I recently had the pleasure of working with a new customer. I provided an estimate with reduced pricing and showed each discount because he is also a business owner in the same industry. We call this a “jobber” rate.
The assumption is that you will get multiple jobs from this person since they will need additional services regularly that they in turn re-sell.
It was a really good price estimate.
He accepted the price and we proceeded with the work. During the time we had the vehicle here, we found an additional problem. I let the customer know and provided and estimate. The estimate included discounts as before. It wasn’t one of those things that needed to be addressed immediately so it was more of an FYI.
Well, he waited days to respond. When he did respond it was to ask for more discounts.
I was not impressed.
Let’s look at the numbers.
List price: $878
My price: $674
Total discounts: $204
Total discounts given $204. Pretty good I thought. And yet he requested an additional $174 off.
What would you have done?
Well, my partners and I agreed that he was new, getting a substantial discount without promise of using us again as a vendor… so no more discounts.
I told the customer that I could save him additional money by using a used part instead of new. I also explained that a new part from the manufacturer of the vehicle was all that was available, thus higher pricing.
He said to do the work BUT pointed out that his research online showed a different list price for the part. Oh the Internet can be evil… but my pricing was a dealership list price.
I didn’t argue the point, in fact I didn’t respond. This whole thing had become a high maintenance issue.
I did extend an additional $40 discount and yet, when he arrived to pick up his vehicle he asked for yet another discount.
I smiled, politely said, “sorry”, and took his credit card.
Here’s the thing… he just screwed up a good thing.
He won’t get better pricing elsewhere which is why he ended up with us in the first place. And, he may not realize this, but we might not work with him again… unless we are desperate.
And, even if we are desperate… there’s no way the pricing will ever be as good.
The point is this… you can be THAT customer, the customer who is always right, but realize that most business owners won’t be bullied.
We still have expenses to pay before we get our share of that invoice and if our profit is too low, we’ll just pass next time or raise the price – some business owners cease to actually care about the work they are doing.
Asking for discount upon discount really does show a lack of respect for the service provider. But, beyond that, it shows a kind of disrespect for self.
So what can we do to be ready when these kinds of things happen?
1. Be Prepared. As much as possible, be prepared because it is inevitable. In over 20 years of operating businesses, I am still surprised regularly. You can’t always know what is going to happen next but you can review the surprises you’ve already had and use them as a guide. Play them back and figure out how you can handle similar situations in the future, then practice because in the heat of the moment it can be hard to remember your plan.
2. Hang on. Give yourself time to respond. Don’t jump right in and react. Hang on for at least 30 minutes before you respond. Even if the person is standing right in front of you, you can always say, “I need to look into that and get back to you.” Then, step back, assess, and prepare your response.
3. It’s not about you. Really it isn’t so don’t take it personally. Generally when a customer becomes a bully, it is more about them. Whatever their motivations, they generally have nothing to do with you. So, don’t get emotionally upside-down, you’ll just be wasting a lot of energy.
Two lessons here.
The first, don’t beat anyone up on pricing. It isn’t worth it. If you don’t like the price, go elsewhere, don’t bully your way to a better price.
The second, don’t be bullied. Stand by your pricing. I have found countless times, like in this situation, the customer does want the work and will ultimately okay the work even without the extra discount. The challenge is whether or not they keep asking for discounts, as in this case. It’s rare. In fact, it might be a first for me and yet… it happens.
If it happens to you stay calm, cool, and collected. You don’t have to say “no”, instead be creative. I offered to find a used part… I knew for this vehicle he wouldn’t go for it, but rather than offer another discount, I instead offered a cheaper solution with no guarantee. I said “no” without ever having to say “no”.
Whatever you do, don’t defend your pricing. Just work around it and put the ball in the other person’s court.
“You teach customers how to treat you.” From the Balance Manifesto, get your copy here.