March 2, 2015
It all starts with the sales rep. He or she is on the front line of the battle for corporate revenue. They also are the first and sometimes last contact point a customer has with the company. So who better than to turn to about advice on said customers, correct, than the sales rep? For that reason, when the sales rep urge headquarters to come down a notch on pricing, their opinion should seriously be considered, right?
Maybe, according to academic research on the subject—but first have the sales reps strenuously argue the case as to why a price should be lowered.
So found a study that ran in the November issue of Marketing Science, a publication of the Institute for Operations Research and the Management Sciences (INFORMS).
The study, called "Why do sales people spend so much time lobbying for low prices?" was conducted by Duncan Simester, the Nanyang Technological University Professor of Management Science, and Juanjuan Zhang, Associate Professor of Marketing, both at the MIT Sloan School of Management.
