Boston University School of Management Research Paper Series ...

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Boston University School of Management Research Paper Series ...

Boston University School of Management Research Paper Series

No. 2010-25

‘‘Does it Pay to Beat Around the Bush?

The Case of the Obfuscating Salesperson?’’

Barbara Bickart

Maureen Morrin

S. Ratneshwar

Electronic copy available at: http://ssrn.com/abstract=1701042

Electronic copy available at: http://ssrn.com/abstract=1701042


Does it Pay to Beat Around the Bush?

The Case of the Obfuscating Salesperson

Barbara Bickart

Boston University, School of Management

595 Commonwealth Ave., Boston, MA 02215

Tel: 617-353-3458 Fax: 617-353-4098

bickart@bu.edu

Maureen Morrin

Rutgers University, School of Business

227 Penn St., Camden, NJ 08102

Tel: 856-225-6713 Fax: 856-225-6231

mmorrin@rutgers.edu

S. Ratneshwar

University of Missouri

Trulaske College of Business

403C Cornell Hall, Columbia, MO 65203

Tel: 573-882-3478 Fax: 573-884-0368

Ratneshwar@missouri.edu

Keywords: Consumer Psychology, Salesperson Communication, Persuasion Knowledge

Electronic copy available at: http://ssrn.com/abstract=1701042


When a salesperson does not know the correct answer to a prospective customer’s question, one

way to deal with the matter is to obfuscate, that is, to cloud the issue by providing irrelevant

information. Does obfuscation pay? Or are there situations where obfuscation severely backfires?

We investigate these questions with three studies set in the context of interactions between

financial advisors and prospects. A preliminary study confirms that in a situation where a

financial advisor does not know the answer to a prospect’s question but can earn a commission

on the sale, a large majority of consumers indeed expect an obfuscatory response rather than an

honest “don’t know.” The two other studies show that consumer trust and investment intentions

are significantly undermined by an obfuscatory response when compared to a “don’t know,” but

again only when a commission motive is salient. Thus, while obfuscation may appear to be a

tempting alternative in the short run, obfuscating salespersons never benefit relative to admitting

a lack of knowledge. Implications are discussed in terms of persuasion theory and salesperson

influence tactics.

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Electronic copy available at: http://ssrn.com/abstract=1701042


Professors, politicians, and salespersons share a peculiar occupational hazard—they

regularly encounter factual questions for which they should know the answers on the spot, but

often don’t. In dealing with such situations, a person has three clear response options: (1) Do the

right thing and admit to not knowing the answer, (2) bluff with a false answer, or (3) obfuscate,

that is, dodge the actual question but provide a pseudo-answer with irrelevant, tangential, or

vague information. The first option is normatively appropriate, but likely entails significant

damage in expertise perceptions and esteem. The second option is also quite risky, since bluffs

and outright falsehoods could be detected, thereby leading to a total loss of credibility. Option

(3), on the other hand could be an appealing way out of the situation: the question appears to

have been answered (even if ambiguously), and one can hope that the conversation and the

questioner will move on to other matters. Therein lies the appeal of obfuscation.

The word obfuscate has its origins in the 16 th century Latin word obfuscatus, meaning “to

darken.” A contemporary definition of the word is “to make so confused or opaque as to be

difficult to perceive or understand.” Synonyms of the word include conceal, cover up, eclipse,

and shade. Obfuscatory responses, as noted earlier, are plausible in a wide range of social

interactions and communication situations. Writers (e.g., Berkoff 1981) have noted its

widespread prevalence in marketing tactics, and the present authors, in their everyday

experiences as classroom professors, are not unfamiliar with the temptations of obfuscation. Yet,

perplexingly, virtually no scholarly research appears to have been published on this topic.

Our interest in this matter focuses on interactions between salespersons and prospective

customers. As noted earlier, the major motivation for obfuscation is that it potentially allows a

salesperson to answer a prospect’s question in a seemingly reasonable way, as opposed to a

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candid yet potentially damaging admission of lack of knowledge or an answer that is a willful

and risky act of pure fabrication. The use of obfuscation could be particularly tempting for

novice salespeople, given their more limited knowledge, possible lack of confidence, and desire

not to lose a potential customer. It might also be tempting for those under considerable

performance pressure, such as in the form of aggressive sales quota targets. In the present

research, we explore three important questions in regard to obfuscatory tactics. First, to what

extent do consumers believe that obfuscatory responses are likely from salespersons? Prior

research has shown that consumers often have well-established beliefs and expectations

regarding salespersons and the persuasion process (Campbell and Kirmani 2000; Friestad and

Wright 1994, 1995; Sujan, Bettman, and Sujan 1986). Scholars have also suggested that

consumers can harbor suspicion-filled, “dark side” schemas about salespersons’ relationship-

building overtures (Beatty et al. 1996; Fournier, Dobscha, and Mick 1998; Grayson 2007). We

build on this literature by examining empirically consumers’ beliefs about what salespersons are

likely to do when they do not know the answer to a prospect’s question.

Second, while obfuscation arguably has pragmatic value, does it actually help

salespersons to sell a product or might it backfire? Clearly, the answer to this question is

important from an ethical and consumer welfare standpoint. If obfuscating salespersons are more

likely to close a sale than their “come clean” counterparts, there would be an economic incentive

to behave unethically (Kalra, Shi, and Srinivasan 2003). In addition, since obfuscation amounts

to less transparency in communications with consumers, their welfare would be at jeopardy. On

the other hand, if obfuscation is likely to get punished in the marketplace in terms of a decrease

in a prospect’s willingness to buy the product, honesty might turn out to be always the best

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policy. In this case, there would be an economic disincentive—at least in the long run—for the

salesperson to behave in a way that potentially harms consumer welfare.

Third, do the answers to the first two questions depend on other variables such as a

prospect’s cognizance of the salesperson’s motives? Some prior studies have shown that

consumers’ perceptions of salespersons’ motives can affect how the latter’s communications are

interpreted (Campbell & Kirmani 2000; DeCarlo 2005). A recent study has also found that

disclosing financial motives for referrals may help enhance perceptions of sincerity among

friends interacting in sales situations (Tuk et al. 2009). Based on these prior studies, it seems

plausible that a prospective customer’s knowledge of a salesperson’s motives might play an

important role in how obfuscation impacts purchase intentions.

We present three studies that investigate the aforementioned questions in the context of

communications between financial advisors and prospective customers. Recent events such as

the sub-prime mortgage scandals and large-scale Ponzi schemes have brought to the fore a rising

level of consumer distrust in the financial services industry in general and financial advisors in

particular (Wartenberg 2009; Weston 2009). Indeed, a recent article in a popular business

magazine suggests that individuals in the financial sector have “the furthest to go in regaining

consumer trust” (Young 2009). Further, academic scholars and industry observers seem to agree

that transparency in communications is central to the development of consumer trust in a

financial advisor (Knowledge@Wharton 2007). As such, we believe our research context is very

suitable for studying the issue of obfuscation in salespersons’ communications with consumers.

We first present a preliminary study in which we examine consumers’ expectations of

whether a salesperson is likely to obfuscate versus provide an honest “don’t know” when the

person does not know the answer to a prospect’s question. Next, we present the main study in

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which we develop and test a theoretical framework and a set of formal hypotheses regarding the

effects of salesperson obfuscation. In developing our theoretical framework, we draw on prior

research in persuasion (Campbell and Kirmani 2000, Friestad and Wright 1994, 1995). We also

take into account work in social cognition on the role of attributional reasoning in conversational

inferences (Fein 1996; Hilton 1995) and the literature on deception in communication theory

(Buller and Burgoon 1996; Burgoon et al. 1996; Carlson et al. 2004). Lastly, we discuss a

follow-up study wherein we investigate consumers’ thought processes directly so as to better

illuminate the process mechanism implicit in our theorizing. In both the main and follow-up

studies, we focus on the moderating role of salesperson motive and the mediating role of

consumer trust perceptions and trust-related thoughts.

PRELIMINARY STUDY

We explore here consumer expectations regarding what a salesperson is likely to do when

he/she does not know the answer to a prospective customer’s question. More importantly, we

also investigate whether these expectations might vary as a function of whether or not the

salesperson is motivated by a commission on the sale. Honeycutt et al. (2001) found in a survey

of auto salespersons that the likelihood of unethical sales practices increases when compensation

is based on commissions rather than salary (see also Kalra et al. 2003). Based on their findings

and the authors’ own experiences and intuitions as consumers, we expect that in situations where

a salesperson does not know the right answer to a prospect’s question, consumers will be more

likely to predict an obfuscatory response (vs. an honest “don’t know”) when they are cognizant

that the salesperson works on a commission.

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Method

Overview. We utilized a scenario that is a very common event in many organizations,

namely that of an employee trying to decide whether or not to open a 401k retirement plan

account after a conversation with a financial advisor who represents one of the employer’s

retirement plan providers. Note that in the financial services industry, financial advisors are

typically well trained in consultative selling and their usual goal is to establish long-lasting

relationships with prospective customers based on the sales of various financial products. Also,

industry practice varies considerably both across and within firms in terms of the proportion of

the financial advisor’s compensation that is based on sales commissions. As such, our research

context has high ecological validity in terms of providing a setting where a salesperson (i.e.,

financial advisor) may or may not be working for a sales commission.

The study participants were 37 adults who were approached at the entrance to a baseball

stadium in a large metropolitan area and asked to fill out a short questionnaire in exchange for a

small gift. Males and females were about equally represented in the sample, with a median age of

40. Participants read a conversation that purportedly took place between the employee (a

prospective customer) and a financial advisor and then provided their responses (see below for

more details). The study design manipulated between-subjects the salesperson’s motive

(commission vs. no commission).

Procedure and Measures. Participants were asked to imagine a situation where an

employee has taken a new job and the employer offers the opportunity to invest in a 401k

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etirement plan. The employee calls one of the financial services firms that the employer has

authorized for 401k plans. The employee is put in touch with one of the firm's financial advisors.

After reading this scenario, participants then read additional information wherein we

manipulated the salesperson’s motive as follows.

In the commission motive condition, participants were told that the financial advisor's job

was to eventually persuade the employee (i.e., prospective customer) to sign up for a 401k plan

with the advisor's particular financial services firm. Further, participants learned that the

financial advisor's earnings were based purely on sales commissions and thus the advisor's

compensation would be affected by the employee’s investment decision. In the no commission

motive condition, participants were informed that the financial advisor's job was to simply

provide the employee with the information needed to make “good decisions about retirement

investing.” Additionally, it was emphasized to the participants that the financial advisor would

not earn a sales commission or any other kind of compensation based on the employee’s

investment decisions.

Participants then went on to read an excerpt from a purported conversation between the

employee and the financial advisor (see appendix). In this conversation, the employee asks

several questions and receives correct answers. Eventually, the employee asks the target

question: "Until now, I have been contributing money into an IRA every year. If I contribute to

the 401k plan offered by my employer, could I still contribute to my IRA?" Right after the target

question, participants were asked to make a prediction of the salesperson’s response with the

following instructions:

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“The advisor DOES NOT know the answer to this question. Given that the advisor does

not know the answer to this question, which of the following two responses would a typical

financial advisor be more likely to give?

� I have to admit, I just don't know. But I will find out for you.

� 401k plans are a great investment. As we discussed, contributing to a 401k has tax

advantages. For example, you don't have to pay income taxes on the amount you

contribute to a 401k until you later take it out during retirement. Moreover, your

employer will match some part of your contribution.”

The first answer above is an honest "don't know" response. The second answer represents

an obfuscatory response since it dodges the actual question and provides information that merely

clouds or confuses the issue.

Results and Discussion

A large majority of the participants (75%) in the commission motive condition predicted

that the salesperson would obfuscate. In contrast, only a minority (38%) of the participants in the

no commission motive condition anticipated obfuscation, and the difference between the two

conditions was statistically significant (Fisher's Exact Test, p < .05). Hence the results of this

preliminary study supported our initial conjecture that consumers are more likely to expect an

obfuscatory response when they know that a salesperson is motivated by a commission on the

sale. These perceptions are likely to be grounded in consumers’ actual experiences, suggesting

that obfuscation is a tactic that is at least occasionally encountered by consumers in their

interactions with salespeople.

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MAIN STUDY

Mutually beneficial communications between salespersons and prospective customers

can be usefully viewed in terms of a conversational metaphor (Blattberg and Deighton 1996).

Such communications hence should be governed by many of the same norms that are implicit in

good conversations in everyday life. For example, it would be normal to expect that the

participants to a conversation cooperate and both try to make sense of what is being said. Two

other key assumptions underlying conversational norms are that that a communication will be

comprehensible as well as truthful (Grice 1989). These norms lead to a truth bias, in which a

person generally assumes that what is said is truthful unless there are indications to the contrary

(Levine and McCornack 1991).

A deceptive communication is one that is intentionally sent to foster a false belief or

conclusion by the receiver (Buller and Burgoon 1996). It can involve direct fabrications as well

as more subtle acts such as half-truths, concealments, and vagueness (Burgoon et al. 1996;

Carlson et al. 2004). Communication scholars have noted that in order to avoid being caught in

outright falsehoods, deceptive communicators may resort to obfuscation by providing unclear,

vague or irrelevant information in their messages (Burgoon et al. 1996; Carlson et al. 2004).

Obfuscation by its very nature is an ambiguous behavior. We therefore assume that when

the recipient of a communication detects an act of obfuscation, the degree to which it is viewed

as a serious violation of a conversational norm will depend on contextual factors. Hilton (1995)

proposes an attributional model for conversational inferences. According to this model,

unexpected events or contextual cues can trigger an attribution process wherein perceptions or

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assumptions about the speaker’s motives affect the manner in which conversational norms are

interpreted in any given situation (DeCarlo 2005; Fein 1996; Hilton et al. 1993).

More insight on the role of attributional processes in consumers’ responses to

salespersons’ communications comes from research in persuasion (Friestad and Wright 1994,

1995). Friestad and Wright (1994) have argued that consumers often have relatively

sophisticated knowledge structures or schemas regarding the persuasion tactics adopted by

advertisers and salespersons. Consumers interpret salespersons’ communications through the

lens of these schemas and draw inferences accordingly. For example, Campbell and Kirmani

(2000) have found that when consumers sense that a salesperson has ulterior motives, they doubt

the sincerity of pleasantries offered by that individual.

Based on the literature discussed in the preceding material, we propose that the manner in

which a prospective customer responds to an obfuscatory response from a salesperson will

depend upon what is known a priori about that person’s motives. Consider first a situation where

the prospect is cognizant that the salesperson’s earnings depend solely on sales commissions.

This is a common practice in many industries, including the financial services sector. In such a

situation, the salience of the salesperson’s motive to close on the sale should activate the

consumer’s persuasion knowledge schemas (Campbell and Kirmani 2000; DeCarlo 2005).

Further, as indicated by the results of our preliminary study, such schemas are likely to include

the “dark side” belief that given a sales commission motive, a salesperson is likely to obfuscate

when he/she does not know the answer to a question. If the prospect now in fact detects an

obfuscatory response from the salesperson, this should provide confirmatory evidence in support

of the initial belief (Deighton 1984; Forehand and Grier 2003; Sujan et al. 1986). Consequently,

the obfuscatory response is likely to be interpreted as a serious violation of conversational

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norms, specifically the expectation that communications shall be comprehensible and truthful.

This should lead to negative inferences about the sincerity and trustworthiness of the salesperson,

which in turn should have a negative effect on purchase intentions.

But given the same sales commission motive, what if the salesperson candidly admits to

not knowing the answer to the prospect’s question? It could be the case that this admission might

have a damaging effect on the perceived expertise of the salesperson and raise doubts about

his/her competence. On the other hand, the straightforward “don’t know” should also directly

contradict the prospect’s schematic beliefs and accompanying skepticism regarding the types of

answers one should expect from a commission-based salesperson who does not know the answer

to a customer’s question (Forehand and Grier 2003; Sujan et al. 1986). This honest response

should help counteract any initial suspicion or mistrust the prospect might have had regarding a

commission-based salesperson. This factor should also compensate for any damage caused by an

honest “don’t know” to the perceived competence of the salesperson. The implication is that in

the presence of a sales commission motive, an honest “don’t know” should fare significantly

better than an obfuscatory response in regard to the prospect’s purchase intentions.

Consider now a situation where a prospective customer is fully aware that a salesperson

will not earn any sales commissions on purchases. In such a situation, given the absence of an

ulterior motive, it is unlikely that consumers will activate “dark side” beliefs and expectations

regarding salesperson behaviors (Campbell and Kirmani 2000). Further, research in attribution

theory has shown that unless sufficiently motivated to do otherwise, social perceivers generally

act as cognitive misers in that they prefer to simplify the interpersonal evaluation process by

arriving at quick and automatic social inferences (Hilton et al. 1993). In this situation therefore

an obfuscatory response is unlikely to be interpreted as a serious violation of conversational

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norms regarding message comprehensibility and truthfulness. We accordingly predict that in a

situation where the prospect is cognizant that a salesperson is not motivated by the prospect of

sales commissions, an obfuscatory response will fare no worse than a candid “don’t know.”

More formally, we offer the following two-part hypothesis:

H1a: When a prospect is aware that a salesperson has a commission motive, an

obfuscatory response (vs. a “don’t know”) will result in lower purchase

intentions.

H1b: When a prospect is aware that a salesperson does not have a commission motive,

an obfuscatory response (vs. a “don’t know”) will not affect purchase intentions.

Although the main focus of our study is on examining the effects of obfuscation in

reference to a normatively appropriate “don’t know,” from a benchmarking standpoint it is also

useful to compare the former against a situation where the salesperson does in fact provide the

correct answer. Our predictions and underlying logic parallel the preceding discussion wherein

we argued that an obfuscatory response would damage trust perceptions and purchase intentions

when a sales commission motive is operative, but not otherwise. Formally:

H2a: When a prospect is aware that a salesperson has a commission motive, an

obfuscatory response (vs. a correct answer) will result in lower purchase

intentions.

H2b: When a prospect is aware that a salesperson does not have a commission motive,

an obfuscatory response (vs. a correct answer) will not affect purchase intentions.

Finally, our theorizing assumes that given the activation of persuasion knowledge

schemas in the commission motive condition, an obfuscatory response (vs. a “don’t know” or a

correct answer) should result in more consumer skepticism, distrust, and suspicion. Further, it is

13


such feelings of increased distrust that do the damage in terms of lowering purchase intentions.

Thus, in the presence of a commission motive, trust perceptions will mediate the effects of

salesperson response on purchase intentions. More formally:

Method

H3a: When a prospect is aware that a salesperson has a commission motive, trust

perceptions will mediate the effects of an obfuscatory response (vs. a “don’t

know”) on purchase intentions.

H3b: When a prospect is aware that a salesperson has a commission motive, trust

perceptions will mediate the effects of an obfuscatory response (vs. a correct

answer) on purchase intentions.

Overview. The study consisted of a full factorial experiment with a 2 (salesperson motive:

commission vs. no commission) x 3 (salesperson response to a target question: “don't know” vs.

obfuscatory response vs. correct answer) design. The study was conducted via the Web, with all

participants randomly assigned to one of the six cells. The 255 adult participants were recruited

from among parents at an elementary school, members of a Rotary club, and graduate students at

a large state university. The students participated for a chance to win a cash prize in a drawing.

All other respondents participated for a $9 donation to their organization. We found no

significant differences across these groups. Demographic data collected at the end of the online

questionnaire indicate the following participant characteristics: 54% female, an average age of

41 years, and 78% currently with a 401k plan.

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Procedure and Measures. Participants were provided the following instructions:

“We would like you to imagine a situation where you have taken a new job and your

employer offers you the opportunity to invest in a 401k retirement plan. You call one of the

financial services firms that your company has authorized for 401k plans. You are put in touch

with one of the firm's financial advisors. You then have the conversation described shortly with

this financial advisor. Note that you will read an excerpt that describes only the first part of your

conversation rather than the entire conversation.”

Participants were also informed that after reading the conversation excerpt, they would be

asked about their impressions of the financial advisor and asked to make an investment decision.

Next, participants were provided information pertaining to the salesperson motive manipulation.

Salesperson motive (commission vs. no commission) was manipulated in the exact same manner

as in the preliminary study. After reading this information, participants went on to read the

excerpt of a conversation with a financial advisor regarding the opportunity to invest in 401k

retirement accounts (see appendix for verbatim details). About midway through the conversation,

the prospective customer asks the target question (same as in the preliminary study). The

salesperson’s response to this target question varied between experimental conditions as follows:

� “Don’t know” condition: “Well, that seems like a pretty basic question but I just don't

know. I'll try to find out.”

� Obfuscatory response condition: “Many people contribute to IRAs, which have certain

tax advantages. Contributing to a 401k also has certain tax advantages. For example, you

don't have to pay income taxes on the amount you contribute to a 401k until you later

take it out during retirement. Moreover, your employer will match some part of your

contribution. And you get to decide how all of your money will be invested.”

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� Correct answer condition: “Yes. You may still contribute up to the maximum amount

allowable by law to a traditional IRA or Roth IRA.”

After reading the conversation excerpt, the study participants provided ratings on seven-

point Likert scale items that assessed the study’s dependent variables. First, they responded to

three items that measured consumer purchase intentions in the context of personal finance

investment decisions: “I would consider opening an account with this financial advisor,” “I

would be willing to use this financial advisor as my personal financial planner,” and “I would be

willing to invest money based on the advice of this financial planner.” The three items proved to

be highly correlated and thus were averaged to form an index measure of purchase intentions (α

= .89). Next, trust perceptions of the salesperson were measured with four items adapted from

the customer-salesperson relationship literature (e.g., Crosby, Evans, and Cowles 1990). This

measure also proved to be quite reliable (α = .82). The specific items were: “This financial

advisor is…(1) honest in his dealings with me, (2) someone I feel I can trust, (3) NOT always

upfront with me (reverse coded), and (4) never tries to mislead me.” After this, participants

responded to two items designed as manipulation checks. The first item assessed the success of

the salesperson motive manipulation with the question “Will this financial advisor make a sales

commission based on your investment decision?” The second item checked on the salesperson

response manipulation with the question “Did this financial advisor know the answers to ALL of

the questions that you asked?” Participants responded to both questions with the response

categories of “yes,” “no,” and “not sure.” Finally, participants completed items related to

demographic classification.

Results

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Manipulation Checks. Since both of the manipulation-check measures were categorical

variables, they were analyzed via logistic regressions with appropriate dummy-variable coding

for the independent variables. The first logistic regression confirmed that participants were more

likely to state that the salesperson would make a commission in the commission motive (vs. no

commission motive) condition (65% vs. 14%, respectively; B = 1.96, Wald (1) = 12.8, p < .001).

Also, neither the main effect of the salesperson response manipulation nor the interaction term

were significant in this logistic regression (p’s > .25; see table 1). The second logistic regression

showed that the likelihood of participants opining that the salesperson knew the answers to all of

the questions was significantly affected by the salesperson response manipulation. Specifically,

participants in the obfuscatory response condition were marginally more likely to indicate that

the salesperson knew all the answers relative to those in the “don't know” condition (21% vs.

5%, respectively; B = 1.53, Wald (1) = 3.08, p < .08). A separate chi-square test confirmed a

reliable difference between the aforementioned conditions (χ 2 (1) = 10.7, p < .001). Conversely,

when compared to their counterparts in the correct answer condition, participants in the

obfuscatory response condition were much less likely to state that the salesperson knew all the

answers (21% vs. 72%, respectively; B = - 2.53, Wald (1) = 17.98, p < .001). Further, neither the

main effect of salesperson motive nor the interaction between the two independent variables was

significant in this logistic regression (p’s > .4). These data indicate that as expected, the

obfuscatory response induced some uncertainty on whether or not all of the questions had been

answered.

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Main Results. A 2 x 3 ANOVA was conducted with purchase intentions as the dependent

measure and salesperson motive and response as the independent variables (see table 1 and

figure 1 for cell means). This ANOVA yielded a significant salesperson motive by response

interaction (F(2, 249) = 3.19, p < .05), as well as main effects for salesperson motive (F(1, 249)

= 4.12, p < .05) and salesperson response (F(2, 249) = 4.66, p < .01). To test hypotheses 1 and 2,

it is necessary to isolate specific comparisons between two of the three conditions of the

salesperson response treatment. Accordingly, we followed up on the overall 2-df interaction in

the ANOVA with appropriate 1-df contrast-contrast interaction tests.

Hypotheses 1a and 1b together predict that the effects of an obfuscatory response (vs.

“don’t know”) on purchase intentions will be moderated by salesperson motive. Accordingly, the

corresponding 1-df contrast-contrast interaction was significant (F(1, 249) = 6.67, p < .01).

Consistent with hypothesis 1a, when the prospect was aware that the salesperson has a

commission motive, obfuscation lowered purchase intentions relative to an admission of lack of

knowledge (M = 3.56 vs. 4.07, respectively; F(1, 249) = 5.17, p < .05). The pattern of results also

supported hypothesis 1b; when no commission motive was involved in the sale, an obfuscatory

response fared no worse than the “don’t know” in its effect on purchase intentions (M = 4.36 and

4.06, respectively; p > .2).

Hypotheses 2a and 2b together predict that the effects of an obfuscatory response (vs.

correct answer) on purchase intentions will depend on salesperson motive. In support, the

corresponding 1-df contrast-contrast interaction was marginally significant (F(1, 249) = 3.78, p <

.06). As predicted in hypothesis 2a, when the salesperson had a commission motive, obfuscation

hurt purchase intentions relative to providing the correct answer (M = 3.56 vs. 4.43, respectively;

F(1, 249) = 11.92, p < .01). In contrast, and consistent with hypothesis 2b, when the salesperson

18


did not have a commission motive, an obfuscatory response did not significantly affect purchase

intentions when compared to giving the correct answer (M = 4.36 and 4.52, respectively; p > .5).

Hypotheses 3a and 3b predict that when the salesperson is known to have a commission

motive, trust perceptions will mediate the effects obfuscation on purchase intentions. To test

these hypotheses, we employed the Baron and Kenny (1986) approach by conducting three

regressions for each hypothesis within the commission motive condition. Regarding hypothesis

3a, an obfuscatory response (vs. don’t know) proved to be a significant predictor of intentions to

invest (unstandardized B = -.51, t(96) = - 2.07, p < .05) as well as of trust perceptions (B = - .76,

t(96) = - 3.85, p < .01). In addition, when intention to invest was regressed simultaneously on

both salesperson response and trust perceptions, the regression coefficient for salesperson

response was no longer statistically significant (p > .20), whereas trust perceptions proved to be a

reliable predictor (B = .95; t(95) = 11.33, p < .01). Taken together, these results indicate that

given a commission motive, trust perceptions completely mediated the effect of an obfuscatory

response (vs. don’t know) on purchase intentions (Sobel z = 3.65, p < .001). Regarding

hypothesis 3b, the univariate regressions confirmed that an obfuscatory response (vs. correct

answer) had a significant negative relationship with purchase intentions (B = -.87, t(79) = - 3.10,

p < .01) and also with trust perceptions (B = -.96, t(79) = - 4.56, p < .01). Further, when intention

to invest was regressed simultaneously on both salesperson response and trust perceptions, the

coefficient for salesperson response was not significant (p > .8) whereas the coefficient for trust

perceptions was statistically significant (B = .97, t(78) = 9.19, p < .01). These results suggest that

as predicted in H3b, when the salesperson is known to have a commission motive, trust

perceptions completely mediated the effects of obfuscation (vs. correct answer) on purchase

intentions (Sobel z = 4.08, p < .001).

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Discussion

_____________________________

Insert table 1 and figure 1 about here

_____________________________

The findings confirm our theorizing that the effects of obfuscation depend upon what the

prospect knows about the salesperson’s motivation. When a salesperson stands to gain via a

commission on the sale, we hypothesized that the prospect would be more likely to react

negatively to an obfuscatory response. And indeed, given a commission motive, in our study an

obfuscating salesperson fared worse than a counterpart who provided the correct answer, and

also one who simply admitted to not knowing the answer. The results indicate that in such

situations obfuscation harms trust perceptions, which in turn leads to lower purchase intentions.

Interestingly, however, when it is clear to the prospect that a salesperson does not have an

extrinsic motive such as a sales commission, obfuscation (vs. a correct answer or a “don’t

know”) proves to be neither beneficial nor harmful. Our theorizing suggests that the difference

between the two motive conditions is on account of the activation of “dark side” persuasion

knowledge schemas by prospects when a sales commission is operative. When such schemas are

salient in the minds of prospects, dodgy answers by salespersons are interpreted negatively. An

internal analysis of the data for just the participants in the obfuscatory response condition

provides some additional support for this logic. Given a situation where a salesperson could earn

a commission from the sale and an obfuscatory response, there was positive relationship between

20


purchase intentions and whether or not a participant felt that the salesperson knew all the

answers (r = .27, p < .07). But in the absence of a commission motive, there was virtually no

association between these two particular variables among the participants who read an

obfuscatory response (r = - .01, p > .9).

FOLLOW-UP STUDY

The primary goal of this study was to shed more light on the process mechanism central

to our theorizing, and to do so by examining the thought processes of consumers who encounter

obfuscation from a salesperson. We earlier postulated that prospects activate “dark side”

schemas when they know a sales commission is at stake and consequently become more

mistrustful when they detect an obfuscatory response. In the previous study we saw evidence of

this mechanism in the form of the mediating role of trust perceptions. However, trust perceptions

were measured in that study with scale items only, and that too after the main dependent variable

of purchase intentions. It could be argued that the trust measure may have been prone to carry-

over effects (Bickart 1993), thereby leading to common method bias in the mediation analysis.

Therefore, in this study we used an open-ended thought-listing procedure to tap into consumers’

cognitive processes immediately after they had read the scenario regarding the interaction with

the salesperson. The prediction is that when a salesperson has a commission motive (vs. no

commission motive), an obfuscatory response will be more likely to engender mistrustful

thoughts regarding the salesperson, and that such negative thoughts will in turn have a

detrimental effect on consumer purchase intentions.

21


Method

Overview. The study consisted of a factorial experiment with a 2 (salesperson motive:

commission vs. no commission) x 2 (salesperson response to a target question: “don't know” vs.

obfuscatory response) design. The study was conducted on the Web, with all participants

randomly assigned to one of the four cells. Note that in order to lessen the cost of data collection,

in this study we dropped the correct answer condition that we had included mainly for

benchmarking purposes in the main study. The 134 study participants were recruited from a

national panel. Eighty-one percent were female, with an average age of 48 years (all over 21),

and 32% of them currently had a 401k plan.

Procedure and Measures. The procedure, scenario, and measures used in this study were

identical to those in the main study with the following exceptions. The financial data in the

scenario was updated for the current year (see appendix). In addition, to increase engagement

with the scenario we gave the salesperson a name (Bill Smith). A key difference in this study

was that we collected thought-listing data immediately after participants had read the

conversation between the salesperson and the prospective customer. Specifically, we elicited

participants’ thoughts with the following open-ended question: “Regarding this advisor and the

conversation you just had, what are you thinking right now? Please write down whatever you are

and have been thinking about the advisor and the conversation.” Each participant could list up to

five thoughts. Later, two coders blind to the experimental conditions and hypotheses coded in a

dichotomous manner whether or not a participant had produced at least one thought that

indicated distrust. Specifically, the coders were instructed to look for thoughts that indicated a

22


participant was skeptical or suspicious of the salesperson; the salesperson was dishonest, pushy,

or aggressive; and the salesperson deliberately avoided answering a question. Some verbatim

examples of the thoughts that were coded as mistrustful are as follows: (1) “I’m wondering if he

was telling the whole truth.” (2) “Is he just looking out for the company or for me?” (3) “Seemed

to be pushing the 401k.” (4) “I thought he avoided the question of whether I could still invest in

my IRA.” Agreement between the coders was 93%; differences were reconciled by discussion

between the coders.

After completing the thought listing question, participants completed the items related to

the measure of purchase intention (α = .96). This question was followed by the items for the two

manipulation checks and then the demographic classification measures.

Results

Manipulation Checks. The results of a logistic regression confirmed that participants in

the commission motive condition were more likely to state that the salesperson would make a

commission in the commission motive condition relative to the no commission motive condition

(66% vs. 10%, respectively; B = 2.82, Wald (1) = 16.2, p < .001); salesperson response had no

effect on perceptions of commission status (p > .7) and the interaction term was also not

significant (p > .9). Also as expected, the proportion of participants who felt that the salesperson

knew all of the answers to the prospective customer’s questions was higher in the obfuscatory

response condition when compared to the “don’t know” condition (34% vs. 18%, respectively; B

= .94, Wald (1) = 2.94, p < .09); this dependent variable was not affected by the manipulation of

salesperson motive (p > .4) and the interaction term was also not significant (p > .9).

23


Main Results. We first conducted a 2 (salesperson response) x 2 (salesperson motive)

ANOVA on purchase intentions in order to confirm that the findings replicated those of the main

study in regard to hypotheses 1a and 1b. In this analysis, the salesperson response by salesperson

motive interaction proved to be marginally significant (F(1, 130) = 3.63, p < .06). Follow-up

pair-wise comparisons of means confirmed the anticipated pattern of moderation (see table 2 for

cell means). When the prospect was aware that the salesperson had a commission motive,

intention to invest was lower if the salesperson gave an obfuscatory response rather than a “don’t

know” (M = 4.12 vs. 4.98, respectively; F(1, 130) = 4.20, p < .05). But in the condition where

the salesperson did not stand to gain via a sales commission, obfuscation proved to be about as

effective as an honest admission of lack of knowledge (M = 4.58 and 4.32, respectively; p > .5).

We then examined our data for evidence of the mediation process implied by hypothesis

3a. As before, we used the Baron and Kenny (1986) approach and conducted a series of three

regressions, all within the commission motive condition. The first regression confirmed that an

obfuscatory response (vs. “don’t know”) had a significant negative impact on intentions to invest

(B = - .87; t(63) = - 2.22, p < .05). Next, a logistic regression confirmed that participants were

more likely to have mistrustful thoughts when they encountered obfuscation rather than a “don’t

know” (B = .78; Wald (1) = 8.87, p < .01). Finally, when intention to invest was regressed on

both salesperson response and whether or not a participant had mistrustful thoughts, the

coefficient for salesperson response was no longer statistically significant (B = - .56; t(62) =

1.32, p > .15), but the coefficient for whether a participant had mistrustful thoughts was

marginally significant (B = -.82; t(62) = - 1.80, p < .08), suggesting that the latter variable at

least partially mediated the effects of obfuscation (Sobel z = 1.54, p < .12).

24


_____________________________

Insert table 2 about here

_____________________________

GENERAL DISCUSSION

Obfuscatory responses are likely to occur in a wide range of communication situations,

yet this topic has rarely been explored by academic scholars. The present research has focused on

the issue of obfuscation by salespersons when they do not know the right answer to a prospective

customer’s question. The work has drawn on prior theorizing and research on persuasion (e.g.,

Campbell and Kirmani 2000; Friestad and Wright 1994), attributional reasoning (e.g., Hilton et

al. 1993), and communication theory (e.g., Burgoon et al. 1996). Across three studies, we

investigated consumers’ expectations of obfuscatory responses by salespersons as well as the

effects of such responses during communications between salespersons and prospects. In all

three studies, we found considerable evidence for the moderating role of salesperson motives.

When prospects are cognizant that a salesperson stands to gain via a commission on the sale,

their expectations of an obfuscatory response are heightened. Further, when a salesperson works

on commission, obfuscation backfires: in such situations, on account of the activation of “dark

side” persuasion knowledge schemas, prospects interpret obfuscatory responses rather

negatively. They produce mistrustful thoughts and are less likely to buy the product. In a sales

commission context, salespersons do much better by being forthright and admitting to not

knowing the answer to a prospect’s question. Our theoretical conjecture is that the perceptions of

25


honesty gained from a simple “don’t know” help compensate for any damage done to the

perceived competence of the salesperson.

Interestingly, however, we also find that when a prospect is aware that a salesperson does

not work on commission, and consumers’ persuasion knowledge schemas have not been

activated, then the salesperson may be able to “get away” with obfuscating, in the sense that it

tends not to generate distrust on the part of the prospect. But reassuringly from a consumer

welfare perspective, in such a scenario there does not appear to be any particular advantage to

the salesperson in obfuscating relative to offering up a candid “don’t know.” Thus, when a

salesperson does not know the correct answer to a prospect’s question, beating around the bush,

notwithstanding its apparent pragmatic value, is probably never the best response in terms of

persuasiveness, and indeed, can backfire in terms of effectiveness.

Theoretical Implications

Our research adds to the body of knowledge which has explored contexts in which

consumers activate skeptical or suspicion-filled beliefs and expectancies regarding marketers and

salespersons (e.g., Campbell and Kirmani 2000; Fournier et al. 1998; Friestad and Wright 1994;

Grayson 2007; Moorman, Deshpande, and Zaltman 1993). Specifically, we are able to shed light

on the role of sales commissions in whether and when salesperson obfuscation is likely to

succeed or backfire. The present findings also highlight the crucial interplay between cognizance

of marketer motives, persuasion knowledge schemas, and trust perceptions in affecting

consumers’ purchase intentions. Upon receiving an obfuscatory answer from a salesperson, our

research participants generated mistrustful thoughts, but only when a skeptical or watchful state

26


of mind had been created beforehand by their cognizance of an ulterior motive for the

communicator.

More generally, the present findings also contribute to our understanding of how the

social context of communication influences the interpretation of a message and the impression

formed of the message source (Wyer and Gruenfeld 1994; Wyer et al. 1994). Wyer et al. (1994)

suggest that when information is acquired in a social context, people pay attention to both the

literal meaning of the information as well as its pragmatic implications. In particular, messages

that violate normative expectations may lead the message recipient to question the source’s

motives and to process the information differently. In our studies, it appears that when

participants in the no-commission condition encountered an obfuscatory answer, they processed

it without drawing overly negative inferences about the communicator. In fact, in this condition

the impact of this response on the prospect’s purchase intentions was about equivalent to that of

providing a correct answer. In contrast, when the salesperson had a commission motive, an

obfuscatory answer appears to have been interpreted as a serious violation of communication

norms of informativeness and truthfulness (Grice 1989).

Normative Implications

Prior research has shown that extrinsic monetary incentives can undermine prosocial

behavior in general (Ariely, Bracha and Meier, 2009) and, more specifically, that unethical

behavior is more likely among salespersons who work on commission (Honeycutt et al. 2001;

Kalra et al. 2003). Our research suggests that consumers seem to be aware of this phenomenon,

and adjust their expectations and thinking patterns accordingly. Our results also suggest that

27


salespersons that are known to work on a pure commission basis should be particularly careful to

avoid any obfuscation in their communications with prospective customers; otherwise, they are

likely to play into the negative stereotypes held by consumers. In that sense, some salespersons

may be at a disadvantage simply due to the nature of their firm's compensation structure. They

may have a more difficult time earning their clients’ trust since even a slightly less-than-

forthright communication could be easily misinterpreted. Overcoming salesperson stereotypes

may involve utilizing alternative compensation structures that are then made explicit to

prospective customers (DeCarlo 2005).

The present work also reinforces and adds to prior research that has identified trust and

transparency in communications as cornerstones of a lasting relationship between consumers and

salespersons or firms (Fang et al. 2008; Fournier et al. 1998; Grayson 2007;

Knowledge@Wharton 2007; Moorman et al. 1993; Morgan and Hunt 1994). Specifically, we

find that a combination of a salesperson commission motive and obfuscation seriously

undermines consumer trust, which in turn has a detrimental effect on purchase intentions. The

bottom line appears to be that when faced with a choice, salespersons might do better to come

across as dumb but honest rather than as clever but devious, not only from an ethical point of

view, but from a very pragmatic one as well.

Limitations and Future Research

There are several limitations of our findings that would be interesting to pursue in future

research. First, our empirical work was confined to a particular form of obfuscation and a

conversation scenario set in a specific financial services context. Future research may be able to

28


confirm whether the present findings generalize to other forms of obfuscation and a diverse

range of interactions between salespersons and prospects. Second, our theorizing and study

operationalization were predicated on the assumption that obfuscatory responses are likely to be

perceived for what they are. But it may be the case that just as in other domains where

consumers have been shown to exhibit varied amounts of attention and perceptual vigilance to

marketing stimuli (Ratneshwar et al. 1997), all individuals may not be equally adept at detecting

obfuscation. Third, the conversation in our studies occurred in a setting where the salesperson

did not have a prior relationship or history of interaction with the consumer. It is possible that

preexisting characteristics of the relationship (e.g., Aaker, Fournier, and Brasel 2004) may well

determine how consumers respond to obfuscatory responses received from a salesperson, and

this also might be an interesting direction for future research. In the same vein, obfuscation

might produce different effects when the prospect perceives the interaction context as a one-time

sales transaction rather than as a relationship-building overture. Fourth, our research did not

explore the range of possible motives for obfuscation, and this is also a topic left for future

research.

Finally, it is noteworthy that our studies did not involve any face-to-face interactions, so

we are not able to account for the possible impact of nonverbal cues, such as the physical

attractiveness of the salesperson, in regard to the effects of obfuscatory communications.

Ahearne, Gruen, and Jarvis (1999) have found that salesperson attractiveness is positively related

to performance (particularly in the short run), and their data also indicate that the effects of

attractiveness on performance are partially mediated by perceptions of trustworthiness. This

finding suggests that a salesperson’s appearance or looks may independently influence the

manner in which consumers respond to obfuscatory answers; it remains for future research to

29


ascertain whether attractive salespersons, even when working for a commission, are more likely

to get away with obfuscation.

In conclusion, we note that the topic of obfuscation in marketing and other forms of

persuasive communications is worthy of much more investigation. The present findings indicate

that whether obfuscation by a salesperson is construed negatively or not is in the eye of the

beholder. Understanding the types of motives and situational variables that influence how

consumers respond to an obfuscatory response—or possibly turn a blind eye to it—could be a

fertile area for scholarly research. If the future of marketing is essentially all about having good

conversations with customers (Blattberg and Deighton 1996), the role of obfuscation cannot be

ignored.

30


Appendix

Conversation Between an Employee and a Financial Advisor

Hello. I just started a job here with company [X] and they have offered me the opportunity to invest

in a 401k. I'm not sure whether I should do this. Could you tell me exactly what a 401k plan is?

Sure. A 401k is what's known as a "defined contribution plan." What this means is that the plan

determines the monetary contributions that you and your employer can make to a retirement plan. The

benefit or payout at retirement depends on how well your investments in the plan do over time. This is one

way that 401k's differ from traditional pension plans.

So, if I decide to invest in a 401k plan, how does it work?

If you decided to participate in your employer's 401k plan, your 401k contributions would be invested at

your direction, for example, into various mutual funds provided by the plan. You would decide how much

money to invest and where to invest it, subject to the plan's provisions.

Why would I want to open up a 401k rather than investing in some other kind of savings plan?

A key benefit of 401k plans is that employers often match at least part of employees' contributions. For

example, your employer may contribute 50 cents to your plan for every dollar you contribute, up to a

limit.

Do I have to pay taxes on what I would contribute to a 401k plan?

No. Another major advantage of 401k plans is that they allow employees to make pre-tax contributions.

In other words, your contributions are automatically deducted from your paycheck each pay period,

before your paycheck is taxed. You don't have to pay taxes on the amount you put away.

So, would I ever have to pay taxes on the money in a 401k plan?

Taxes on the money you put into a 401k are put off or deferred until you take the money out during

retirement.

What about if I take the money out before I retire?

If you take money out of the 401k before the age of 59 1/2, you would have to pay income taxes on the

amount you take out and you would have to pay a 10% penalty as well.

If I decided to invest in a 401k I guess I'd have to decide how much money to put into it. What is the

maximum I could contribute?

In 2003 (2007), you can contribute up to $12,000 ($15,500) of your salary. This limit increases each

year. So in future years you could contribute more.

What if I wanted to put even more money into a 401k, could I?

31


Well, if you are age 50 or over you can make additional "catch-up" contributions of $2,000 this year, for

a total contribution limit of $14,000. These catch-up amounts will also increase each year for the next

several years.

Do these dollar limits apply to what my employer contributes to my plan?

No. These limits do not include the amount that your employer chooses to contribute to your plan. These

are the amounts that you yourself can contribute from your paycheck. So the total amount contributed by

both you and your employer will usually be more than what you alone contribute.

Until now, I have been contributing money into an IRA every year. If I contribute to the 401k plan

offered by my employer, could I still contribute to my IRA?

>

>

Well, I guess I'm a little concerned about tying up my money in a 401k. What if I were to buy a

home soon? Could I use the money I've invested in a 401k to put a down payment on a house?

In some cases, 401k plans provide loans. Funds obtained from a loan are not subject to income tax or the

10% early withdrawal penalty. Whether or not you can take out a loan against your 401k is determined

by your employer's rules.

If I did take out a loan, how quickly would I need to pay it back?

You would need to pay the loan back over five years, although this can be extended for a first-time home

purchase.

What if I decide I want to retire before age 59 1/2? Isn't there any way to avoid the 10% early

distribution penalty on retirement payments from my 401k?

Well, there are some exceptions. For example, if you are retiring from the company that is sponsoring

your plan and you are at least 55 at retirement, you can begin to withdraw monthly income from your

401k with no penalty.

What if in the future I wanted to move my 401k from this employer into a 401k plan with a

different employer? Would I be allowed to do this without paying any penalties?

First, you would need to check with your new employer to ensure that their plan accepts rollovers. If they

do, ask them for instructions on where assets from your old 401k should be sent. Then contact your

former employer and ask for the necessary form(s) to complete a rollover into your new employers plan.

You would incur no penalties when rolling assets from one plan to another.

Can you tell me more about your firm's mutual funds?

Sure, let me tell you about what we have to offer....

32


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Table 1

Main Study: Results as a Function of Salesperson’s Motive and Response

Percent of

participants who

said the salesperson

will make a

commission

Percent of

participants who

said the salesperson

knew all the

answers

Intention to invest

Trust perceptions

Don’t

know

71

6

4.07 a

4.42

Commission motive

Obfuscatory

response

63

24

3.56 ab

3.66

Correct

answer

38

60

72

4.43 b

4.61

Don’t

know

14

4

4.06 c

4.80

Intention to invest and trust perceptions have a scale range of 1-7.

No commission motive

Obfuscatory

response

NOTE.— Cell means for intention to invest that share the same superscript are significantly

different at p < .05.

19

16

4.36

4.34

Correct

answer

10

71

4.52 c

4.91


Table 2

Follow-Up Study: Results as a Function of Salesperson’s Motive and Response

Percent of participants who said

the salesperson will make a

commission

Percent of participants who said

the salesperson knew all the

answers

Intention to invest

Percent of participants who

produced mistrustful thoughts

Don’t

know

69

16

4.98 a

13

Intention to invest has a scale range of 1-7.

Commission motive

39

Obfuscatory

response

64

30

4.12 a

No commission motive

Don’t

know

11

19

4.32

Obfuscatory

response

NOTE.— Cell means for intention to invest that share the same superscript are significantly

different at p < .05.

52

17

9

38

4.58

35


Figure 1

Main Study: Intention to Invest as a Function of Salesperson’s Motive and Response

40

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