Handling The Haggler

(Image from Monty Python's "The Life of Brian")

By Graeme Mc Pherson

Every retailers favourite customer is the haggler, isn't it?! ;)

With the internet making it so easy now for people to compare pricing between competitors, one of the most common things for small businesses to deal with on a day to day basis is the haggler.

And with competition for sales so stiff, it can be tempting to fall into the net of the haggler.

There are many schools of thought on how to handle hagglers. In the end, I believe the answer comes down to doing what you are comfortable with. I do suggest setting some self imposed ground rules though, and sticking by them. Those ground rules should revolve around who your target customer is - who you're most aiming to sell to, and the impact those customers have on your business model.

Many's the time I have stood next to a customer thinking to myself "Am I really going to let this sale go for the sake of $10 or $20 here?". If the customer is obnoxious or ignorant, then yes, I let them go and inflict themselves upon a competitor. Other times, if it means sealing the deal and spending the next 5 minutes working on something important instead of haggling, then I'll do the deal. 

The one type of haggler who amazes me is the one who will literally drive all the way around Sydney to get everything they want at the cheapest price. I've come across people who've spent $50 on petrol buying $300 worth of products. My advice here is to never haggle with these customers. They have no loyalty to anyone except the cheapest price. Let them waste your competitors time and margins!

Are there scenarios where haggling is ok? Well, any business owner hates to give away money of course, but there are times when allowing a customer to haggle a bit is a good way to generate some goodwill or finally get your foot in the door with a client you've been working on for a while.

If someone has bought a good sized order from you, then look at ways you can give them a package deal. And be creative about it too - if there's a product or 2 in that deal that has a low cost and high margin, then throw them in as freebies. Sometimes a gesture like this gives away less margin than an actual "X percent off discount", yet still leaves your customer feeling good about the deal.

If you're trying to help out a client who has credit with you, then offer them a discount if they pay up front instead of the 30 days they usually pay in.

The most dangerous downside to haggling is setting precedents - once a customer knows they can get you over a barrel, you will then spend every transaction in a haggling match. 

And don't be too scared of losing a bad sale to a competitor - there are businesses out there selling at ludicrously thin margins trying to get sales. Let them. Their money is working way harder than yours for less reward, and unless they are an amazingly lean and efficient business, they will not be able to sustain that kind of business model. The worst thing you can ever do is roll out the welcome mat for customers whose only loyalty is to the cheapest price.

Lastly, the best protection against the haggler is to work on your product range. Find exclusive product where price comparisons are not an option. Here at Rax & Dollies, we work hard on making sure our mannequin and retail shop supplies range stands out from the rest of the pack. When you're starting from this place, you're dealing with a better level of clientele who value service, style and product quality over price. You're probably still going to end up haggling at some point with these clients, but I guarantee you're going to feel better about it and you know the haggling is going to be on your terms. By all means, reward good customers with a good deal, just make sure its win - win for both you and your customer!

Happy haggling!