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How to haggle November 6, 2009

Last week, I was in China having another adventure.

During my stay I had the joyous opportunity to visit a few large bustling markets. These markets are full of small (usually no larger than a few meters square) open stalls, filled to overflowing with all kinds of merchandise and staffed with some of the best negotiatiors on the earth.

All of the markets I visited haggling for price was expected. When I first arrived, I was told this, but forgot some of my most important haggling skills. It’d been almost a year since bartering on the streets of Bangkok, and I’d forgotten what I was doing. And this is why I’m doing this post – to remind me what to do next time, so I don’t again pay a 100% markup on items.

Bad example 1: My first purchase of the week I asked for the item by name. Several were shown and a price of 150 was stated. I countered with 40. He dropped to 100. I raised to 50. He dropped to 60. At this point, I knew I’d made a mistake buy stating a high price too early. I walked out with the item for 50. See rules #4.

Example 2: Later that same day, I haggle over a sweater. The sales girl starts with, “This is nice, genuine cashmere” (see rule #14), “last customer I sell for 1200, for you I give you best price 1000.” (see rule #3).
I counter with “Too much. 10.”
She gives me an academy award performance of shock (rule #24), “No. Best cashmere. Last customer I sell for 1300 (yes, in direct contrast to the 1200 thirty seconds ago), for you 900.”
“No, way too much. Thankyou.” I say, turning to walk away (rule #5). She grabs my arm.
“How much, real price, not crazy price.” (Rule #15)

Example 3: I’m haggling for some belts and we’re about half way through the negotiation. She says “You good bargainer.” I say, “You’re better.” (see rule #9, #26).
She thrusts the calculator into my hand again, “your best price.” I type out another very low offer, she looks at it, looks at me with confusion and says jokingly “You Aussies are usually so nice.” (see rule #24).

Example 4: I look at some nice fans. The girl shows me the variety, explains the double silk and bamboo construction. The opens the negotiation with 200. I shake my head say “crazy price” and just walk off. She yells after me, “100! Ok 50. You good bargainer 20, 10!” (see rule #5, #15)

Example 5: I’m haggling over a teapot. Their initial price 500. Mine 20. They come down some, I immediatly jump to 80. We then spend the next 10 minutes with me staying on 80, and them dropping the price by increasingly smaller amounts. They began getting frustrated that I wouldn’t raise my offer. (See rule #11.)

Bad example 6: I’m haggling over some luggage. There was about a thousand RMB difference between our two prices, and I’d already raised the max I would pay twice. I guessed (incorrectly it turns out) that we can’t meet so start to walk away for the third time. The sales girl physically stops me and says, “Best price,” and for the third time I give the same price I did last time. I then start to move her and she says, “ok,” dropping 1000 off her last offer. (Rule #5, #2 and #21).

Bad example 7: Negotiating hard for a nice jade pendant and silver chain we’d tested the jade several times to prove it’s real jade and not plastic. The chain was a fine silver chain. Once we settled on price, she took away the chain and pendant and offered it to her assistant to package. As I’m watching to ensure they don’t swap for a similar looking plastic pendant, the attendant says, “which sized necklace?” and they swap the necklace right in front of me. It’s not a bad replacement necklace, just different than what I was negotiating for. See rule #31.

So after those examples, these are my loose rules for haggling. They can be used anywhere, and even extended to bigger price negotiation, but work best for small scale, one off situations that you find in these kinds of market.

  1. Let them state the price first.
    You might have been happy to pay that initial price, now you know you would be paying too much.
  2. If you think you got a good deal, you did. It doesn’t matter if someone else got a better deal or you could have got a better price if you did something different.
  3. They will usually give an overblown price, then immediately discount just for you. Related to rule #10.
  4. Counter with 1/10 price or less.
    This is highly dependant on the market, some more, some less. However, you’re low-balling, just like they are high-balling. Do so with a smile knowing you’ll haggle. Related to rule #11.
  5. At least once walk (or threaten to walk) away, if they call you back, or yell a lower price. The relationship and negotiation is still on.
  6. Except in the most extreme situations, it’s unlikely they’ll ever sell at a loss. That means profit is their problem not yours. Your job is to get the best deal you can, and have fun doing it.
  7. Joke around, flirt, have fun. This is enjoyable (or should be) for both of you. See rule #20, #6.
  8. If they touch you, touch them back in the same way.
  9. If they compliment you, compliment them back.
  10. They often have a bad, fake or broken version of the product you’re haggling over. They might offer you the bad version for your last price. This means you’re on track.
  11. It’s much, much easier to start low and raise your price in tiny increments, than staying on your initially higher price.
  12. If you buy and they seem angry, you got a good deal (although they would have still made a profit – see rule #6) Related to rule #24.
  13. If you bargain too hard and don’t end up making the deal. You now know their profit margin, go to another store and start over with this new information. Usually in these markets, all the stores have the exact same products.
  14. They will throw reasons at you to convince you to buy. “You can’t get this at home”, “Best product”, “Genuine, not fake”, “best here”, etc. Throw the same number back. “I have to carry it home”, “Not the colour I want”, “See the scuff mark here” doesn’t matter what the reason is, use it to justify your last price just as they do.
  15. Use the exact words one stall uses with you on another. “Crazy”, “kill me”, “hard bargainer”.  Etc.
  16. Say no many times before saying yes.
  17. Go in early or late. First and last customers of the day have an easier time getting a good deal through most of Asia.
  18. Take their comments and compliments and own them. “I am your best customer!” Tends to throw them off.
  19. They are the person that’s working. Make their job enjoyable and you get a better deal.
  20. Have fun. Smile, joke around. See rule #19
  21. Do some preparation before hand. Find out rough price guides for what you’d be expected to pay. Ask many locals (and some forigners for comparison). Incorporate this information into you initial offer and maximum price.
  22. Make one, or a few tiny purchases first. Things you might not want, but can use as gifts. Haggle very hard. Haggle so hard that the shop owner doesn’t sell to you. This gives you direct experience on what to expect when you’re haggling too hard or too soft.
  23. Do not raise your voice or get angry. It’s never ever personal. See rules #19, #20.
  24. They can act well. You’ll experience shock, upset, mild anger, and other emotions. They might even laugh at you and throw insults in your direction. “Aussies are usually so nice.” Act back, win an oscar for me.
  25. Keep an ear out to the haggling going on to your left and right, you can know how good or bad yours is doing comparatively. Did the person before you pay less or more? You can also use this to know the markup. See rule #4, #21.
  26. Flattery works both ways. See rule #9 #15.
  27. Carrying a bag with purchases changes the dynamic. You’re now a confirmed buyer of ‘that product’ and usually get a better response. They might ask how much you paid, you can use that to negotiate another one of the same for cheaper.
  28. You will not be treated as the unique individual that you are in the beginning. You will be offered an initial price based on some unknown reason. Could be their standard price, could be your accent, shoes, haircut, or just that the last guy paid off. It’s not about you. See rule #23.
  29. When a second person joins the negotiation, you’re getting a good deal, or having fun or both.
  30. Bulk or multi item discounts add additional aspects to the negotiation.
  31. Watch for the bait and switch.

Above all remember their job is to get as much money as they can out of your wallet and yours is to keep as much as you can in your wallet while getting the items you want and have fun doing it.

Do you have any others that you use?

Accept the events you cannot control April 20, 2009

Some of you that know me, know a little of my work history. For many years I slaved as an IT technician. The work kept me in freezing data centers to all hours of the day or night (although in a data center, you can’t tell if it’s day or night!). The work sometimes involved high pressure, with hundreds of people being impacted and having my boss’s boss calling me.

And that was just the day to day work – it says nothing of the occasional angry and abusive interactions I’d have with other people. One particular memorable occurrence, not long before I finally snapped, is one of the database admins storming up to my desk within minutes of my arrival.

“Why haven’t you done the changes I’ve asked for?” He demanded.

“What, no hello?” Too early and I’d not yet had my morning coffee.

He looked at me as if I was the only one with the bad attitude. “I put the changes through weeks ago, they are still not done!”

“Ok, slow down. Which changes specifically?” Yes, I talked like that even way back then.

“Don’t give me that, you know the ones I’m asking about.”

I was tired from another late night, lacked caffeine, had not yet read my list of important outstanding tasks and this fellow was acting as if my job revolved around him. I rubbed my forehead.

“I don’t.” I replied, attempting to calm him down some, but it was the wrong thing to say.

“Don’t give me that!” He yelled, “This is the second time I’ve come to remind you.”

Now I didn’t recall the first time, I’d forgotten other things in recent weeks. “Did you send me an email last time?” I asked calmly.

“No! You said you’d take care of it.” He replied indignantly.

“Send me an email and I’ll get to it.” I said turning to my monitor and put on a pair of headphones. He stood for a few seconds with him mouth open and then stormed off in a huff.

This story shows two sides of the same coin. One side is me not taking on someone elses responsibility, the other is the DBA being emotionally attached to and effected by my lack of attentiveness.

Both of us describe one key aspect of being in control of your stress. And that key is accepting events that are outside of your control.

For example, no matter how hard you try, you can’t control another human (or even pet)! You can influence them, ask them, plead, yell, scream and complain, but you can’t control them. That database admin would have loved to control me; instead I just made his life more difficult and stressful.

You can control your own thoughts, emotions, choices, influence and behaviour. You can’t control consequences of your actions, other people’s reaction, or the responses to your influence. That DBA had no idea I’d respond the way I did, and wasn’t able to keep himself calm.

If you are trying to control things out of your control you begin to feel directly responsible for other people’s actions. You are constantly trapped thinking their actions are your responsibility, but having no ability to change their behaviour. This is a sure path to a short and stressful life.

That’s all well and good, but how do we let these things go? There is an aspect of artistry to this act: How much do we change ourselves, and how much do we change the world?

Primarily it’s a mental shift and difficult to teach directly. To get that mental shift, the easiest way (at least to start) is to focus entirely on exactly the things you can control. I.e., yourself.

With practice, you can change your emotional responses directly. You can only ever change other people’s emotional responses via influence. The main way we influence anyone is verbally (at least in the beginning). If you could only talk, what would you say to get the result you wanted from someone else? How do you respond? Think about the story above, what would you have done as the DBA to get me to respond differently? (Some tips: I don’t respond to threats, yelling or whining. I sometimes respond to bribes, begging and pleading.) Write your responses in the comments below – there are no incorrect (or even correct) responses, so feel free.

The next step, once you achieve this mental shift, is to fully appreciate that your emotions can be directly seen and experienced by the person you’re speaking to. Being in control of your own emotional response dramatically improves your influence! But I’ll leave details for how to do that for a later date.

P.S. If the DBA in the story happens to be reading this, I hope he accepts my sincere apologies.

Ten Points to help in Selling with Powerpoint June 15, 2008

I’ve talked about PowerPoint before. I don’t like it so much, but many companies insist on using it for everything.

One such company I was recently working with used it for all sales presentations. That’s right; a ‘Death by PowerPoint Sales Pitch’.

I watched one of the presentations, and the sales guy came a distant second to the slides. This destroyed his sales abilities. He was a good salesman when able to interact directly with his clients, but stuck behind PowerPoint, he really struggled. Is it any wonder the companies sales were low?

In an ideal world, we wouldn’t be forced to use PowerPoint in our sales presentations. If we are, there are things we can do to improve the results we get.

So we sat down and devised a new set. This set used his sales skills directly in the presentation, with the slides to back him up. This slide set also used little known persuasion techniques from a variety of sources to improve his sales results.

So what did we do? Here is a list of what and why…

1. Each slide is given a unique headline that describes a benefit to the client in one single sentence. This benefit is then expanded within the slide itself. The only time you’d mention a feature is if in direct reference to the benefit the client gets. Some example titles might be:

2. These headlines are written in an active voice. Drop the cold wet fish of business language and use active, first person language. Doing this actively involves the readers brain, and keeps their attention longer.

3. Make the slides about the client, not about you or your company. How can your product and service help the client directly? They don’t care about you or your product and service. They only care about how you can help them.

4. Each slide is to have no more than 5 bullet points (Each point written in active, first person language). The reason for 5 points only, is because there are volumes of research on how the human mind can only deal with 7 +/- 2 chunks of information. Some people in the room might be able to deal with 9, but the actual decision maker might only be able to deal with 5. Why risk it?

5. Each and every slide and each and every point of every slide must defer to the sales person to explain and expand on. If the points are well written, everyone in the room with is waiting with anticipation for the sales person to discuss it.

6. If you must read the slides out loud, then use a laser pointer so people can follow along. Otherwise they’ll be reading at different speeds, and starting to get annoyed as you fight directly with their own reading style.

7. This goes for every sales situation, but get excited! Your excitement in the slides will be directly transferred to your listeners. If you are sitting at a desk, watching your laptop, it’s hard to get excited. You might have to stand up and move around.

8. Make sure your regular set of objections are covered somewhere in the slides! The more regular, the sooner you cover it.

9. Have different endings to your presentation. There is a well known adage in sales; “When the customer is sold, stop selling”. It’s difficult to do this with another 15 PowerPoint slides remaining. Within PowerPoint you can create a web site like structure, so instead of going from one slide to the next, you can jump around. Giving more details on a direct benefit the client is interested in, and skipping the ones they’re not.

10. On each slide as the last point, ask a question that is answered by ‘yes’. This can help test for closing and uncover objections on each slide.

Bonus Extra
11. Use pictures. If you can’t find a good picture that describes what you want, then use a picture of a face. Humans are hard wired to recognize and respond to faces. Doing so will keep attention focused and make the slides more memorable.

There are a few more subtle methods we used that were directly related to his client’s problems, but these should get you started on redesign.

Any other ideas or pointers you have used to get good results?

How do you make decisions? March 18, 2008

If you are like most people, you don’t know the process you go through to make a decision. It happens quickly, naturally, and without our awareness.

The easiest ways to discover how you make a decision, is to take 4 of your friends out to dinner.

When you are handed a menu, place it closed in front of you and watch your friends. Notice how one might ask what someone else is going to have. Notice another might read through every item. Another might glance at the menu and close it. The fourth will do something different.

Once they have made their choice, pick on one of your friends with these questions. (I’ll leave the decision of which one to pick up to you, but if you’ve worked with me before, you’ll know my selection criteria).

“What have you chosen?” Listen closely to the answer. They will likely tell you everything about their decision process. Once they finish, ask:
“What made you choose that?” And again listen to their answer.

If you’re lucky, they’ll say something like “I looked through the menu till I found the dish I had before,” or “I opened the menu and picked the first thing I noticed.” If you’re unlucky, they’ll give you a long rambling story about their childhood. Both will tell you how they made that decision.

Now comes the real challenge. Pick up your menu and use their method to choose food for yourself. This doesn’t mean choose the same dish (although you might). If they choose something they have had before, then you do the same. If they choose the first thing they see, do the same.

Doing this can give you a powerful insight into your own decision method (and might have you eating something new – always a bonus!).

So after doing this, what does that get you?

Notice how the people around you make decisions. Notice how you make your own decisions.

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Bad training gives information, good training gives skills May 29, 2007

I’ve been to many training sessions. In business and out. Most are glorified information transmission. The 8 hours I spent in the room would have been better spent with a book.

Then there are training for sales, negotiation, management, leadership that expect to transfer skills via this same method. The instructor stands in front of the class and lectures using powerpoint slides. Unfortunately a lecture is a very poor method to transfer skill (or anything else, for that matter). If you are lucky, you get a short, contrived exercise that gives you a false sense of the skill.

Even worse are these leadership and group bonding situations. They claim to improve group dynamics, yet all they do is have the group use exactly the same skills and behaviour in a different context. So if the group didn’t work in the office, chances are it’s not going to work outside.

Ideally, training requires a mix of theory combined with challenges and exercises. The theory is to transfer the “how” of the skill. The exercises designed to practice the theory, and the same time stretch the experience of the students and allow then to practice the “how”. The percentage of each needs to be managed with the outcomes of the course and current student skills.

The metaphor I like to use is: describe to someone how to ride a bike. You can read all the theory in the world, talk to BMX and Tour de France experts, and watch thousands of hours of video. Then, when you get on a bike you realise it’s not as easy as it looks. Learning how to ride a bike contains about 2 minutes of ‘theory’ (this is how you steer, this is how you go forward and stop). Then about 30 to 60 minutes of direct experience, trial and error. From then on, it’s practice.

So next time you attend a training seminar that claims to teach a skill ask yourself the question. “When I finish this training do I know how to ride a bike, or can I ride a bike?”

Communication is Manipulation March 26, 2007

Most people have this strange thought that manipulation is evil, bad, and should never be done. Unfortunately we can’t escape it.

I had a discussion with a sales manager the other day about some of the standard sales closing tactics. For example, do you want the product delivered on Thursday or Friday? This sales manager didn’t like to use these methods because he calls it manipulative.

It took me a little while to explain that all of sales is manipulative. That’s how sales people do their job. They manipulate their client into purchasing the product. In the end he understood when I explained that asking a question – or any communication – is manipulation. You’re changing the listeners state, getting them to accept your idea, alter their perspective or just sending their mind down a different path. For example: On what side are the hinges on your front door?

You have to stop your current thoughts, imagine your front door and then answer the question.

Now I’m sure to get many complaints and comments that sales people don’t manipulate, or that some do, but I don’t. These comments and complaints are another form of manipulation – attempting to get me to change my idea or alter my perspective (but send them anyway). I am doing the same manipulation back at you right now.

The reason it seems most people shy away from manipulation is because they think it removes freedom of choice. What really removes freedom of choice is when someone refuses to accept the responsibility for the manipulations they engage in. They’ll happily excuse away abusive behaviour because “it’s natural and genuine” or “that’s just how I am”. You’ll often hear “Genuine people don’t manipulate”. As some counter examples, Stalin was natural and Hitler was genuine. Being natural is no excuse for bad behaviour. So not only do these people limit the choices of people around them, they remove choices from themselves as well. Being responsible for your own communication creates more choice for you and your listeners.

All communication is manipulative whether it’s purposeful or not. All great communicators know this. Because of this knowledge these great communicators know they are responsible for the results of their communication. They know that when you talk with them, and you get benefit from it, you’ll do it again.

So how are your manipulating your listeners?

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How to stop the upsell January 5, 2007

I am sitting in a cafe awaiting my coffee. I considered ordering more, but was ‘persuaded’ not to by the waiter.

The interaction went like this:

Waiter: “Are you being served?”
Me: “Not yet. Can I have a decaff cappuccino …”
Waiter: Cutting me off “That’s it,” with a horizontal chopping motion with his hand.

I was going to order more, but he stopped me. His statement (not question) combined with a hand motion that is often used to show boundaries or where things stop lost the cafe money. Now I’m trained to be aware of and use these behavioural patterns, yet even though one part of my brain notices this interaction the response coming out of my mouth almost involuntarily is: “Yes. That’s it.”

And I’m sure the waiter wonders why he doesn’t get many tips.

P.S. Happy New Year.

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The secret to overcoming any excuse… August 21, 2006

… from anyone, anytime. Including your own excuses that cripple your motivation.

Everyone seems to want more motivation. Often I hear from people that some days they just can’t seem to get out of bed, go to the gym, or eat healthy food. Yet those same people don’t connect the excuses they use to their lack of motivation.

There is a very easy method that you can used to immediately drain the power from any excuse you have (or, for everyone in sales, any excuse you are given by someone else).

This will work with _every_ excuse. Though be aware that once you reduce the excuse, that does not necessarily mean you are motivated. You have only taken the hand brake off, you still need to press the accelerator.

Before I explain how to nullify an excuse, I have to explain a little about the structure of an excuse and how it hamstrings motivation. Every excuse can be described in the form of:

Not action because of excuse

This can be said in many different ways, but can all be boiled down to that structure. Some examples are:
“I can’t go to the gym because I’m tired.”
“I would like to go to the gym but I’m too tired.”
“I’m too tired to go to the gym.”

Now the secret here is to change the relationship between action and the excuse. With the examples above there is a direct relationship between the action and the excuse and the excuse stops the action.

I’ll give you another example:

“I can’t go to the gym because I’m sitting on the couch.”

Now if you are like most people, you might start to wonder about the validity of the excuse. I should go to the gym because I’m sitting on the couch. This example starts to show how the excuse – any excuse – is in no way required to be related to the behaviour being avoided.

So knowing this, how do we change this? Once you know how, it’s very easy and you will no longer have an excuse to have an excuse.

The simple method is to use the word ‘and’. So you would change the structure of the excuse to:

Not action and excuse

So changing the above examples you would have:

“I can’t go to the gym and I’m tired.”
“I would like to go to the gym and I’m too tired.”
“I’m too tired and [would like] to go to the gym.”

Say these changed excuses to yourself and take notice how you feel about the action. Next time you hear yourself give an excuse, change it and take notice of your feelings. I’m sure you’ll be surprised to find yourself being much more motivated.

And as I hinted at earlier, you can use the same technique on others and here’s how. When someone gives you an excuse reply with the exact words they used for the action and excuse, replacing the linkage words (because, but, or others) with ‘and’. Often they will nod, as if you have agreed with them. Try it, and let me know your results.

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Stupid business policy that costs over $10000 per month June 13, 2006

This happened last week.

A company policy states: ‘…any order less than $10000 is charged freight. Any order over $10000 is not charged freight.’

This month’s order was only $9950. The company, following the policy, charges the $150 freight. So, after a few phone calls, it becomes apparent that this policy is immovable. Buying $50 less will actually cost $150 more. So, doing what any customer will do when they think they are overcharged or treated poorly, they move their business elsewhere. So after 3 years of business worth over $10000 each month, the customer takes their money elsewhere.

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Social conditioning binding March 25, 2006

Steve Paulina has an interesting write-up about how you can get many benefits in your life by expanding your perspective.

You can read it here.

Interestingly, he does not talk about changing your perspective. Usually the most useful and powerful method to help you sell more, get you out of a depressed state, understand someone else’s motives, relieve stress, reduce performance anxiety, learn new skills and much much more.

I’m working on a nice write up of how to actually change your perspective in a useful and effective way. I’ll put a link up here once it’s finished…

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