Tips & Talk 92 – How to Negotiate with Customers

Hi there.

It's Sue and thanks for joining me for Tips and Talk

Day. These are bite sized topics that I pull from community

questions and things that I'm observing in the world of handmade

small business.

If you'd like to submit a topic DME over on Instagram

at Gift Biz Unwrapped.

Before we get started,

I'm gonna share a secret with you.

One of my superpowers is the ability to get an enormous

number of tasks and projects done each and every week.

I easily meet deadlines,

rarely forget to do something.

I know at the start of each day what needs priority,

attention and action type A personality.

Yes, and a follow through on the Kobe assessment,

which should have given me the clue,

but it wasn't until people started commenting to me that I

realized not everyone naturally knows how to do this.

It's the biggest single contributor to the growth I always see

in my businesses without spending hours and hours working either.

It's about focus and doing the right things efficiently.

Prompted by all the questions on how I do this,

I went about finding a way to help you perform at

a higher level too.

I analyzed my methods and formalized my process,

which is one many of my coaching clients now also follow.

You can use it too.

It's all part of a tool called the Inspired Daily Planner,

made specifically for gifters,

bakers, crafters,

and makers.

Make no mistake,

this is not your ordinary planner.

First off,

it comes with a video explaining my productivity strategy and the

physical planner isn't dated,

so you can start using it the second it arrives at

your doorstep,

and that's not all included for each day is a motivational

or business building tip and plenty of space to capture and

book in time for todos scheduled appointments and all those ideas

that are now getting lost.

You can watch the video for free and then get your

inspired daily planner@giftbizunwrapped.com

slash inspired.

Negotiating is a valuable skill to have made stronger when you

think and plan for it ahead of time.

When you have strategies and pre-thought out actions in your back

pocket, you won't give away the house or you'll taken advantage

of. Instead,

you can lead the conversation,

offer options that fit the situation and stay in control,

cool, confident and collected.

You'll find yourself negotiating mostly around three things,

price requested freebies or add-ons and returns.

Of course,

there are others,

but these capture 90% of the themes,

so we'll focus our attention on the most common ones today.

It's helpful to know that many people consider negotiating a game.

I know it may sound crazy,

but they consider it part of the customer seller interaction,

if you will.

Here in the states,

retail negotiating is less common than overseas,

which is why it feels uncomfortable.

I mean,

here you walk into a store and either decide to pay

the price labeled on the item or you don't.

Negotiating does happen here at garage sales or at county fairs

where there are auctions for livestock and such,

but overall negotiating on a regular basis is not part of

our sales culture,

so you may be caught off guard if someone comes up

to your craft show table and initiates a sale that way.

When this happens,

remember it's a game and you can be the driver of

the result.

There's no need to get taken advantage of or give in

to a customer's offer.

We'll talk about how to manage this here in a minute.

As I said,

overseas, you frequently see people bantering back and forth before a

sale. There can even be theatrics involved.

One side will get insulted at the offered purchase price offended

that what they're selling is suggested to be worth so little

while the other side acts shocked that it would be so

much people even walk away from a sale only to come

back later and agree to the final price offered.

My husband having grown up in Israel is an expert negotiator.

He learned from his mom observing her purchasing behavior when buying

vegetables and meat for the evening meal.

EMA was a pro.

Michael says the vendors would see her coming and prepare for

the lively banter to come.

It was all good natured and they always parted with an

exchange of goods and smiles.

So approach any negotiation with this in mind.

It's a game.

Another thing,

your goal is not for one of you to win and

the other to lose.

It's for both of you to walk away feeling good about

the interaction.

Neither side may have gotten all they wanted,

but both feel valued and that their needs and input were

seen at a mutually beneficial agreement was met.

One caveat here,

if you're confronted with a belligerent or abusive,

leave it or take it,

type intervention,

choose to leave it from experience.

I can tell you that if a relationship starts out that

way, it will be that way forever and that customer will

become the bane of your business existence.

There have been several times I've told someone that their demand

wasn't doable,

even when I offered solutions to accommodate their needs.

Guess what happened?

Most of the time they accepted the solution and became a

non-combative customer in the future.

It's like the old saying,

you teach people how to treat you anyway,

my point is there are some people where nothing you do

will please them and you agreeing to something that costs you

money is never in your best interest long term.

Let's move into some pre-planning strategies,

shall we?

We'll go through responses for the three most common areas where

negotiating could arise.

The first being price.

Of course,

someone offers to buy your product at a price below what

is marked.

Here's where knowing your margins and pricing your product properly will

be all important.

As the business owner,

you can always decide whether you wanna take someone up on

their offer or not.

Maybe it's the end of a show and you don't wanna

take any product back with you,

or you wanna sell all last season cents to make room

for the new season specials.

These would be reasons to accept a lower price situationally dependent,

of course,

but in this case,

make sure you agree to a price that still covers your

costs and explain why you're willing to drop the price.

Very important.

Let me repeat that.

Explain why you're willing to drop the price.

You can say things like,

okay, let's do it that way.

I don't have to bring them back to the shop or,

alright, enjoy the last of these fall summer cents and make

sure to check out the fall cinnamon and pumpkin conversions.

That'll be available next month.

Providing justification for a reduced price doesn't cheapen your product and

also doesn't set their expectation that they'll be able to get

a lower price next time because they did today.

Another strategy for you to use when you're asked for a

lower price is offering a discount on multiples.

A single bar of soap is seven,

and when you buy three,

it's 18.

That's almost a 20% discount.

Have these options thought through ahead of time and include them

on your signage.

You'll sell more product overall,

and you have an answer for that customer who wants a

break in price.

A third strategy for the price negotiation.

If you plan to stay firm on your pricing,

offer them another option to receive your product.

A raffle is great for this.

You can say,

I'm not currently offering lower prices,

but why don't you enter the raffle and potentially win a

scarf for free?

Then of course you ask for their name and email so

you can reach out to them later and continue the communication,

whether they're a winner or not,

that's a win for you and an action for them that

doesn't feel like a flat out rejection.

Moving on to freebies or add-ons,

a second place where you can get into negotiations.

What I mean here is when people say they'll buy something

but then want you to include more on top of what

they paid for the product for free,

like maybe they'll say,

I'll take the scarf,

but can you include a pin at no charge?

Or, I love this wonderful dog collar,

I'll get it,

and will you just include customization or they'll try and switch

out a more expensive version of your product at a lower

products price.

Depending on what you sell.

Think about these possible scenarios and decide on your response accordingly,

and don't be afraid to negotiate back.

Say, I'll do that for you.

If you take two instead of one,

you can use the second one as a gift or offer

them a chance to get into your exclusive club with first

looks at new designs,

or give them two punches instead of one on a loyalty

program depending on what you sell.

Again, think through these possible scenarios and decide what a good

response for you would be.

The third area of negotiation that we'll discuss here is returns.

Obviously, if there's a return due to an error on your

part, it's your responsibility to make it right at your cost.

We're not talking about that here,

but if someone wants to exchange a product or return it

because they don't want it anymore,

have firm rules in place for this.

When this is an online transaction,

typically businesses will require the customer to pay for sending a

product back and pay for shipping again to resend a new

product. Also,

remember, in a delivery situation,

you have other costs like time for preparing the order to

leave the shop,

packing materials and things like that.

That's why you'll sometimes see a shipping and handling fee added

to a sale at checkout.

Whatever you decide for returns,

make sure to explain clearly on your website what the procedures

are. You may decide you wanna talk to a customer before

you initiate a return.

You may send them a return label or request a return

percentage that is taken off the return credit.

There are lots of ways of managing this.

If you're addressing a face-to-face return,

this is more likely where negotiation could occur.

The solutions to these will probably fall into the first two

scenarios we've already covered,

so once you plan your responses,

you should be good to go there.

In conclusion,

keep in mind that some people want to play the negotiation

game because they just wanna test the system.

They wanna ensure that they're getting the best possible deal.

I found the best emotional approach on your end is to

stay calm and place no judgment on the event ways of

interacting. Just like personalities come in all shapes and sizes,

accept it and join the game.

You're getting a chance to interact with a current or potential

customer, and you do have the opportunity and ability to walk

away from this engagement having left an even better impression than

if there had been no negotiation at all.

That's a wrap.

I'm a get to the point kind of girl,

and this is what you can expect from these quick midweek

sessions. Now it's your turn.

Go out and fulfill that dream of yours.

Share your handmade products with us.