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!
Do microplastics harbour additional risks by colonization with harmful bacteria?
05.04.2018 | Leibniz-Institut für Ostseeforschung Warnemünde
Rutgers-led innovation could spur faster, cheaper, nano-based manufacturing
14.02.2018 | Rutgers University
University of Connecticut researchers have created a biodegradable composite made of silk fibers that can be used to repair broken load-bearing bones without the complications sometimes presented by other materials.
Repairing major load-bearing bones such as those in the leg can be a long and uncomfortable process.
Study published in the journal ACS Applied Materials & Interfaces is the outcome of an international effort that included teams from Dresden and Berlin in Germany, and the US.
Scientists at the Helmholtz-Zentrum Dresden-Rossendorf (HZDR) together with colleagues from the Helmholtz-Zentrum Berlin (HZB) and the University of Virginia...
Novel highly efficient and brilliant gamma-ray source: Based on model calculations, physicists of the Max PIanck Institute for Nuclear Physics in Heidelberg propose a novel method for an efficient high-brilliance gamma-ray source. A giant collimated gamma-ray pulse is generated from the interaction of a dense ultra-relativistic electron beam with a thin solid conductor. Energetic gamma-rays are copiously produced as the electron beam splits into filaments while propagating across the conductor. The resulting gamma-ray energy and flux enable novel experiments in nuclear and fundamental physics.
The typical wavelength of light interacting with an object of the microcosm scales with the size of this object. For atoms, this ranges from visible light to...
Stable joint cartilage can be produced from adult stem cells originating from bone marrow. This is made possible by inducing specific molecular processes occurring during embryonic cartilage formation, as researchers from the University and University Hospital of Basel report in the scientific journal PNAS.
Certain mesenchymal stem/stromal cells from the bone marrow of adults are considered extremely promising for skeletal tissue regeneration. These adult stem...
In the fight against cancer, scientists are developing new drugs to hit tumor cells at so far unused weak points. Such a “sore spot” is the protein complex...
13.04.2018 | Event News
12.04.2018 | Event News
09.04.2018 | Event News
20.04.2018 | Physics and Astronomy
20.04.2018 | Interdisciplinary Research
20.04.2018 | Physics and Astronomy