Why are Some Salespeople More Aggressive than Others?

Wan-Ju Franz ()

Atlantic Economic Journal, 2014, vol. 42, issue 4, 383-397

Abstract: Why are salespeople in certain industries (such as cars and mattresses) aggressive, while their counterparts in other industries (such as luxury boutiques) relatively customer-oriented? Using a principal-agent-customer model, this paper demonstrates that the level of salesperson aggressiveness depends on: (1) the proportion of customers with a high willingness to pay; (2) whether or not customers are well-informed and (3) repeat customers. If the proportion of customers with a high willingness to pay is relatively large, then salespeople tend to be customer-oriented. By contrast, if the proportion of customers with a high willingness to pay is relatively small, then salespeople tend to be aggressive toward uninformed customers while well-informed customers shun the store. Finally, if the proportion of customers with a high willingness to pay is relatively small, then in an infinitely repeated game, the agent can close sales with well-informed customers without being aggressive, provided that the principal is patient enough about future profit. Copyright International Atlantic Economic Society 2014

Keywords: Salesperson behavior; Sales tactics; Game theory; Marketing; M3; D0 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s11293-014-9427-1

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