How can independent retailers handle hagglers in their store?

While the vast majority of your customers will accept the price displayed for your stock or walk away, it's quite possible you are occasionally faced with a haggler, looking to get a discount or a better deal than you have advertised.  It's an interesting topic to discuss with retailers, and many perceive that consumers are only trying their luck because they're stood in an independent store and that they wouldn't ask in a chain store retail outlet.

 

But where exactly is it considered acceptable to haggle? If you have a scale where at one end haggling is almost expected, like on a used car forecourt for example, and at the other end were situations where haggling wouldn't normally be acceptable, like purchasing tinned foods in a supermarket, where exactly would your store and your product offering fit on this scale? And how do you react when you are asked for a discount?  Ask your team how they would react if they were asked for a deal and you weren't around to offer support.

 

Surprisingly, there are people out there who regularly ask for discount on purchases and research shows that they're often very successful.  This 'Moneysavingexpert' article by Martin Lewis encourages consumers to haggle in everyday retail situations, not just exclusively in independent stores but also in large chain stores, and even mentions someone who worked for a large chain store and was trained to automatically give 10% discount to anyone who asked.

 

It's easier now than ever to search online and find the cheapest price for a product, and retailers are now more at risk than ever of 'showrooming', where customers take your advice and perhaps sample the product in your store, and then leave to purchase the product at a discount online.  It's difficult for brands to control the pricing of their products online but it's worth regularly checking what's happening online and particularly on the website of the brand owners, and if they're offering discounts direct to consumers consider speaking with them and asking for their support in enabling you to match these offers.

 

What's your best price on this?

The Martin Lewis article suggests that independents are a great place to haggle, but then encourages the reader to support that independent by becoming a regular customer.  The most successful haggler will use charm and ask for your help, and try to speak with you out of earshot of other customers.  This is important as you are more likely to engage in negotiation if you don't have an audience who are then likely to do the same.

 

How to react

It's easy to give an immediate reaction when faced with a request for discount.  It can be seen as incredibly cheeky or even a comment on your pricing structure, suggesting you are overpricing goods.  Regardless of whether haggling is something you'd personally do, try to remain calm and objective.  If a customer is the type to ask for a discount then they are quite likely to also be the type who would look further than your store to get the best price.  Is it better to continue with the deal with a reduced margin, and hope to convert them into a long term customer, or lose the customer to the internet.

 

Negotiate.  Or don't.  It's up to you.

Many people will still continue with their purchase even if they are refused a discount, as long as the refusal is polite.  You are not obliged to justify your pricing however any surplus over online pricing or other retailers can often be explained with the many factors involved, including economies of scale, the overheads of your specific environment, the pre-sale product support and after-sales service that can't be matched online.

If you are going to negotiate you need to be aware of your costs.  Don't be afraid to ask for a moment to go and check on pricing and see if there is any movement or flexibility.  Often simply by going away for 30 seconds to look up costs can work incredibly well in your favour and even if you are unable to offer a discount, the fact that you were willing to try shows goodwill on your part.

 

It's a two-way street

A request for discount is one of the strongest buying signals a customer can give.  You now know the customer wants the product and the close is in sight. If you are being asked to give something away, it's perfectly acceptable for you to turn the tables around and ask for something in return.  Depending on your business model and the type of products you offer this will obviously vary but use your imagination.  Consider suggesting that you are able to offer a discount if more than one are purchased, or if an add-on product is purchased at the same time.  This works well for stock which requires supplies.  If you sold printers, for example, you could offer a discount if the customer agrees to purchase ink at the same time.  Or you could direct the negotiation away from a financial discount and offer something as a free gift.  If your customer is aiming for a 10% discount and you have an item that you're finding it difficult to shift, consider offering it as an alternative.  Offering a product will make your offer appear more generous than it is - the customer perceives the value of that item to be its marked retail price rather than the cost price you paid and are considering in the deal.

Factor in other overheads at play and consider if you can keep these at an absolute minimum for the transaction to enable negotiation on price.  Overview your costs on payment handling - are you charged by the bank to deposit cash? what are the rates on debit and credit card transactions? it's reasonable to put certain terms in place if that will enable you offer a lower price to the customer.

 

Close the sale

You've established your position and your customer will be making a decision about whether to accept the offer.  Don't be afraid of the silence while they mull it over.  It can be tempting to jump in and give away more than you'd originally planned but stand firm and wait for their response.  And even if they reject your terms they might just need a bit more time, try not to be annoyed by their response, as you might find they return to buy from you very soon.  Regardless of how much cheaper the product is available online, they have the opportunity to purchase it from you immediately and have it in their hands right away, and often that's just what they need.

 

It's your turn - haggle with your suppliers

Work with your suppliers to make sure you're getting the best deal possible.  Keep an eye on prices online and if others are selling the same goods at close to your cost price or less, ask how that's possible.

 

Marketing for Independent Retailers

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