A skilful negotiator can save a lot of money when shopping in his favourite store. This was found out by researchers at the Ruhr-Universität Bochum (RUB) in a large-scale study. An extra five percent discount is, on average, no problem - as long as you know how to use your customer loyalty as a trump.
The credo turned on its head
For loyal customers, the price is not so important – at least, that was the credo in marketing and sales up to now. The recently published study by the Bochum scientists Prof. Jan Wieseke, Sascha Alavi and Johannes Habel of the Faculty of Economics at the RUB has turned this perception fundamentally on its head: "Many customers consciously play out their loyalty in price negotiations, and thus gain an extra five percent discount without any problem" says Wieseke. When buying a car worth 30,000 Euros, a buyer thus saves up to 1,500 Euros without any great effort.
An unbeatable argument
For their study, the researchers in Bochum evaluated data from more than 6,000 customers and attended over 300 price negotiations in numerous sectors. Because: negotiations have long since not just applied to buying a car, but to almost every store and to almost every price category - whether in a furniture shop, DIY store or clothes shop. Since the long-term retention of their customers is extremely important for companies, loyal customers have an almost unbeatable argument. A regular customer who demands a reasonable price reduction often encounters little resistance from sellers. However, the following statement holds true, says Wieseke: "Many shops know their regular customers and are very quick to spot a lie."
Doubtful side effects
For the companies, the excessive discounts for loyal customers do, incidentally, entail some dubious side effects. Thus, for example, the researchers in Bochum found out that, as a result of the higher discount, the customers become even more loyal to the shop - and are then able to achieve an even greater discount on their next purchase. "This shows that loyalty can, indeed, be bought", says Wieseke, "but it creates a vicious circle in which customer loyalty and discounts rise ever higher and higher. This puts many shops in a strangle hold." Anyone wanting to break out of this would have to train their sales staff specifically for negotiations with loyal but demanding customers.
Taking the old image too much to heart
From a scientific point of view, the study is highly explosive. Until now, researchers always assumed quite the opposite - that, because of their attachment to their favourite store, loyal customers were even willing to pay higher prices. Also many companies are often not sufficiently aware of the negotiating power of loyal customers: "Many retailers have taken the old image of the faithful, satisfied customer simply too much to heart. A sober look at the figures reveals the harsh reality here", says Prof. Jan Wieseke. The RUB researchers presented the results of their study publicly for the first time last Saturday, 16 February 2013, at the Conference of the American Marketing Association in Las Vegas - one of the world's most prestigious conferences for marketing researchers. The study received an award as best conference paper in the area of sales and customer relationship management. In addition, the study received an honorable mention award as one of the best conference papers overall.
Prof. Dr. Jan Wieseke, Marketing Department, Faculty of Economics, Ruhr Universität Bochum
Editor: Jens Wylkop
Jan Wieseke | EurekAlert!
Physics of bubbles could explain language patterns
25.07.2017 | University of Portsmouth
Obstructing the ‘inner eye’
07.07.2017 | Friedrich-Schiller-Universität Jena
Physicists working with researcher Oriol Romero-Isart devised a new simple scheme to theoretically generate arbitrarily short and focused electromagnetic fields. This new tool could be used for precise sensing and in microscopy.
Microwaves, heat radiation, light and X-radiation are examples for electromagnetic waves. Many applications require to focus the electromagnetic fields to...
Strong light-matter coupling in these semiconducting tubes may hold the key to electrically pumped lasers
Light-matter quasi-particles can be generated electrically in semiconducting carbon nanotubes. Material scientists and physicists from Heidelberg University...
Fraunhofer IPA has developed a proximity sensor made from silicone and carbon nanotubes (CNT) which detects objects and determines their position. The materials and printing process used mean that the sensor is extremely flexible, economical and can be used for large surfaces. Industry and research partners can use and further develop this innovation straight away.
At first glance, the proximity sensor appears to be nothing special: a thin, elastic layer of silicone onto which black square surfaces are printed, but these...
3-D shape acquisition using water displacement as the shape sensor for the reconstruction of complex objects
A global team of computer scientists and engineers have developed an innovative technique that more completely reconstructs challenging 3D objects. An ancient...
Physicists have developed a new technique that uses electrical voltages to control the electron spin on a chip. The newly-developed method provides protection from spin decay, meaning that the contained information can be maintained and transmitted over comparatively large distances, as has been demonstrated by a team from the University of Basel’s Department of Physics and the Swiss Nanoscience Institute. The results have been published in Physical Review X.
For several years, researchers have been trying to use the spin of an electron to store and transmit information. The spin of each electron is always coupled...
26.07.2017 | Event News
21.07.2017 | Event News
19.07.2017 | Event News
27.07.2017 | Life Sciences
27.07.2017 | Life Sciences
27.07.2017 | Health and Medicine