- Email: [email protected]
Consumer decision-making, salespeople's adaptive selling and retail performance
Journal of Business Research 54 (2001) 125 – 129
Consumer decision-making, salespeople’s adaptive selling and retail performance Arun Sharma* Department of Marketing, University of Miami, P.O. Box 248147, Coral Gables, FL 33124, USA Received 12 December 1998; accepted 1 May 1999
Abstract In this era of ‘‘hypercompetition’’ and growth of ‘‘e-tailing,’’ salespeople are retailers’ key advantage. In order to exploit this advantage, retailers need to better utilize their salespeople. Therefore, retailers should understand the role that salespeople play in consumer decisionmaking and design strategies to enhance the performance of their salespeople and stores. In this regard, the paper examines consumers’ persuasion within the context of consumer – salesperson interaction. Some specific strategies to increase consumer persuasion are then discussed. The role of knowledge structures on salespeople’s performance is then discussed. Finally, potential managerial implications of the research are discussed. D 2001 Elsevier Science Inc. All rights reserved. Keywords: Consumer; Retail; Salespeople
1. Introduction In the last 10 years, there have been fundamental shifts in retailing—growth of the internet and customer fragmentation. The Internet has been attracting consumers that have knowledge of the products and services that they intend to buy and do not need additional retail level help (e.g., customer service). There has been an increase in customer fragmentation as smaller and smaller groups of customers demand products and services tailored to their individual needs (Kahn and McAllister, 1997). For example, the US automobile retailing industry is under tremendous pressure from non-traditional competition primarily because of the improper utilization of salespeople leading to poor sales practices. In response, there has been a growth of large chains such as Auto Nation and Car Max. Also, consumers (estimated at a half of buyers) peruse the Internet before they visit a dealer. Carpoint.com (a subsidiary of Microsoft) sells 10,000 cars per month by referring customers to dealers for a fixed no-haggle price. Similarly, Autobytel.com generates 100,000 monthly inquiries for their customers. In response, General Motors, Ford, and Chrysler are designing web sites that will allow consumers to special* Tel.: +1-305-284-5935; fax: +1-305-284-5326. E-mail address: [email protected] (A. Sharma).
order, compare prices across dealers, and buy automobiles on the Internet. Traditional retailers increasingly need to compete for a smaller subset of fragmented consumers. In this era of customer fragmentation, retail services need to be adapted for consumers and therefore the role of retail salespeople has become more critical. Retail salespeople, as knowledge and customer service agents, are the strengths of traditional retailers. In fact, firms such as Nordstrom have developed a corporate culture based on promoting positive salesperson –consumer interactions and relationships through successful implementation of concepts such as the well-known Nordstrom’s ‘‘personal shopper.’’ Thus, this article concentrates on the effect of retail salespeople’s behavior on consumer decision-making. The motivation of the paper is the absence of research that has integrated the findings of the effect of retail salespeople in enhancing retailing persuasion within consumers’ shopping experience. In this manuscript, we begin with the discussion on consumer decision-making in the context of a retail setting. This is followed by a discussion of three strategies that retail salespeople can use to persuade consumers. Next, we discuss salespeople’s adaptive selling behaviors that influence salespeople’s performance. Finally, the management implications of the research are stressed. Inherent to the paper is the notion that retailers need to understand con-
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A. Sharma / Journal of Business Research 54 (2001) 125–129
sumer decision-making and also understand the interaction of retail sales strategy and consumer decision-making.
(c) Quality is difficult or too time-consuming to evaluate (Allison and Uhl, 1964; Hoch and Ha, 1986); and (d) Consumers have a need for information (Nelson, 1970).
2. Persuasion knowledge model We use the persuasion knowledge model (PKM) to understand consumers’ processing of salespeople’s behavior and presentations (Wright, 1986; Friestad and Wright, 1994). PKM suggests that both salespeople and consumers develop knowledge regarding persuasion strategies. We first discuss consumers’ knowledge. Consumers’ knowledge contains persuasion elements such as topic knowledge (e.g., service knowledge), persuasion knowledge (e.g., message meanings), and agent knowledge (e.g., characteristics of the salesperson). Consumers’ topic knowledge is their level of knowledge of the retail service to be provided. Topic knowledge facilitates comprehension of the persuasion message and can be used to examine the claims that the salesperson is making (Friestad and Wright, 1994). If consumers have little or no knowledge of the topic, they use their own persuasion model as a resource. The consumer’s own persuasion model provides them with a basis for assessing the likely validity of the salesperson’s message (see Friestad and Wright, 1994). To manage the buying process, consumers have knowledge about the goals and actions of salespeople and the actions that they can take to cope with the persuasion process. Some coping tactics are discounting and message elaboration. As an example, during sales presentations, consumers have ‘‘message thoughts’’ and ‘‘own-thoughts’’ (see Dholakia and Sternthal, 1977; Harmon and Coney, 1982). Message thoughts represent the sales presentation’s information content and will likely reflect the position of the salesperson. Own-thoughts are object-attribution associations stored in memory and pertaining to the message being presented. These own-thoughts may support or counter the position taken by the salesperson. Normally, the consumer’s own-thought is that the primary purpose of the sales message is to ‘‘push’’ the service irrespective of its appropriateness for the consumer. Thus, own-thoughts typically counter the sales message, and discounting of the sales message takes place. Agent knowledge or salesperson knowledge is critical in persuasion. The behavior of salespeople may influence consumers’ perceptions of retailer and retailers’ products. Signaling theory would also suggest the importance of salespeople’s behavior in the evaluation of a retailer as signaling cues are specifically relevant when (Dawar and Parker, 1994): (a) Consumers want to reduce the perceived risk (Jacoby et al., 1971; Olson, 1972); (b) Consumers are unable to evaluate quality (Rao and Monroe, 1988);
Buying at retail stores would reflect all four conditions to some degree. Under these conditions, the behavior of the salesperson operates as a signal that serves as a heuristic in assessing the quality of offerings being considered for purchase (see Dawar and Parker, 1994). Salespeople’s behaviors may influence persuasion because of the need of some consumers to interact with salespeople after the sales interaction. Consumers regard this aspect, the centrality of the salesperson in the consumer’s marketplace relationship as important (Friestad and Wright, 1994). Consumers feel that their knowledge of salespeople becomes more important as there may be expectations of continued relationship. For example, if the product fails to perform to expectations, consumers need to be able to contact the salesperson. Finally, salespeople may be seen as a reflection of the retailer as the behavior of the salespeople may reflect the subsequent service that will be available from the retailer (Friestad and Wright, 1994).
3. Salespeople’s behavior and persuasion Within the context of the persuasion knowledge model, we would like to demonstrate how salespeople’s behaviors could impact consumer decision-making. To demonstrate the effect of salespeople’s behaviors on consumer perception, we provide examples by examining three salespeople’s behaviors that can effect consumer decision-making and persuasion. We begin this section by discussing the ‘‘customer orientation’’ of salespeople — empathy, affect, and availability. We then discuss the credibility of the salesperson and salespeople’s accuracy. 3.1. Salesperson’s customer orientation There are three aspects to salespeople’s customer orientation discussed — salespeople’s empathy, affect, and availability. 3.1.1. Salespeople’s empathy and affect Empathy suggests that salespeople have an ability to put themselves in their consumers’ position and are able to sense the emotions and feelings of consumers. Affect refers to a feeling state that may range from strongly positive to strongly negative. Positive feelings reflect a liking whereas a negative feeling reflects a dislike for the object. When salespeople demonstrate empathy toward consumers, consumers feel that the salesperson has a positive affect toward them. In persuasion research, positive affect and empathy have been associated with higher levels of persuasion (Crockett, 1988; Beatty et al., 1997).
A. Sharma / Journal of Business Research 54 (2001) 125–129
Consumers’ persuasion should be enhanced when they interact with a salesperson that demonstrates empathy and/ or positive affect than when they interact with a nonempathetic salesperson and/or a salesperson demonstrating a negative affect. When a consumer meets a salesperson demonstrating no empathy or demonstrating negative affect, the consumer will likely believe that the salesperson does not have his/her interest in mind. This attribution will increase counter-arguments reducing persuasion. In contrast, a consumer that meets a salesperson demonstrating empathy or a positive affect, the attribution that the salesperson is empathetic or likes the consumer should reduce counterargumentation. Thus, lower levels of counter-argumentation should increase persuasion. The research on liking reported by Cialdini (1984) and research on salespeople by Beatty et al. (1997) and Sharma (1999) support this position. 3.1.2. Salespeople’s availability Consumers want salespeople to be available to help solve their problems. In selling situations, the availability of salespeople to solve consumer problems during and after the selling process has been ranked as being among the most important issues to consumers (Williams and Seminerio, 1985; Cooper and Summer, 1991). Sharma and Stafford (1999) showed that persuasion is enhanced when salespeople are perceived as being available. 3.2. Salespeople’s credibility ‘‘Credibility is the degree to which a communication source or channel is perceived as trustworthy and competent by the receiver’’ (Rogers and Shoemaker, 1971). The credibility of salespeople influences their long-term relationship with buyers (Ganesan, 1994). If an individual perceives a source to possess higher credibility than various other sources, the individual will be more receptive to messages from that source. In sales situations, salespeople’s credibility has also been shown to have a direct effect on product evaluations and buying intentions (Sharma, 1990). Credibility is expected to mediate persuasion by influencing a buyer’s own-thought activation. A salesperson demonstrating credibility is expected to inhibit the buyer’s own-thought activation (or counter-argumentation) which increases the acceptance of the message. In contrast, a non-trustworthy salesperson is expected to increase ownthought activation (or counter-argumentation) reducing the acceptance of a message (cf., Harmon and Coney, 1982). 3.3. Salesperson accuracy The accuracy of retail salespeople’s perceptions of consumer needs is important because salespeople develop strategies based on consumers’ perceived needs (Weitz, 1978). Consumers have differing needs (Beatty et al., 1997). If salespeople are not accurate about their consumer’s needs, their sales presentations will not address the needs of
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the consumers. As salespeople move from transactionoriented selling to relationship selling, the accuracy of salespeople’s perceptions becomes more critical. An accurate assessment of consumers’ needs and development of programs to cater to those needs are essential for relationship marketing. Interestingly, studies have also found that salespeople on average are inaccurate about consumers’ needs (see Sharma and Lambert, 1994).
4. Salespeople skills needed by retailers In Section 3, we discussed some salespeople behaviors that can be used to enhance consumer persuasion. The issue for retailers is to identify the salespeople that can effectively implement these behaviors. Research has shown that no single factor can account for a large percentage of variance in predicting sales performance. Churchill et al.’s (1985) comprehensive meta-analysis examined the relationship between salesperson performance and salesperson aptitude, selling skills, personal characteristics, motivation, and role. Aptitude refers to salespeople’s innate abilities and personal traits (e.g., mental abilities, personality); selling skills refer to learned proficiencies (e.g., sales presentations); personal characteristics refer to physical traits, background, and experience. Churchill et al. found that these factors accounted for an average of 4% of the variance in performance (aptitude accounted for 2%, selling skills for 7.2%, personal characteristics for 3%, motivation for less than 7%, and role for 9%). One would expect that selling skills would explain a larger proportion of variance in sales performance because they are fundamental to any sales interaction. Traditionally, selling skills have been measured by concepts such as technical knowledge, sales comprehension, sales style, empathy, and ability to resolve conflicts (Churchill et al., 1993). Most of the constructs defining selling skills related to salespeople’s ability, rather than the process of selling. We expect that the process of determining and implementing sales strategy should be a critical aspect in determining salespeople’s performance. In Section 3, we discussed how salespeople could enhance persuasion by changing their orientation, availability, and demonstrating credibility based on the needs of consumers. This process, labeled ‘‘adaptive selling,’’ allows salespeople to adapt their presentation based on consumer needs. A conceptual framework of increasing interest and importance that can be used to address the issue of adaptive selling is the categorical model of memory applied to the analysis of the knowledge structures of salespeople (Weitz et al., 1986). The process of categorization is intrinsic to the perception process. It is a method of organizing and interpreting the vast amount of information that is provided by our sensory apparatus (Rosch et al., 1976; Schneider et al., 1979; Barsalou, 1992). Structure is established through categories that enable people to see the world and experi-
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ences as being more stable. In the case of salespeople, categorizing consumers allows them to better structure the selling process. In a sales environment, rather than developing a unique sales strategy for each consumer, effective salespeople are expected to classify them into groups and to use a common strategy for each group. For example, a retail salesperson may classify shoppers as ‘‘sale’’ or ‘‘full price’’ shoppers and develop specific sales strategies for each group. Thus, categorization knowledge is used by salespeople to classify consumers and to select appropriate sales strategies for that category of consumer (Leong et al., 1989). Retailers should be interested in the way salespeople categorize their consumers. Salespeople who utilize a welldeveloped category structure are expected to practice adaptive selling to a higher degree than those who do not. Salespeople who practice adaptive selling to a larger extent are high performers who change their ‘‘colors’’ to match the selling environment (Sujan and Weitz, 1986; Sujan et al., 1988; Kiechel, 1988; Leong et al., 1989). They understand consumer needs, select the best sales strategies, and then suggest products that will satisfy their consumers’ needs. Therefore, retailers need to select and retain adaptive sales people.
5. Retail sales management implications One major facet of a retail sales manager’s job in the era of increased competition is to manage salespeople to develop and maintain long-term relationships with their consumers. Organizations need to design elements of sales management processes to better meet the decision-making needs of their consumers. These issues are discussed next. 5.1. Selection Experienced salespeople demonstrate a higher level of adaptiveness (Levy and Sharma, 1994). Therefore, retailers should attempt to hire experienced salespeople. If inexperienced salespeople are hired, women and more educated recruits demonstrate a higher level of adaptiveness (Levy and Sharma, 1994). Thus, the attributes that are effective in selecting a salesforce are gender, experience, and education. 5.2. Training Salespeople need to be trained to perform adaptive selling. This involves teaching salespeople to categorize consumers based on consumers’ initial expectations. Market research reports and expert salespeople can aid categorization. Specific sales presentations for different consumer categories can also be developed with the help of expert salespeople, marketing research reports, and experimental research. This training leads to adaptations in a salesperson’s actual sales behavior (Weitz et al., 1986; Sujan et al., 1988; Sharma and Levy, 1995). Also, the accuracy of
salespeople’s perceptions of their consumers also needs to be increased by enhancing their listening skills and providing salespeople with market research information about their consumers. 5.3. Supervision Sales managers need to make the sales environment more ‘‘fun’’ and less ‘‘internally competitive’’ (Sujan et al., 1988). These environments allow salespeople to explore their consumer decision-making and also develop better sales strategies. Sales managers also need to be trained to better evaluate salespeople. Research has suggested that retail sales managers are not particularly accurate in evaluating retail salespeople (Levy and Sharma, 1993). This training includes providing data on the performance of salespeople on many dimensions and the use of multiple item scales. 5.4. Compensation A method to motivate salespeople to develop long-term relationships is consumer satisfaction-based incentives. Due to the emphasis on relationship marketing, there is a new thrust in developing consumer satisfaction-based incentive systems (see Evans and Grant, 1992; Hauser et al., 1993). For example, an increasing number of firms such as IBM, Xerox, and dealerships of Saturn, Infiniti, and Chrysler have initiated consumer satisfaction based incentive systems (Zielinski, 1992a,b; Sager et al., 1994). Retailers also need to consider satisfaction-based incentives.
6. Conclusions Retail marketers need to develop strategies to increase consumer patronage. It is said, ‘‘it costs five times as much to get a new customer as it costs to maintain an existing customer.’’ Salespeople are critical in the relationship between consumers and retailers. Retailers and salespeople need to understand consumer decision-making and adapt their behaviors to meet the needs of consumers. The paper examined the role of the salesperson in retail consumer decision-making. Specific recommendations were proposed for retail sales managers. These included the selection, training, supervision, and compensation of retail salespeople.
References Allison RI, Uhl KP. Influence of beer brand identification on taste perception. J Mark Res (August) 1964;1:36 – 9. Barsalou LW. Cognitive Psychology: An Overview for Cognitive Scientists. Hillsdale, NJ: Lawrence Erlbaum Associates, 1992. Beatty SE, Mayer M, Coleman JE, Reynolds KE, Lee J. Customer – sales associate retail relationships. J Retailing 1997;72(3):223 – 47. Churchill Jr GA, Ford NM, Hartley SW, Walker Jr OC. The determinants
A. Sharma / Journal of Business Research 54 (2001) 125–129 of salesperson performance: a meta-analysis. J Mark Res (May) 1985; 22:5):103 – 18. Churchill Jr GA, Ford NM, Walker Jr OC. Sales Force Management. Homewood, IL: Irwin, 1993. Cialdini RB. Influence. New York: William Morrow, 1984. Cooper L, Summer B. Getting started in quality, the First National Bank, 1990. In: Berry L, Parasuraman A, editors. Marketing Services: Competing Through Quality. New York: The Free Press, 1991. p. 39. Crockett WH. Schemas, affect, and communication. In: Donohew L, Sypher HE, Higgins ET, editors. Communication, Social Cognition, and Affect. Hillsdale, NJ: Lawence Erlbaum Associates, 1988. pp. 33 – 52. Dawar N, Parker P. Marketing universals: consumers’ use of brand name, price, physical appearance, and retailer reputation as signals of product quality. J Mark (April) 1994;58:81 – 95. Dholakia RR, Sternthal B. Highly credible sources: persuasive facilitators or persuasive liabilities. J Consum Res (March) 1977;3:223 – 32. Evans KR, Grant JA. Compensation and sales performance of service personnel: a service transaction perspective. J Pers Selling Sales Manage (Spring) 1992;12(2):39 – 49. Friestad M, Wright P. The persuasion knowledge model: how people cope with persuasion attempts. J Consum Res (June) 1994;21:1 – 31. Ganesan S. Determinants of long-term orientation in buyer – seller relationship. J Mark (April) 1994;58:1 – 19. Harmon RE, Coney KA. The persuasive effect of source credibility in buy and lease situations. J Mark Res (May) 1982;19:255 – 60. Hauser JR, Simester DI, Wernerfelt B. A customer satisfaction based incentive systems. Working Paper Number 76-92, Cambridge, MA: International Center for Research on the Management of Technology, Massachusetts Institute of Technology, 1993. Hoch SJ, Ha YW. Consumer learning: advertising and the ambiguity of product experience. J Consum Res (September) 1986;13:221 – 36. Jacoby J, Olson JC, Haddock RA. Price, brand name, and product composition characteristics as determinants of perceived quality. J Appl Psychol (December) 1971;55:570 – 9. Kahn B, McAlister L. Grocery Revolution. Boston: Addison Wesley, 1997. Kiechel III W. How to manage salespeople. Fortune (March 14) 1988; 179 – 80. Leong SM, Busch PS, John DR. Knowledge bases and salesperson effectiveness: a script-theoretic analysis. J Mark Res (May) 1989;26:164 – 78. Levy M, Sharma A. Relationships among measures of retail salesperson performance. J Acad Mark Sci 1993;21(3):231 – 8. Levy M, Sharma A. Adaptive selling: the role of gender, age, sales experience, and education. J Bus Res 1994;31(1):39 – 47. Nelson P. Information and consumer behavior. J Political Econ 1970;78(2): 311 – 29. Olson JC. Cue Utilization in the Quality Perception Process, a Cognitive
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Model and an Empirical Test, unpublished doctoral dissertation, Purdue University, 1972. Rao AR, Monroe KB. The modernizing effect of prior knowledge on cue utilization in product evaluations. J Consum Res (September) 1988;15:253 – 6. Rogers EM, Shoemaker FF. Communication of Innovations. New York: The Free Press, 1971. pp. 244 – 45. Rosch E, Simpson C, Miller RS. Structural bases of typicality effects. J Exp Psychol: Hum Percept Perform 1976;2(4):491 – 502. Sager I, McWilliam G, Hof RD. IBM leans on its sales force. Bus Week (February 7) 1994;110. Schneider DJ, Hastorf AH, Ellsworth PC. Person Perception (2nd edn.). New York, NY: Random House, 1979. Sharma A. The persuasive effect of salesperson credibility: conceptual and empirical examination. J Pers Selling Sales Manage (Fall) 1990; 10(4):71 – 80. Sharma A. Does the salesperson like customers? A conceptual and empirical examination of the persuasive effect of perceptions of the salesperson’s affect toward customers. Psychol Mark 1999;16(2):141. Sharma A, Lambert DM. How accurate are salespersons’ perceptions of their customers. Ind Mark Manage 1994;23:357 – 65. Sharma A, Levy M. Categorization of customers by retail salespeople. J Retailing 1995;71(1):71 – 81. Sharma A, Stafford T. The effect of retail atmospherics on customers’ perceptions of salespeople and customer persuasion: an empirical investigation. J Bus Res, in press. Sujan H, Weitz BA. The effect of level and type of effort on salesperson performance. Working Paper, Pennsylvania State University, 1986. Sujan H, Weitz BA, Sujan M. Increasing sales productivity by getting salespeople to work smarter. J Pers Selling Sales Manage (August) 1988;8:9 – 19. Weitz BA. Relationship between salesperson performance and understanding of customer decision making. J Mark Res 1978;15:501 – 16. Weitz BA, Sujan H, Sujan M. Knowledge, motivation, and adaptive behavior: a framework for improving selling effectiveness. J Mark (October) 1986;50:174 – 91. Williams AJ, Seminerio J. What buyers like from salesmen. Ind Mark Manage (May) 1985;14:75 – 8. Wright P. Schemer schema: consumers’ intuitive theories about marketers’ influence tactics. In: Lutz R, editor. Advances in Consumer Research (vol. 13). Provo: Association for Consumer Research, 1986. pp. 235 – 300. Zielinski D. More firms link pay, cash bonuses to service to sustain longterm change. Serv Edge 1992;5(5):1 – 2. Zielinski D. Farsighted pay plans return high yield in customer satisfaction and retention. Serv Edge 1992;5(12):1 – 2.
Consumer decision-making, salespeople’s adaptive selling and retail performance Arun Sharma* Department of Marketing, University of Miami, P.O. Box 248147, Coral Gables, FL 33124, USA Received 12 December 1998; accepted 1 May 1999
Abstract In this era of ‘‘hypercompetition’’ and growth of ‘‘e-tailing,’’ salespeople are retailers’ key advantage. In order to exploit this advantage, retailers need to better utilize their salespeople. Therefore, retailers should understand the role that salespeople play in consumer decisionmaking and design strategies to enhance the performance of their salespeople and stores. In this regard, the paper examines consumers’ persuasion within the context of consumer – salesperson interaction. Some specific strategies to increase consumer persuasion are then discussed. The role of knowledge structures on salespeople’s performance is then discussed. Finally, potential managerial implications of the research are discussed. D 2001 Elsevier Science Inc. All rights reserved. Keywords: Consumer; Retail; Salespeople
1. Introduction In the last 10 years, there have been fundamental shifts in retailing—growth of the internet and customer fragmentation. The Internet has been attracting consumers that have knowledge of the products and services that they intend to buy and do not need additional retail level help (e.g., customer service). There has been an increase in customer fragmentation as smaller and smaller groups of customers demand products and services tailored to their individual needs (Kahn and McAllister, 1997). For example, the US automobile retailing industry is under tremendous pressure from non-traditional competition primarily because of the improper utilization of salespeople leading to poor sales practices. In response, there has been a growth of large chains such as Auto Nation and Car Max. Also, consumers (estimated at a half of buyers) peruse the Internet before they visit a dealer. Carpoint.com (a subsidiary of Microsoft) sells 10,000 cars per month by referring customers to dealers for a fixed no-haggle price. Similarly, Autobytel.com generates 100,000 monthly inquiries for their customers. In response, General Motors, Ford, and Chrysler are designing web sites that will allow consumers to special* Tel.: +1-305-284-5935; fax: +1-305-284-5326. E-mail address: [email protected] (A. Sharma).
order, compare prices across dealers, and buy automobiles on the Internet. Traditional retailers increasingly need to compete for a smaller subset of fragmented consumers. In this era of customer fragmentation, retail services need to be adapted for consumers and therefore the role of retail salespeople has become more critical. Retail salespeople, as knowledge and customer service agents, are the strengths of traditional retailers. In fact, firms such as Nordstrom have developed a corporate culture based on promoting positive salesperson –consumer interactions and relationships through successful implementation of concepts such as the well-known Nordstrom’s ‘‘personal shopper.’’ Thus, this article concentrates on the effect of retail salespeople’s behavior on consumer decision-making. The motivation of the paper is the absence of research that has integrated the findings of the effect of retail salespeople in enhancing retailing persuasion within consumers’ shopping experience. In this manuscript, we begin with the discussion on consumer decision-making in the context of a retail setting. This is followed by a discussion of three strategies that retail salespeople can use to persuade consumers. Next, we discuss salespeople’s adaptive selling behaviors that influence salespeople’s performance. Finally, the management implications of the research are stressed. Inherent to the paper is the notion that retailers need to understand con-
0148-2963/01/$ – see front matter D 2001 Elsevier Science Inc. All rights reserved. PII: S 0 1 4 8 - 2 9 6 3 ( 9 9 ) 0 0 0 9 0 - 9
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A. Sharma / Journal of Business Research 54 (2001) 125–129
sumer decision-making and also understand the interaction of retail sales strategy and consumer decision-making.
(c) Quality is difficult or too time-consuming to evaluate (Allison and Uhl, 1964; Hoch and Ha, 1986); and (d) Consumers have a need for information (Nelson, 1970).
2. Persuasion knowledge model We use the persuasion knowledge model (PKM) to understand consumers’ processing of salespeople’s behavior and presentations (Wright, 1986; Friestad and Wright, 1994). PKM suggests that both salespeople and consumers develop knowledge regarding persuasion strategies. We first discuss consumers’ knowledge. Consumers’ knowledge contains persuasion elements such as topic knowledge (e.g., service knowledge), persuasion knowledge (e.g., message meanings), and agent knowledge (e.g., characteristics of the salesperson). Consumers’ topic knowledge is their level of knowledge of the retail service to be provided. Topic knowledge facilitates comprehension of the persuasion message and can be used to examine the claims that the salesperson is making (Friestad and Wright, 1994). If consumers have little or no knowledge of the topic, they use their own persuasion model as a resource. The consumer’s own persuasion model provides them with a basis for assessing the likely validity of the salesperson’s message (see Friestad and Wright, 1994). To manage the buying process, consumers have knowledge about the goals and actions of salespeople and the actions that they can take to cope with the persuasion process. Some coping tactics are discounting and message elaboration. As an example, during sales presentations, consumers have ‘‘message thoughts’’ and ‘‘own-thoughts’’ (see Dholakia and Sternthal, 1977; Harmon and Coney, 1982). Message thoughts represent the sales presentation’s information content and will likely reflect the position of the salesperson. Own-thoughts are object-attribution associations stored in memory and pertaining to the message being presented. These own-thoughts may support or counter the position taken by the salesperson. Normally, the consumer’s own-thought is that the primary purpose of the sales message is to ‘‘push’’ the service irrespective of its appropriateness for the consumer. Thus, own-thoughts typically counter the sales message, and discounting of the sales message takes place. Agent knowledge or salesperson knowledge is critical in persuasion. The behavior of salespeople may influence consumers’ perceptions of retailer and retailers’ products. Signaling theory would also suggest the importance of salespeople’s behavior in the evaluation of a retailer as signaling cues are specifically relevant when (Dawar and Parker, 1994): (a) Consumers want to reduce the perceived risk (Jacoby et al., 1971; Olson, 1972); (b) Consumers are unable to evaluate quality (Rao and Monroe, 1988);
Buying at retail stores would reflect all four conditions to some degree. Under these conditions, the behavior of the salesperson operates as a signal that serves as a heuristic in assessing the quality of offerings being considered for purchase (see Dawar and Parker, 1994). Salespeople’s behaviors may influence persuasion because of the need of some consumers to interact with salespeople after the sales interaction. Consumers regard this aspect, the centrality of the salesperson in the consumer’s marketplace relationship as important (Friestad and Wright, 1994). Consumers feel that their knowledge of salespeople becomes more important as there may be expectations of continued relationship. For example, if the product fails to perform to expectations, consumers need to be able to contact the salesperson. Finally, salespeople may be seen as a reflection of the retailer as the behavior of the salespeople may reflect the subsequent service that will be available from the retailer (Friestad and Wright, 1994).
3. Salespeople’s behavior and persuasion Within the context of the persuasion knowledge model, we would like to demonstrate how salespeople’s behaviors could impact consumer decision-making. To demonstrate the effect of salespeople’s behaviors on consumer perception, we provide examples by examining three salespeople’s behaviors that can effect consumer decision-making and persuasion. We begin this section by discussing the ‘‘customer orientation’’ of salespeople — empathy, affect, and availability. We then discuss the credibility of the salesperson and salespeople’s accuracy. 3.1. Salesperson’s customer orientation There are three aspects to salespeople’s customer orientation discussed — salespeople’s empathy, affect, and availability. 3.1.1. Salespeople’s empathy and affect Empathy suggests that salespeople have an ability to put themselves in their consumers’ position and are able to sense the emotions and feelings of consumers. Affect refers to a feeling state that may range from strongly positive to strongly negative. Positive feelings reflect a liking whereas a negative feeling reflects a dislike for the object. When salespeople demonstrate empathy toward consumers, consumers feel that the salesperson has a positive affect toward them. In persuasion research, positive affect and empathy have been associated with higher levels of persuasion (Crockett, 1988; Beatty et al., 1997).
A. Sharma / Journal of Business Research 54 (2001) 125–129
Consumers’ persuasion should be enhanced when they interact with a salesperson that demonstrates empathy and/ or positive affect than when they interact with a nonempathetic salesperson and/or a salesperson demonstrating a negative affect. When a consumer meets a salesperson demonstrating no empathy or demonstrating negative affect, the consumer will likely believe that the salesperson does not have his/her interest in mind. This attribution will increase counter-arguments reducing persuasion. In contrast, a consumer that meets a salesperson demonstrating empathy or a positive affect, the attribution that the salesperson is empathetic or likes the consumer should reduce counterargumentation. Thus, lower levels of counter-argumentation should increase persuasion. The research on liking reported by Cialdini (1984) and research on salespeople by Beatty et al. (1997) and Sharma (1999) support this position. 3.1.2. Salespeople’s availability Consumers want salespeople to be available to help solve their problems. In selling situations, the availability of salespeople to solve consumer problems during and after the selling process has been ranked as being among the most important issues to consumers (Williams and Seminerio, 1985; Cooper and Summer, 1991). Sharma and Stafford (1999) showed that persuasion is enhanced when salespeople are perceived as being available. 3.2. Salespeople’s credibility ‘‘Credibility is the degree to which a communication source or channel is perceived as trustworthy and competent by the receiver’’ (Rogers and Shoemaker, 1971). The credibility of salespeople influences their long-term relationship with buyers (Ganesan, 1994). If an individual perceives a source to possess higher credibility than various other sources, the individual will be more receptive to messages from that source. In sales situations, salespeople’s credibility has also been shown to have a direct effect on product evaluations and buying intentions (Sharma, 1990). Credibility is expected to mediate persuasion by influencing a buyer’s own-thought activation. A salesperson demonstrating credibility is expected to inhibit the buyer’s own-thought activation (or counter-argumentation) which increases the acceptance of the message. In contrast, a non-trustworthy salesperson is expected to increase ownthought activation (or counter-argumentation) reducing the acceptance of a message (cf., Harmon and Coney, 1982). 3.3. Salesperson accuracy The accuracy of retail salespeople’s perceptions of consumer needs is important because salespeople develop strategies based on consumers’ perceived needs (Weitz, 1978). Consumers have differing needs (Beatty et al., 1997). If salespeople are not accurate about their consumer’s needs, their sales presentations will not address the needs of
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the consumers. As salespeople move from transactionoriented selling to relationship selling, the accuracy of salespeople’s perceptions becomes more critical. An accurate assessment of consumers’ needs and development of programs to cater to those needs are essential for relationship marketing. Interestingly, studies have also found that salespeople on average are inaccurate about consumers’ needs (see Sharma and Lambert, 1994).
4. Salespeople skills needed by retailers In Section 3, we discussed some salespeople behaviors that can be used to enhance consumer persuasion. The issue for retailers is to identify the salespeople that can effectively implement these behaviors. Research has shown that no single factor can account for a large percentage of variance in predicting sales performance. Churchill et al.’s (1985) comprehensive meta-analysis examined the relationship between salesperson performance and salesperson aptitude, selling skills, personal characteristics, motivation, and role. Aptitude refers to salespeople’s innate abilities and personal traits (e.g., mental abilities, personality); selling skills refer to learned proficiencies (e.g., sales presentations); personal characteristics refer to physical traits, background, and experience. Churchill et al. found that these factors accounted for an average of 4% of the variance in performance (aptitude accounted for 2%, selling skills for 7.2%, personal characteristics for 3%, motivation for less than 7%, and role for 9%). One would expect that selling skills would explain a larger proportion of variance in sales performance because they are fundamental to any sales interaction. Traditionally, selling skills have been measured by concepts such as technical knowledge, sales comprehension, sales style, empathy, and ability to resolve conflicts (Churchill et al., 1993). Most of the constructs defining selling skills related to salespeople’s ability, rather than the process of selling. We expect that the process of determining and implementing sales strategy should be a critical aspect in determining salespeople’s performance. In Section 3, we discussed how salespeople could enhance persuasion by changing their orientation, availability, and demonstrating credibility based on the needs of consumers. This process, labeled ‘‘adaptive selling,’’ allows salespeople to adapt their presentation based on consumer needs. A conceptual framework of increasing interest and importance that can be used to address the issue of adaptive selling is the categorical model of memory applied to the analysis of the knowledge structures of salespeople (Weitz et al., 1986). The process of categorization is intrinsic to the perception process. It is a method of organizing and interpreting the vast amount of information that is provided by our sensory apparatus (Rosch et al., 1976; Schneider et al., 1979; Barsalou, 1992). Structure is established through categories that enable people to see the world and experi-
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ences as being more stable. In the case of salespeople, categorizing consumers allows them to better structure the selling process. In a sales environment, rather than developing a unique sales strategy for each consumer, effective salespeople are expected to classify them into groups and to use a common strategy for each group. For example, a retail salesperson may classify shoppers as ‘‘sale’’ or ‘‘full price’’ shoppers and develop specific sales strategies for each group. Thus, categorization knowledge is used by salespeople to classify consumers and to select appropriate sales strategies for that category of consumer (Leong et al., 1989). Retailers should be interested in the way salespeople categorize their consumers. Salespeople who utilize a welldeveloped category structure are expected to practice adaptive selling to a higher degree than those who do not. Salespeople who practice adaptive selling to a larger extent are high performers who change their ‘‘colors’’ to match the selling environment (Sujan and Weitz, 1986; Sujan et al., 1988; Kiechel, 1988; Leong et al., 1989). They understand consumer needs, select the best sales strategies, and then suggest products that will satisfy their consumers’ needs. Therefore, retailers need to select and retain adaptive sales people.
5. Retail sales management implications One major facet of a retail sales manager’s job in the era of increased competition is to manage salespeople to develop and maintain long-term relationships with their consumers. Organizations need to design elements of sales management processes to better meet the decision-making needs of their consumers. These issues are discussed next. 5.1. Selection Experienced salespeople demonstrate a higher level of adaptiveness (Levy and Sharma, 1994). Therefore, retailers should attempt to hire experienced salespeople. If inexperienced salespeople are hired, women and more educated recruits demonstrate a higher level of adaptiveness (Levy and Sharma, 1994). Thus, the attributes that are effective in selecting a salesforce are gender, experience, and education. 5.2. Training Salespeople need to be trained to perform adaptive selling. This involves teaching salespeople to categorize consumers based on consumers’ initial expectations. Market research reports and expert salespeople can aid categorization. Specific sales presentations for different consumer categories can also be developed with the help of expert salespeople, marketing research reports, and experimental research. This training leads to adaptations in a salesperson’s actual sales behavior (Weitz et al., 1986; Sujan et al., 1988; Sharma and Levy, 1995). Also, the accuracy of
salespeople’s perceptions of their consumers also needs to be increased by enhancing their listening skills and providing salespeople with market research information about their consumers. 5.3. Supervision Sales managers need to make the sales environment more ‘‘fun’’ and less ‘‘internally competitive’’ (Sujan et al., 1988). These environments allow salespeople to explore their consumer decision-making and also develop better sales strategies. Sales managers also need to be trained to better evaluate salespeople. Research has suggested that retail sales managers are not particularly accurate in evaluating retail salespeople (Levy and Sharma, 1993). This training includes providing data on the performance of salespeople on many dimensions and the use of multiple item scales. 5.4. Compensation A method to motivate salespeople to develop long-term relationships is consumer satisfaction-based incentives. Due to the emphasis on relationship marketing, there is a new thrust in developing consumer satisfaction-based incentive systems (see Evans and Grant, 1992; Hauser et al., 1993). For example, an increasing number of firms such as IBM, Xerox, and dealerships of Saturn, Infiniti, and Chrysler have initiated consumer satisfaction based incentive systems (Zielinski, 1992a,b; Sager et al., 1994). Retailers also need to consider satisfaction-based incentives.
6. Conclusions Retail marketers need to develop strategies to increase consumer patronage. It is said, ‘‘it costs five times as much to get a new customer as it costs to maintain an existing customer.’’ Salespeople are critical in the relationship between consumers and retailers. Retailers and salespeople need to understand consumer decision-making and adapt their behaviors to meet the needs of consumers. The paper examined the role of the salesperson in retail consumer decision-making. Specific recommendations were proposed for retail sales managers. These included the selection, training, supervision, and compensation of retail salespeople.
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