CONTACT: Christopher R. Plouffe, 575-646-6713, cplouffe
Consumers will rarely buy a home on the spot or ride off in a new truck after one visit to a car dealership. That’s because real estate and vehicles fall into a category of “high-stakes” – or what marketers have long called “high-involvement” – purchases that commonly require a series of interactions between consumers and salespeople before reaching a sale.
“High-involvement” purchases are major investments that tend to be costly and hold great significance to the consumer – and could potentially have negative consequences if the consumer doesn’t get the purchase “right.” Other items that fit into this category include the purchase of a wedding ring or buying a complex financial or insurance product, like an annuity.
But cost and personal risk are not the only distinguishing factors in high-involvement purchases.
The business-to-consumer interaction – a face-to-face engagement between the consumer and a salesperson – is an essential component that separates high-stakes purchases from less significant purchases. Moreover, these human engagements, also known as “B2C” interactions, are not showing any signs of diminishing in today’s digital age.
However, new research shows that salespeople in B2C interactions are facing challenges in adapting to varying levels of consumer “informedness,” a term used by researchers to describe a consumer’s perceived knowledge of products prior to purchasing. Informedness is based on the amount and quality of “research” the consumer has done before interacting with a salesperson.
The interaction between salespeople and consumers with varying levels of “informedness” is now the focus of a new research article co-authored by a marketing professor at New Mexico State University that is set to publish in a top-rated, peer-reviewed marketing journal.
“At its core, it’s an article about trying to make top-of-the-food-chain salespeople more effective in the business-to-consumer world,” NMSU Professor Christopher R. Plouffe said. “These are people who would sell you a car or a real-estate agent who would sell you a house or financial planner who would sell you a $250,000 annuity.”
Plouffe, who also serves as the Robin T. Peterson Endowed Chair in Marketing for NMSU’s College of Business, was one of four researchers who wrote the article, which will be published by the Journal of the Academy of Marketing Science, or JAMS, under the title, “Adapting influence approaches to informed consumers in high-involvement purchases: Are salespeople really doomed?” JAMS is one of just 50 business journals included in the widely respected Financial Times’ FT50 Journal List.
Bryan Hochstein, Willy Bolander and Ronald Goldsmith also co-authored the study, which suggests that the interaction between salesperson influence attempts and consumer informedness plays an important role in purchase decisions.
The research explores six different B2C-salesperson influence tactics that fall into three separate categories:
– Internalization tactics (information exchange and recommendations)
– Compliance tactics (threats and promises)
– Identification tactics (ingratiation and inspirational appeals)
“What the research really tries to inform is which of these influence tactics should salespeople use based on the consumer’s level of informedness,” Plouffe said, explaining that salespeople have to quickly assess each consumer for their “requisite level” of informedness, and then employ the influence tactics they believe best fit that particular scenario.
To test their theory, the researchers conducted two separate studies, Plouffe said.
“In study one, we surveyed 480 customers who went to an auto dealership to buy a car over a one-month period,” he said. “We asked them to identify which influence tactics were used by the salesperson during their interaction.”
The researchers then compiled data from the survey with data showing whether the surveyed customers bought a vehicle, Plouffe said.
“We then used the survey data of the consumers responding to the influence tactics to try to predict whether or not they would purchase,” he said, adding that the “model bore a lot of fruit.”
“We found that for consumers with a low level of informedness, the best approach is to use the compliance influence tactics, including things like threats and promises,” he said. “It might sound counterintuitive, but it’s basically the salesperson calling the consumers’ bluff, or that they are not as informed as they ‘think’ they are.”
But with highly informed consumers, the research suggests that other more positive and flattering influence tactics, like ingratiation or making an inspirational appeal, might work better.
“They’re already informed, so there’s no point in challenging them on their level informedness. Instead the salesperson should adapt and use other tactics that will make them more comfortable, and move the sale along,” Plouffe said.
For the second study, the researchers examined a different sample of consumers – involving the hypothetical purchase of an expensive annuity – to see how various levels of informedness on annuities impacted the purchase decision and what types of influence tactics the salesperson should use.
“We manipulated the participants’ level of informedness and again found support for the findings of study one,” Plouffe said.
Plouffe said it’s important for consumers to understand that informedness varies widely.
“You need to be honest with yourself on where you actually are on that continuum,” he said.
“What we find in this research is that, in general terms, people think they’re a lot more informed than they actually are,” he added. “In high-involvement purchases, consumers should understand that they’re presenting a salesperson with a real challenge – because the salesperson has to deal with your perceived level of informedness and the gaps that might be there.”
If the sales interaction doesn’t go well, Plouffe said, the salesperson may have grabbed “the wrong tools” to influence the consumer. “In this case, the consumer needs to be a little more patient with the salesperson; because they’re not the problem, you are,” he said.