Making Deals?

This is the article I recently wrote for On The Edge and it will appear next month. I was inspired to write it because a customer called and told me about two of our competitors were making private deals with him in order for him to buy from them and not from us. He was told not to repeat what they told him, but of course he was. I told him we don't make deals and to know if he took one of those low deals from our competitors, we would still be friends, even "family" and I would hope to sell other items to him in the future over the years. He said he was inclined to buy from me but had not decided. I was not going to budge on price and he seemed to respect that. I could tell he was playing straight with me and not just trying to get me to come down on my price.

I don't think I will change any minds with my article, but the wheeling and dealing we see in our business rankles me and writing helps me let off steam. Undoubtedly sticking with your prices can't hurt business very much. We are up significantly more than last year in every aspect of our business and have broken records in scissor sales and sharpening equipment sales. We anticipate a good year next year and other than a tightening of credit, the recession has had very little affect on Bonika Shears. I hope your year was a good as well and I hope you will enjoy this article....

Don’t Play Let’s Make a Deal

It is tempting with the poor economy and the increased competition to play “Let’s Make a Deal.” However, before you start the game look at some points before you make individual deals pricing sharpening, selling shears or selling any other product.

• Your deal will become public
  No matter how much your customer tells you he or she will not repeat the deal you offered him, within fifteen minutes most people will have told someone. If they tell your competition you can be in real trouble. One of our sharpeners, Ron has a competitor who makes deals on sharpening. When Ron comes across one of his competitor’s accounts rather than getting in a price war, he encourages them to ask for the $8.00 sharpening deal next time from their old sharpener because he knows Sally’s Salon has her shears sharpened for $8.00 a pair. Ron says he feels like he is just doing that salon a favor. Very often they are so angry at their old sharpener they begin using Ron at his customary higher rate.
• You sully your reputation
  Think how you feel about a car dealer and other salesmen who haggle with you on price. Even if you get the sale, very often the customer wonders if you are holding out and they could get an even better price. Once you begin to deal it is hard to stop the spiral. Soon every sale will take three times as long and you will be making less profit because you must negotiate over the price with every customer. Then if you don’t remember that you gave them a deal the time before and try to charge a higher price they may think you are trying to cheat them.
• You can start a price war
  Even if you win a price war, you loose. Once you lower your prices it is hard to go back up. What does it matter if you get all the business and make no profit? It is really so terrible that you share an area with another sharpener and you are both succeeding. A competitive nature can have it’s limitations in business. Set a price and stick to it.
• You are cheating some of your best customers
  A double standard in pricing from one individual to another is in my opinion, wrong. The Bible says, Differing weights and differing measures – the Lord detests them both. Proverbs 20:10 NIV. Making a profit it certainly right and Biblical, but measuring (or pricing) unequally is wrong. Very often it is the arrogant, obnoxious customer who will get the best price while the meek client will pay the most. This just doesn’t seem fair.
  
  If you want to reduce prices and give a deal, you should make this offer to all your customers or have a reason to give a special price. We give 10% off our shears to all students and teachers all the time. We also give 20% off to platform artists, all the time. We may have a razor or dryer give away with a pair of shears but it is offered to all our customers for a period of time or to those who have a coupon. To make on the spot deals to get a buyer may work in the short run but it is a difficult way to run your business. If you start the Let’s Make a Deal Game you may learn to regret it.