Abstract
The organizational importance for interactions between frontline employees and customers has been examined in relation to dimensions such as climate or culture. In this article, we highlight the importance of pricing strategies – typically studied in relation to consumer preferences – for frontline employees. To do this, we apply an evolutionary perspective and present two complementary studies that focus on the relevance of price discipline in relation to employee attitudes and preferences. Focusing on the industry of new automobile sales since there is important firm-level pricing variation, Study 1 finds a faintly positive relationship among employee prosociality, customer satisfaction, and fixed or “no-haggle” pricing strategies. In Study 2, participants indicated a preference for working in environments that offered the same, non-disparate prices to all customers. While previous research has examined the relationships between employee and customer attitudes in relation to firm performance, our studies emphasize the role that pricing strategies can play as a mechanism in those relationships. Our studies illustrate the value of evolutionary frameworks for contemporary business problems.
Highlights
Concern about one’s relative standing with respect to salary and consumption preferences has been closely studied with the benefit of evolutionary perspectives
While there are relatively few other markets where it is common to negotiate prices in the US, the findings that we report in this article help to account for the dominance of fixed pricing for most consumer-focused firms
In the market of consumer electronics, for example, where customers do not regularly negotiate prices but there is often steep pricing competition, it is interesting in light of our studies that Apple has cultivated a community of fans while concurrently maintaining relatively strict price discipline among the firm’s retail partners
Summary
Concern about one’s relative standing with respect to salary and consumption preferences has been closely studied with the benefit of evolutionary perspectives. Frank (2001, 2012) has repeatedly highlighted broad preferences for relatively high amounts of salary or goods when compared with absolute levels or amounts. While the importance of relative – instead of absolute – fitness across evolutionary time (Wilson, 2004) helps make sense of such concerns, the patterns found by consumption research are even more sensible in an evolutionary light when considering the comparable findings reported from studies of non-human primates. Brosnan and colleagues (e.g., Brosnan and De Waal, 2003; Brosnan et al, 2013) have found a tendency for individuals to react negatively if someone important to them (e.g., in a neighboring cage) gains more than they gain from a common attendant. But based on observations of non-human primates observing human interactions, Anderson et al (2013) find evidence that non-human primates react negatively to people who they observe to be selfish or unhelpful in relation to other people
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