frequently creates new, “hidden costs” that neutralize potential increases in productivity. Customer dissatisfaction is such an overlooked downsizing outcome. ...Using longitudinal data from the American Customer Satisfaction Index (ACSI), Compustat, and a consumer survey this study analyzes satisfaction outcomes of downsizing. It extends research in this domain to B2C markets and explicitly addresses environmental influences on the downsizing–satisfaction link. Results indicate that there is a negative effect of downsizing on customer satisfaction. It is particularly pronounced for companies (1) with little organizational slack, (2) with high labor productivity, or (3) in industries with high R&D intensity. Moreover, downsizing has a stronger negative impact on customer satisfaction in product categories with (4) high risk importance and (5) low probability for consumer errors as well as (6) low level of brand consciousness. Furthermore, customer satisfaction mediates the effect of downsizing on financial performance. The results provide an explanation for why so many downsizing projects fail and what managers can do to prevent adverse effects of downsizing on customer satisfaction and financial performance.
Service employees frequently must enforce rules upon their customers to mitigate dysfunctional customer behavior and ensure proper service delivery (e.g., enforce “fasten seatbelt” signs on flights). ...However, the consequences of enforcing service rules (ESR) are not well understood. To elucidate the effect of ESR, the authors present seven studies involving >6800 customers and consisting of cross-sectional and longitudinal data from customer surveys and company records as well as experiments. The results indicate that ESR exerts ambivalent effects: customers who experience ESR directed at other customers perceive service employees as more competent, which increases customer loyalty. However, if ESR is directed at customers themselves, they perceive a self-concept threat, leading them to devalue service employees' warmth and competence and to become less loyal. The effects of ESR hinge on a number of factors, including the harm that dysfunctional behavior potentially causes, the way ESR is communicated, and customers' experience with the service situation. Furthermore, the authors show that service employees can alleviate the negative effects of ESR by communicating service rules in advance and justifying ESR appropriately.
•We study service employees’ enforcing of service rules (ESR) upon misbehaving customers using seven studies (N>6,800)•Customers who experience ESR directed at other customers perceive service employees as more competent•If ESR is directed at themselves, customers devalue service employees’ warmth and competence•These effects depend on the potential harm of misbehavior, customers’ experience, and ESR communication•To alleviate negative effects, service employees should announce service rules in advance and justify ESR empathically
With the onset of the 2020 coronavirus pandemic, industrial suppliers are increasingly challenged to close their open sales opportunities and keep generating business. Against this backdrop, the ...authors of this study investigate which offerings industrial customers are most likely to purchase as the pandemic progresses. Drawing on positive decision theory and empirically investigating 31,353 sales opportunities across 57 countries, the authors show that the coronavirus pandemic significantly decreases industrial customers' purchase probability, especially for high-priced offerings. In countries with low uncertainty avoidance and strong long-term orientation (e.g., China, India, Singapore), purchase probability is less affected by the pandemic. The coronavirus pandemic even increases purchase probability for offerings with low prices in countries where cultures are simultaneously uncertainty-avoidant and short-term oriented (e.g., Argentina, Brazil, Mexico). This is presumably because customers safeguard their operations in the face of impending supply shortages. Consequently, this helps suppliers focus on the right sales opportunities to secure their business during exogenous global shocks such as the coronavirus pandemic.
•The coronavirus pandemic decreases industrial customers' purchase probability.•The purchase probability of low-priced offerings is affected less•This probability even increases in short-term oriented and uncertainty-avoidant countries.•The purchase probability of high-priced offerings decreases more strongly.•This probability decreases less in long-term oriented and uncertainty-avoidant countries.
Consumers care about the fairness of companies both in terms of corporate social responsibility (CSR) engagement and the fairness of prices. However, the interplay between these domains is not yet ...well understood. Therefore, this study examines how consumers’ perceptions of CSR engagement affect their perceived price fairness following a price increase. Drawing on cue‐utilization and expectancy disconfirmation theory, the authors propose that perceived CSR engagement exacerbates the negative effect of a price increase on perceived price fairness, because perceived CSR engagement increases consumers’ price fairness expectations which are violated through price increases. These propositions are tested in three experimental studies with samples consisting of approximately 3000 customers of a global furniture manufacturer and retailer (Study 1), as well as participants acquired through a self‐administered online consumer panel (Study 2) and Prolific (Study 3). The experiments yield support for the hypothesized effects and reveal CSR skepticism as a critical boundary condition. The findings extend existing literature on the effects of perceived CSR engagement and pricing on consumer reactions by examining the role of perceived CSR engagement in shaping consumer reactions to price increases and by establishing consumers’ price fairness expectations as the central psychological mechanism.
The digital transformation of organizations is a pervasive force which fundamentally changes companies and, in fact, society as a whole. For many companies, the sales force is at the center of this ...transformation seeing the essential role of salespeople at the customer-company interface and the exceptional quantifiability of salespeople's work outputs and inputs. New, cutting-edge sales technologies such as predictive sales analytics, virtual or augmented reality, or AI bots hold the promise of significant productivity gains, yet, simultaneously may entail insidious side effects for sales employees and companies. While past research made significant progress in understanding the benefits of these new technologies, the intricate 'human side' of the digital transformation remains relatively 'uncharted territory'. With this special issue, we aim to contribute to a better understanding of the human side in digital transformation of sales-to augment academic knowledge, provide immediate guidance to practitioners, and improve academic sales education. This editorial reviews the works in the special issue, the state of digital sales transformation in practice, and on this basis derives ideas for future research.
Managerial and academic literature provide only limited guidance on how to drive the digital transformation of sales. This article presents a model for in-depth analysis of sales processes, goals for ...each process in terms of effectiveness and efficiency, and a structured set of digital responses. For managers, it provides actionable guidelines on how to drive the digital transformation of sales, a large set of inspiring examples, and an international benchmarking opportunity.
Creating tension in sales research Rapp, Adam; Habel, Johannes
Journal of personal selling & sales management,
01/2024, Letnik:
44, Številka:
1
Journal Article
Prior research has firmly established that consumers draw benefits from a firm's engagement in corporate social responsibility (CSR), especially the feeling of a "warm glow." These benefits ...positively affect several desirable outcomes, such as willingness to pay and customer loyalty. The authors propose that consumers do not blindly perceive benefits from a firm's CSR engagement but tend to suspect that a firm's prices include a markup to finance the CSR engagement. Taking customers' benefit perceptions and price markup inferences into account, the authors suggest that CSR engagement has mixed effects on consumers' evaluation of price fairness and, thus, on subsequent outcomes such as customer loyalty. The authors conduct one qualitative study and four quantitative studies leveraging longitudinal field and experimental data from more than 4,000 customers and show that customers indeed infer CSR price markups, entailing mixed effects of firms' CSR engagement on price fairness. The authors find that perception critically depends on customers' CSR attributions, and they explore the underlying psychological mechanisms. They propose communication strategies to optimize the effect of CSR engagement on perceived price fairness.
Positive effects of incentives on salespeople’s motivation, effort, and performance are well-established in literature. This article takes a novel look at their influence on salespeople’s health. The ...results of four empirical studies, including more than 1,400 salespeople, suggest that an increasing variable compensation share (i.e., greater pay-for-performance component in salespeople’s compensation plans) increases salespeople’s stress, resulting in emotional exhaustion and more sick days. These outcomes are more likely for salespeople with lower personal ability and fewer social resources. The harmful effects of the variable compensation share on salespeople’s health reduce the positive effects of this incentive on sales performance. To practice better marketing for a better world, if variable compensation is used, the authors recommend that managers screen new hires for job-related resources and help their existing staff build such resources. In addition, companies may personalize incentive schemes and sensitize managers to the stress-inducing effects of variable compensation shares.
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