The Retail Observer is an industry leading magazine for INDEPENDENT RETAILERS in Major Appliances, Consumer Electronics and Home Furnishings
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RETAILOBSERVER.COM SEPTEMBER 2023 48 O ne of the hot topics at a recent BrandSource member meeting was how to handle customers who insist on haggling. While there were many suggestions, it is ultimately up to each business to decide how to work with the customer who would like to work you over for a lower quote, no matter how aggressive your pricing already is. Whether you should negotiate will depend on several factors, including who the client is, the reason they're asking for the discount, your minimum selling price, and how much of a discount they're asking for. Should you choose to engage, there are tactics your sales team can use to respond to these price-parleys and still make the sale within your prescribed margin. Negotiating price with customers is one of the most basic sales techniques, but selling to the deal-seeking customer needs careful navigation to close the deal successfully. The first principle of price negotiation is that you never want to devalue your product or service. Too often when you agree to a discount, it's like subtly saying that your product was overpriced in the first place. So – affirm the value of the product. Second, offering discounts to select shoppers can stir up a hornet's nest, should your customers compare price quotes. With those factors in mind, here are five tips to help you handle requests for discounts: 1. Understand the reason behind the price request. A good way to respond to prospects who ask for discounts is simply to ask, "Why?" For some customers, haggling may just be an ingrained habit. By saying, "No, this is our best price," odds are they will still be interested in purchasing. 2. Communicate the value of your product. It's your job to convince your customers of the unique benefits and value of whatever you're selling. Reiterate the benefits of the product and the problems it solves. 3. Ask for something in return. In exchange for a discount on the unit, you might ask them to purchase a warranty or an accessories bundle. 4. Give a reason for saying no. If you have to say no to a prospect, make sure you give them a valid reason for the refusal – for example, because the price accurately reflects the value of the product, or because you are competitively priced with other stores. Remind them that as an independent dealer, you will stand behind what you sell. 5. Sweeten the deal. There are times when you simply can't move on your price. In those instances, you may want to offer a spiff to help close the deal. Several members at the Greater Midwest meeting suggested throwing in a major component warranty valued at $99 (purchased in bulk for around $5). Another suggestion was to offer hoses, cords, or other low-cost items. BONUS TIP: HUMOR BrandSource member Dan Lammers, owner of King Appliance & Furniture in Kirksville, Mo., has a unique way of justifying his price and closing the deal, while having some fun with customers who ask for his "low dollar." He shows them an actual dollar bill that's embedded in a floor tile by the sales counter. "I say, 'Here it is,' and point to it. They always laugh, and then I explain that we are always as competitive as we can be." LOOKING FOR YOUR BOTTOM DOLLAR How to handle customers who want to haggle Andy Kriege Customer Service Trends Andy Kriege is General Manager of Communications at AVB BrandSource, the nation's largest merchandising and marketing co-op for independent appliance, mattress, furniture, and CE dealers. RO