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Eyeing that pricey handbag? Prepare to be insulted


The following is from the Sept. 1, 2014, edition of CNBC. This story is based on research by Morgan Ward, an assistant professor of marketing in SMU's Cox School of Business. The research was published in The Journal of Consumer Research.

Morgan Ward
Morgan Ward

From Cox Research News:

Have you ever had to pump up your self-esteem before entering a luxury goods store like Hermes or Chanel? 

New research by Marketing Professor Morgan Ward of SMU Cox School of Business and co-author Darren Dahl, University of British Columbia, offer a contemporary analysis of an age-old problem — the effects of salesperson snobbery in luxury goods purchases.

The authors found that in the long run, rejecting customers doesn't pay off.

In Ward's assessment, there is a major takeaway: "If salespeople are rejecting consumers that aspire to own the brand, in the short term, the consumer will be more interested in purchasing, wearing and displaying the brand. While this gains the affiliation and loyalty of the new consumer and a hefty sale in the short term, in the long term it is not the case."

A rejection-aspiration complex

Rejection or condescending attitudes are notably experienced by consumers from sales staff at luxury retailers. Complaints by consumers have made some luxury retailers train staff to be more approachable, including changes to store facades. Louis Vuitton adorned its Beverly Hills Rodeo Drive entrance with a cartoonish, smiling apple figure meant to be welcoming, the researchers note. Customer service research supports the practice of training personnel to be friendly and inviting to attract and retain loyal and satisfied customers. 

The research challenges this notion by exploring how negative customer service experiences can, in some instances, facilitate more positive attitudes and customers’ desire for the brand.

People's innate need to belong to social groups that define and affirm their identities is a source of the rejection-aspiration complex that the research aims to break down. People will go to great lengths to re-establish their social standing in important in-groups after a rejection, attempting to find social harmony, say the authors. Their findings come from a four-part study.

A downside of the rejection is the effect over time, Ward says. "If someone already 'fits in' with the brand, they are immune to the rejection, but not those that aspire to own or be the brand," she adds. Aspirational groups are the newly wealthy or those with new financial means owing to the age of the consumer. "You may reject potentially really lucrative customers in the short term but in the long term they are not brand loyal," notes Ward.

Consumers are more responsive to rejection from salespeople of brands that represent an ideal self-concept, such as the luxury goods of Prada and Louis Vuitton, or the eco-conscious Toyota Prius. A consumer's relationship with a brand is developed over time, the research notes and their results are likely to be brand-specific.

Read the full story.

September 2, 2014

By Bob Sullivan

As a broke graduate student at the University of Texas four years ago, Morgan Ward had an Achilles' heel for luxury brands. But when she'd walk into a high-end store in less-than designer duds, the sales clerks weren't very accommodating.

"I asked to see a bag behind the counter and [a salesman] said, 'Well, I'll show it to you, but it's very expensive,' " Ward recalled.

But a curious thing happened when he said this.

"Despite the feeling of condescension, I noticed it didn't send me running out of the store," she said. In fact, it made her want the pricey bag even more. "[I thought,] I'll show him ... and I wondered if I was the only one.

It turns out she's not. Now a marketing professor at Southern Methodist University's Cox School of Business, Ward tested her theory with Darren W. Dahl of The University of British Columbia, in a study to be published in October's Journal of Consumer Research. In one of the experiments they found that consumers who were treated poorly by sales staff were willing to pay 10 percent more than others.

For the study, titled "Should the Devil Sell Prada?" researchers sent two groups of consumers into a simulated retail experience. One group encountered actors who were instructed to "take a long look at the participant at the door [and] appear unimpressed," among other rude behaviors. The control group entered a neutral environment.

The researchers then measured both groups' willingness to pay for the items in question, and found customers who had been insulted routinely said they'd pay more. In one scenario, insulted shoppers said they'd pay $31,000 for a hypothetical car being sold under the Toyota brand. The control group, on the other hand, said it was worth only $24,000.

Ward equated the reaction to high school kids who, when getting the cold shoulder from a member of the "in" crowd, work harder to be accepted. Being rejected by exclusive brands taps into the same human nature, Ward said.

"We are pack animals. We don't want to be rejected by any groups," she said.

Read the comments. . .

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