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- Title
Specialist Competitor Referrals: How Salespeople Can Use Competitor Referrals for Nonfocal Products to Increase Focal Product Sales.
- Authors
Blanchard, Simon J.; Hada, Mahima; Carlson, Kurt A.
- Abstract
Intuition suggests that a salesperson should not refer consumers to a competitor for products that they both sell. However, myriad examples reveal salespeople doing just that. The authors study specialist competitor referrals, a sales strategy by which one increases consumers’ purchase likelihood of a focal product (e.g., a painting at an art gallery) by (1) referring consumers to a competitor (e.g., a frame warehouse store) that offers a nonfocal product (e.g., a frame) at a lower price, while (2) stating that the stores differ in their specializations (i.e., the stores concentrate their efforts on different goods). Using a study and survey with salespeople, experimental studies, an incentivized negotiation experiment, and a field study, the authors show that specialist competitor referrals can indeed benefit sellers. Specifically, they build on equity theory to show that specialist competitor referrals increase focal product sales by reducing consumers’ perceived overpayment risk for the focal product via increasing perceived equity in the exchange. The authors also show that competitor referrals for nonfocal products that do not justify the price difference on the nonfocal product are ineffective.
- Subjects
BUSINESS referrals; ECONOMIC competition; SPECIALTY stores; DISTRIBUTIVE justice; CUSTOMER relations; SALES personnel; OVERPAYMENT; SENSORY perception
- Publication
Journal of Marketing, 2018, Vol 82, Issue 4, p127
- ISSN
0022-2429
- Publication type
Article
- DOI
10.1509/jm.16.0269