A few weeks ago, I recommended a plumbing service to a friend, and he asked me if it was expensive. I told him these plumbers fixed my sink appropriately and that I selected them because of good public reviews.
Since we’ve already had this discussion before (the evergreen topic of how I don’t select products and services for their price tag), he asked me if I ever try to bargain with merchants. I replied that I never try to negotiate prices or ask for discounts. At first, I realised I operated like this many years ago, but I had to search my feelings about why that is. These are my findings.
We live in a free-market environment where you can select many suppliers for almost anything. The exception is only valid for some specialised goods, such as specific parts for old cars, specialised equipment for science, among other exceptions to the rule. I get it. Other than this exception, there are at least five stores for whatever you want. It’s the same as the saying “Everything is on the Internet” (sadly not, some stuff became unavailable).
I never ask for discounts; it’s against my values. My friend barked at me: “What I mean is that you do not ever bargain.” Exactly. The way I do business is that I always look for win-win deals. Every sale and every customer-merchant transaction is a business deal. My central question is: How can we make a deal where we both win?
In what world does asking for a discount the business owner wins with me if I keep engaging in this behaviour? Let’s say you go to a barber shop you trust. You call them, book them, and get your hair and beard appropriately groomed. Building a partnership with your service providers implies allowing them to have their well-deserved piece of the cake, and with your open shameful hands, you ask for a discount. It corrupts your mind, embarrasses you, and makes you feel guilty.
Never asking for discounts doesn’t mean I always purchase everything I see. If something is priced unreasonably, I don’t buy it. Suppose something is outside of the boundaries of fairness by being overpriced. In that case, that is a win-lose situation with the losing end on my side, which misses the point of building a business relationship that we both can develop for years to come. If that’s how we are starting, I might as well not start it at all.
I may take a discount offer if offered to me twice or proceed with a purchase of a digital good if it already has a coupon applied; I’m not dumb.
For the most part, asking for a discount transmits a message of financial weakness and asks the merchant to reduce their profitability, which already comes with resentment on their part. Imagine asking someone to minimise their profitability in their face. “Hey, why don’t you minimise your profits and give me a discount?” That’s exactly what you’re doing when asking for a discount and when you ask for a pay raise.
It’s under these circumstances that the way you manage deals transmits a message to your counterpart. You must be aware that not every communication is with words; it’s also actions, how a situation is set up and how you can worsen or improve it. It speaks louder than your own words.
Asking for Discounts Poisons the Business Relationship
Let’s retake the barber shop example. If you ask for discounts regularly and leverage the current trust, the ad-hoc friendship, the barber shop owner accepts the discounts every time.
In the short term: You win, and he loses. You saved yourself some bucks. In the long term: The relationship is tarnished. He doesn’t like to take you as a customer. He might start taking shortcuts when grooming your hair. This is a loss-loss situation for both of you.
Let’s also say there’s a recession in the grand scheme. More people have started asking for discounts. The barber shop business operation is now deemed unprofitable, and the owner has decided to close the shop forever. That’s a service provider less in the market because of the compounded network effects of asking for discounts. Everyone loses. You must find another barber shop that grooms your hair the way you like (with the increased cost of starting over every time).
I’ve also never agreed to friendly discounts. When you have a friend bootstrapping a business, you want them to succeed. They cannot grow if you ask for a bargain; it shorts them on cash, cash needed for business growth. Your friend needs the opportunity to operate their business at the maximum capacity, and they need the payment in full.
The only way I accept friendly discounts that way, it’s if they back it up with an apparent business reason, e.g., “It’s a customer acquisition tactic part of a larger strategy of user base growth, in detriment of less cash in the short term” (they’ve gone through the job giving some thinking to this, though I’d agree to disagree that leaving cash on the table is not something I’d do). “You’re my friend” is not a good reason for giving me a discount, allow me to pay the listed price, please.
You also want them eager to sell you products or services when you need them. You don’t get preferential treatment if you constantly pay discounted prices. People say you shouldn’t do business with family and friends, and you can. Just don’t be cheap on them. Whether you’re my friend, I’ll pay you the listed price.
Asking for Discounts Is the Symptom of a Larger Disease
Your finances should always be in good standing. If you find yourself short on net worth, it’s a clear sign of mismanagement (lack of vision, ignorance, gluttony, etc.). A mindset ill on dirt drags you down to poverty. If you or your business is short on cash, that’s the problem. That needs to be fixed right away. Cannot afford something? Please do not buy it. Fix the root cause instead, which is the cash drain someplace else, a financial hole you must cover as soon as possible. “Waste” and “investments” are not the same; confuse them at your peril. Ask yourself if this expense serves any purpose, and be honest.
The exception to the disease is when you ask for a discount strategically because you want to discourage a merchant from doing business with you. You ask for a steep discount which makes them wrinkle their face. That is a valid tactic, but it would have been better if you were honest upfront (and didn’t explain it). It saves both of you precious time.
Another exception is when you pay the discounted/missing value via other means (excellent reviews/lead generation, welcomed advice that applies to the reality of the receiver, etc.). You can deliver value in any shape or form, not just money. This depends on whatever each party agreed, and you must evaluate if the relationship remains win-win. The business relationship must be improved or terminated if either party are being scammed out of it. It lowers your human quality if you stay on the winning end of a win-lose deal and downgrades your standards.
I hope I taught you today the way to be. Take care of your mind. It takes care of your wallet.
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