Churchill: “Madam, would you sleep with me for five million pounds?” Socialite: “My goodness, Mr. Churchill… Well, I suppose… we would have to discuss terms, of course… ”
Churchill: “Would you sleep with me for five pounds?”
Socialite: “Mr. Churchill, what kind of woman do you think I am?!” Churchill: “Madam, we’ve already established that. Now we are haggling about the price.
Haggling, plain and simple, isn’t cool. When you focus on price as either the buyer or seller, you set up a situation where the only thing you have to talk about is the price. Conversation IS the relationship after all, and if price is the only thing that you think matters, then you are sending a clear message that nothing else matters about the relationship other than getting the price you want for the product or service.
And that’s the point. Haggling is designed purely to complete a transaction- not to build a relationship. When we build relationships as buyers and sellers we invest into the future of where that relationship might take us. And by doing so, we are increasing the value of what stands between us and the trading post. And simultaneously, we are also increasing the ambiguity of where that relationship might take us- which, if you are a new business owner, can be nerve racking and seem hard to manage and control.
There is a philosophy in business that focuses on a simple principle called cradle to grave. If you can sell to a customer from the beginning of their life to the end of their life you have maximized the relationship and investment you made. Since 80% of your business will come from 20% of your customers, this can be a great value system to embrace when building your business. And if you believe in this principle as a strategy, it means you are investing into the customers you do have which means that you might need to create new products or services to keep them coming back. And to do that you need to know more, not less, about your customer.
When I was building my very first music shop, I created a system of capturing chronological background data on my customers. I made it a point to chat with them before taking their orders and learning about their lives, families and where their priorities were and what they valued. I then taught my employees how to do the same and we created a data bank with this information that was stored in each customer file. This way, when a customer called in and spoke to anyone on my staff, we were able to ask them about last years family vacation, or how their son’s concert at school went. I found that the more we knew about our customers and were able to converse with them about what mattered to them, the more they called and referred business to us. And the less anyone asked us about price. In fact, while our prices were level and were an excellent value- the sweet spot when you combine service, quality and price- we all knew in the shop that if a customer did continue to haggle or was profoundly price sensitive they simple were not our customer. And interestingly, a vast majority of even those who did continue to haggle, as they experienced our commitment to service, quality and a fair price, became fans and loyal customers. Not every customer will, but many can be trained to understand that your worth is more than to haggle about price.
So, what do you know about your customers? What do you know about their lifestyle, their family, their interests, what they struggle with? What can you do today to not only show your appreciation to those who value and support the product or service you provide, but more importantly, to get to know as many of them as possible on a deeper level.
Your job as a business owner is to ask for the kinds of customers you want by demonstrating the kind of behavior, attitude, and level of service you want them to appreciate. Customers are trainable. These days, it’s just far too often they have been lied to, experienced really poor service or been taken advantage of. And so, with good reason, they have learned to simple haggle on price as the only way to communicate with you.
So, the next time someone begins the conversation asking you about price, ignore their question and ask them how they found you or something about them. You would be amazed at how quickly this will change the nature of the relationship you have with them.
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