Do we understand how well we negotiated? Accuracy of detecting dealer profitability and customer subjective value in new car sales

Researchers know little about the extent to which people can judge the quality of their performance in negotiations. Sampling actual customers buying new cars at the point-of-sale, this study examined these customers’ judgments of profitability, as well as their feelings of subjective value with the negotiation. Salespeople also provided their judgments, both of deal profitability and their attributions about customer subjective value. Sales managers provided authoritative data on profitability. Results of this unique field research told a nuanced story. Customers’ attributions of profitability corresponded to those of salespeople, but not of sales managers, suggesting that they picked up on cues only from their immediate relational contact. Salespeople were able to judge subjective value in terms of customers’ feelings about the instrumental deal terms, but not customers’ feelings about the self, process, or relationship. There appeared to be no tradeoff for the dealership between making a profit and having satisfied customers.