In these difficult times for the whole of the retail sector, I think too many sales people and retail outlets are forgetting the power of negotiation and how, letting customers haggle for discounts, can actually boost overall sales and revenues. I was at the first BBC One Show Roadshow in Sheffield, in the Money Zone feature, talking about negotiation and the five ways to negotiate.
The basic rule is to negotiate every single day. Negotiate everything that you do in life. For example, I went into a Marks & Spencers store with my partner to buy a suit bag, some new shoes and a shirt and tie. I like the store because it’s quality, it’s reasonably priced and you get the selection as well.
But my partner warned me that I’d never get money off in the shop, so I asked the assistant for a 10% discount as a regular customer. When I was told they couldn’t do a discount, I asked to see the manager, the decision maker. My partner was, by now, obviously cringing and wanting the world to end because of my cheek.
At this point I usually skip into ‘secret shopper’ mode and try to see that if they think I am a secret shopper, how far would they go to keep me happy, because, let’s face it, everyone’s up against it in terms of retail sales at the moment. So after being told they would still not offer a discount, my last ditch pitch was to ask for added value, maybe give me the little portable shoeshine gratis. But the reply was still a firm ‘no’!We left the store and my partner was mortified and told me an iconic brand like M&S do not need to give discounts because of their standing in the high streets. Well, this was a challenge and two weeks later I walked into Hugo Boss, picked up three pairs of jeans at £89 each and asked the salesman “what discount are you going to do me?” This is important because you let the seller make the decision based on his known profit margins, and the discount can often be bigger than you expect.
As it was, he took £30 off each pair of jeans explaining the shop had jeans as low as that in its sale and that he could put these three through at the same price, saving me £90! My partner had to eat her words in that Hugo Boss is a much bigger global brand than M&S and I had used the same tactics and got a totally different result.
By this time I had a rapport with the sales guy, he knew I was there to spend money and it was a sale he may not have made otherwise, so then I went on to choose a Hugo Boss suit at £370 and I walked out of the store with it for £250. The lesson is that regardless how ‘big’ a brand is there should always be a deal to be done.
So who, beyond me, are the winners in this story? Well, Hugo Boss and particularly that salesman, because I will go back to him again and have since recommended many of my friends to him who have boosted his sales figures by buying lots of merchandise from him! The losers are M&S because, if I’m looking for a quality piece of clothing, I’m now more likely to try Hugo Boss first, even if, like-for-like, I’m paying more for it. Essentially there are five rules of negotiating:
• Make sure the seller knows you’re ready to buy.
• Never be shy in asking for a discount right from the off.
• Let the seller believe he is leading the negotiation by
asking ‘what can do this for?’
• As a last resort go for the added value option to
get something out of the deal.
• Keep that port of call open, letting him know you’ll
be dealing with him in future and recommending him
to others.
Sales is a numbers game, so the seller has to be open to allowing the customer to negotiate and his best result is to come in on the added-value level and be able to manipulate the margins he can do deals with easier than those that are immoveable.
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