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Saving on discounts through accurate sensing - Salespeople's estimations of customer price importance and their effects on negotiation success

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journal contribution
posted on 18.06.2018, 08:48 by Sascha Alavi, Jan Wieseke, Jan H. Guba
© 2015 New York University. Discount negotiations are prevalent in retailing and serve as key instruments for adjusting retail prices to the individual customer. Accurate perception of the importance the customer attaches to price, which the authors label as customer price importance (CPI) sensing, should be critical to retail salespeople's negotiation performance. However, prior research has neither conceptually nor empirically investigated the role of CPI sensing in customer-salesperson interactions. Addressing this research void, this study analyzes both antecedents and consequences of salespeople's accurate CPI sensing in discount negotiations with customers. The authors use a four-sources multilevel data set from the B2C automobile retailing context that comprises data on 537 salesperson-customer interactions. Results provide evidence that through accurate CPI sensing, salespeople are able to substantially reduce the discounts they grant to customers (on average by $616 per transaction). Moreover, with respect to CPI sensing accuracy, results show that retail salespeople misperceive CPI owing to reliance on heuristic customer cues.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Retailing

Volume

92

Issue

1

Pages

40 - 55

Citation

ALAVI, S., WIESEKE, J. and GUBA, J.H., 2016. Saving on discounts through accurate sensing - Salespeople's estimations of customer price importance and their effects on negotiation success. Journal of Retailing, 92(1), pp. 40-55.

Publisher

© New York University. Published by Elsevier

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2015-10-12

Notes

This paper was accepted for publication in the journal Journal of Retailing and the definitive published version is available at https://doi.org/10.1016/j.jretai.2015.08.002

ISSN

0022-4359

Language

en