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Cited by 149Customer Service Quality and LoyaltyConsumer Market Behavior and PricingConsumer Retail Behavior Studies

Willing to Pay More, Eager to Pay Less: The Role of Customer Loyalty in Price Negotiations

Wieseke, Jan, Alavi, Sascha, Habel, Johannes·2014·Journal of Marketing
DOI 10.1509/jm.13.0104
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Abstract

This article is the first to empirically examine the effect of customer loyalty in retail price negotiations. Across three field studies and one negotiation experiment, the authors establish what they call the “loyalty–discount cycle”: in price negotiations with salespeople, loyal customers receive deeper discounts that, in turn, increase customer loyalty, resulting in a downward spiral of a company's price enforcement. The reason for the positive effect of customer loyalty on discount is twofold: (1) loyal customers demand a reward for their loyalty and invoke their elevated perceived negotiation power, and (2) to retain loyal customers, salespeople grant discounts more willingly. Furthermore, the mechanisms are moderated by the basis of a customer's loyalty (price vs. quality) and the length of the relationship between the salesperson and the customer. To escape the loyalty–discount cycle, salespeople can use functional and relational customer-oriented behaviors. The study helps managers and salespeople optimize their price enforcement and servicing of loyal customers.

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Cited by

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Authors
Wieseke, J., Alavi, S., & Habel, J.
Affiliations
  • Loughborough University (GB)
  • Ruhr University Bochum (DE)
  • European School of Management and Technology (DE)
ORCID
Venue
Journal of Marketing
Publisher
SAGE Publications
Published
2014-11
Volume
78
Issue
6
Pages
17-37
ISSN
  • 0022-2429 (ISSN-L)
  • 1547-7185
DOI
10.1509/jm.13.0104
OpenAlex
W2106110204
Cited by
149
References
7
Citations by year
2026: 9 · 2025: 12 · 2024: 12 · 2023: 20 · 2022: 18 · 2021: 16 · 2020: 8 · 2019: 9 · 2018: 13 · 2017: 16 · 2016: 9 · 2015: 7
FWCI
23.46
Type
journal article
Language
en
Open access
closed
Licence
journals.sagepub.com/page/policies/text-and-data-mining-license (tdm)
Locations
  • Journal of Marketing (publishedVersion)
  • Warwick Research Archive Portal (University of Warwick) (acceptedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Customer Service Quality and Loyalty
  • Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
  • Social Sciences › Business, Management and Accounting › Marketing › Consumer Retail Behavior Studies
Keywords
customer loyalty, price negotiation, discounts, salespeople, relationship duration, customer-oriented behavior, retail pricing

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