When salespeople advocate for sellers and customers

January 08, 2021

Researchers from Oklahoma State University, University of Missouri, Iowa State University, and University of Georgia published a new paper in the Journal of Marketing that investigates the question of how salespeople should balance advocacy for the seller with advocacy for the customer.

The study, forthcoming in the Journal of Marketing, is titled "Salesperson Dual Agency in Price Negotiations" and is authored by Justin Lawrence, Lisa Scheer, Andrew Crecelius, and Son Lam.

How should salespeople represent both the seller and the customer when their interests diverge, as in pricing negotiations? The research team extends a dual agency framework to the sales domain and examines the salesperson's role throughout the three stages of the discount process: (a) the customer's discount request, (b) the seller's approval, and (c) the seller's post-approval profit. This framework is tested across three multimethod studies and provides the first empirical investigation that deconstructs the sequential B2B customer-specific discount process.

The study concludes that the most favorable outcomes result when the salesperson engages in high levels of both customer advocacy and seller advocacy. As Lawrence explains, "Traditional agency theory research focuses on the salesperson as an agent of the seller. In contrast, we emphasize that the customer also considers the salesperson as its agent. As a result, the salesperson is unlikely to succeed as a seller advocate without also engaging in customer advocacy. For salespeople, our research offers guidance on a classic dilemma: the tension between the customer's desire for a lower price and the seller's insistence on demonstrating the value of its offering rather than compromising on price."

"Our findings are liberating for salespeople; they need not choose a side in discount negotiations. Instead, they can compartmentalize their duties. When dealing with the customer, they act as a fierce advocate for the seller; when dealing with seller personnel, they are a strong customer advocate" adds Scheer. This compartmentalization, somewhat paradoxically, enables the synergistic relationship between the two forms of advocacy and drives superior outcomes for both firms.

Although a salesperson's forceful advocacy on a customer's behalf may appear to threaten the seller's bottom line, sellers should consider that salesperson customer advocacy may be vital to a profitable relationship with the customer. Sellers are advised to encourage salespeople to serve as agents of their customers while also effectively acting as agents of the seller. Sales training programs, for example, can emphasize the importance of taking concrete actions to develop deep understanding of the customer's needs, effectively representing the customer's interests, and advocating forcefully for discounts and other seller concessions and assistance when warranted to bolster the customer's business and deepen the relationship.

One practical approach for sellers to leverage salesperson dual agency to their advantage is to encourage the development of multiple interfirm linkages with the customer, including cross-boundary interpersonal ties. Similarly, allowing a customer to learn more about the salesperson's customer advocacy amplifies the effectiveness of seller advocacy toward that customer. Following the seller's discount decision--even if the discount was denied--sales managers or pricing personnel can find ways to notify customers how the salesperson went to bat for them.

Customers should not hinder seller efforts to learn more about the salesperson's seller advocacy. For example, the seller might send the customer a survey asking about the salesperson's behaviors. Customers should view this as an opportunity to improve the seller's certainty about the salesperson's faithful representation. These findings differ from the implications of extant sales theories and prior sales research, which suggest that the salesperson serving two masters whose objectives are opposed (as with discounts) can lead to role stress and reduced performance.

Salespeople, sales managers, and organizational buyers can find value in this research. Whereas sellers warn salespeople not to 'be sold by the customer,' the findings suggest that sellers should encourage salespeople to advance the customer's agenda in discount negotiations. Engaging in seller advocacy, without customer advocacy, is likely to be ineffective or even lead to reduced seller profit. Customers and sellers can benefit from understanding that salesperson's advocacy for the other party is mutually beneficial and an important part of the salesperson's role.
-end-
Full article and author contact information available at: https://doi.org/10.1177%2F0022242920974611

About the Journal of Marketing

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Christine Moorman (T. Austin Finch, Sr. Professor of Business Administration at the Fuqua School of Business, Duke University) serves as the current Editor in Chief. https://www.ama.org/jm

About the American Marketing Association (AMA)

As the largest chapter-based marketing association in the world, the AMA is trusted by marketing and sales professionals to help them discover what is coming next in the industry. The AMA has a community of local chapters in more than 70 cities and 350 college campuses throughout North America. The AMA is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences. https://www.ama.org

American Marketing Association

Related Marketing Articles from Brightsurf:

How to maximize the potential of marketing agility
Marketing agility is best suited for those marketing decisions where the market response is highly unpredictable, the decision parameters can be broken down into smaller components, and when it is feasible to get quick customer feedback, and when there is less dependence on third parties for executing the marketing activity.

Covert tobacco industry marketing tactics exposed by former employees
Tobacco companies use covert marketing tactics and exploit loopholes in Australian tobacco control laws to promote their products despite current tobacco advertising bans, finds new research from University of Sydney and Cancer Council NSW.

The three strategic priorities of marketing excellence
Investors value marketing excellence more highly than they value strategies based on market orientation and marketing capabilities.

How nonprofits can boost donations using the marketing mix
Nonprofits may better meet their missions by learning to effectively employ the entirety of the marketing mix to attract individuals to available donation opportunities.

Marketing researchers identify the three most powerful drivers of effective crowdfunding
While the concept of crowdfunding is still in its early phases of development, a group of marketing researchers have conducted a study that reveals the most powerful drivers behind effective crowdfunding campaigns.

Alcohol marketing and underage drinking
A new study by a research team including scientists from the Prevention Research Center of the Pacific Institute for Research and Evaluation provides a systematic review of research that examines relationships between exposure to alcohol marketing and alcohol use behaviors among adolescents and young adults.

Scholars explore role of digital environments in international marketing
Journal of International Marketing launched its 2020 volume with a special issue examining new implications of the digital environment related to the study of international marketing.

Study: Pharmaceutical companies marketing stimulants to physicians
Results of a new study show that a large number of physicians in the US may have received marketing payments from pharmaceutical companies that produce stimulant medications.

Automated text analysis: The next frontier of marketing innovation
The volumes of text data generated in the marketplace can be valuable in generating marketing insights using the newest text analysis methods and technologies.

Global study reveals most popular marketing metrics
Satisfaction is the most popular metric for marketing decisions around the world, according to a new study from the University of Technology Sydney.

Read More: Marketing News and Marketing Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.