Is That the Best You Can Do?
When closing a deal or finalizing a sale turns into a negotiation, small-business owners often end up on the losing side--particularly during a recession. Fortunately, there are several strategies small-business owners can adopt to help improve their knack for haggling.
According to business ethics expert and Elegant Solutions Consulting CEO Lauren Bloom, the simplest involves setting parameters in advance.
"Know exactly how far you can go to walk away feeling you got a reasonable deal," she says. "In fact, you can approach it as an opportunity to develop and package a new product."
It's also important to be firm about those limits--a policy that has worked for Amy Burke, owner of San Francisco-based floral design company Amy Burke Designs. Despite a boost in haggling customers, Burke maintains a strict margin for each job. Some customers "order the moon and the stars," she says, but push back significantly when they see what it costs to pull it off. "We genuinely try to give prospective clients the best deal we can," Burke says. "But when clients just flat-out lower the budget, something has to give."
She recalls a situation with a bride who wanted Burke to match a price that was $1,000 less than Burke's original quote. "We could not and would not match the price," she says. "All we could do was warn her to be careful of the quality and reliability of the new florist."
Keeping a clear head also helps, Bloom says. "Hagglers are annoying, particularly if you feel they're suggesting the goods and services you're providing aren't worth what you're charging," she says. But staying calm allows you to think twice before taking on a job you'll probably regret later. "If someone is trying to take advantage of you, it's perfectly all right to say, 'This is not a customer I want.'"
Jeff Burney, co-founder of BURNadvertising, based in Kansas City, Mo., believes in haggling, but also knows it needs to happen with mutual respect.
"All too often, potential clients are just looking for a price match," he says. "Then you're better off without their business because there's no loyalty, no relationship."
Protecting reputation is also critical. "Never cut your fees to the point that you feel you're not being paid what you're worth," Bloom says. "Then you're going to start resenting the assignment, and maybe start cutting corners."
So what's the safest way to convince a hard-nosed haggler? "Show people you offer the best value, and separate this value from price," Burney says. "There will always be other businesses willing to undercut you--but it goes back to the saying, 'You can have it cheap, fast or good: pick two.'"