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How To Deal With Extreme Haggling?

 
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Old 12-18-2014, 02:56 PM   #21
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Re: How To Deal With Extreme Haggling?


The goal of the first meeting for me is to estimate it, explain it and then get a deposit. Will try to write more later.
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Old 12-18-2014, 03:34 PM   #22
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Re: How To Deal With Extreme Haggling?


I had a similar situation this summer for a couple who wanted their whole house painted. I'm fairly new to the sales aspect of a business like you and I was really taken back by the extreme (from my point of view) aggressive negotiation tactics, everything from the day and time I was to come to take a look at it to the kind of paint I should use, to how they wanted the quote broken down. The part where you talked about the wife just going in circles without listening to anything took me for a head spin. I was woefully unprepared for what felt like a hostile negotiation. So many red flags went up that I put a 20% PITA factor on the quote. I ended up turning it down because I didn't know how to deal with it properly. Still to this day she calls me or stops me at another job site (she's the friend of the neighbour of my client) and still wants to haggle with me.

I really like your optimism and viewing it more as a business challenge than a personal attack. The sales aspect is my weakest point and something I'm trying to work on. I have been working on a strictly referral basis thus far and have used a take it or leave it approach to my quotes (as one member said "There are no deals in home renovation, you get what you pay for"), but I'm starting to rethink some of that. As with renovations, there's different tools for different jobs, so too there must be different sales tactics for different personality types so long as you know your numbers well and know what your bottom line has to be.

As for how/when to quote and sign contract, I never give a number on the spot, too many things to forget. I do however throw out ball park numbers of certain things that I know very well to gauge their reaction to the number, or I ask what their budget is to get a sense of if it's worth my time (David Gerstel talks about this in "Running a Successful Construction Company"). I send the quote by email which includes the draw schedule and deposit amount. If they're agreeable to the quote, I go back and give them the contract and get the deposit at the same time.

I'm just learning the business side of things, so I'm curious to learn how others deal with type of situation as well.
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Old 12-18-2014, 06:26 PM   #23
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Re: How To Deal With Extreme Haggling?


Just think about this for a moment...and try looking at this from a different prospective.

As a professional you go to conduct your business in a professional manner.
Just being there its already costing you, your travel time, gas, etc. Now you spend more time to get material cost and what ever you need to do the job, you also need a little extra in there if you run into something you're covered. Now you add your overhead and your profit ( this is what is keeping you in business)
Now you go and submit the price and right off the back they want you to take a few hundred off just to feel you out and if they feel your weakness they will take you for everything you got. If you think you gonna jack it up and knock it down, you only fooling yourself, this people already know what they wanna pay before you get there, and you not the first guy at the door, there is a few ahead of you and a few will follow the minute you leave theirs house and they will settle on the lowest price and they will expect top notch job, or you will have headaches if you don't provide just that. Before you know they will become inconsiderate, rude and disrespectful if they feel they got you by your OO and they do, because you dropped the cost and you need every penny that is left to make money.

My advise to you, be firm with your prices and stick to your worth... Don't let anyone tell you that you worth less or what you should charge, and you want to have customers who will appreciate your quality work and who will respect you as a professional contractor and pay your price... just like you pay no matter where you go, stores, doctors, mechanics, etc.

Good luck
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Old 12-18-2014, 06:43 PM   #24
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Re: How To Deal With Extreme Haggling?


Keep in mind, Hindis get work done all the time. They'll build huge houses and major renovations for their extended family. Learning to do business with them effectively can give you a leg up.

Don't confuse haggling with lowest price. Even if you're the choice head and shoulders above other contractors, customs are customs. They'll spend huge amounts of money and spare no expense for things they value - like their equivalent of a sweet 16 party (or cotillion).
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Old 12-18-2014, 06:54 PM   #25
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Re: How To Deal With Extreme Haggling?


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Originally Posted by MarkJames View Post
The next time I have an Indian doc I'm going to haggle the bill.
Off the subject but I've actually done that. I haggle with my Indian doctor on the copay and the the price of the lab work. Insurance covers all of my visits but it's fun to see a $300 bill get knocked down $230.
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Old 12-18-2014, 07:28 PM   #26
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Re: How To Deal With Extreme Haggling?


Haggling is very common with Indian people, I have several long time Indian customers and 2 of them right at the start tried haggling with me and I just started to walk away and they apologized. The guy who gave both of them my name called me up the next day and also apologized and explained why they are like that and everything has been great since.

Apparently in India haggling goes on for everything, and if they dont at least try they fear they will be seen as weak. Prices are inflated because everyone knows they will come down.

I have had a few Jewish people do the same thing years ago but that happened when the job was all finished and they gave me checks with the wrong amount. The one guy told me that was his last check, I said get in my truck I will drive you to the bank. He found another one.
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Old 12-18-2014, 07:30 PM   #27
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Re: How To Deal With Extreme Haggling?


Coming from England I had to work with s lot of them. My best mates mum is fully blown Indian and even he is blown away by how tight she is. He's a contractor too.

The way to deal with them is if job is $2k you double it. So your at $4k then when they haggle you tell them you will knock 40% of that price. They think they got a good deal and you still get what you were asking then a little more because they will be fussy. But my advice is steer clear of you don't want the hassle.
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Old 12-18-2014, 07:48 PM   #28
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Re: How To Deal With Extreme Haggling?


I have a special pricing scale for them as well or I don't do work for em, depends on how busy I am
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Old 12-18-2014, 08:55 PM   #29
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Re: How To Deal With Extreme Haggling?


Quote:
Originally Posted by greg24k View Post
Just think about this for a moment...and try looking at this from a different prospective.

As a professional you go to conduct your business in a professional manner.
Just being there its already costing you, your travel time, gas, etc. Now you spend more time to get material cost and what ever you need to do the job, you also need a little extra in there if you run into something you're covered. Now you add your overhead and your profit ( this is what is keeping you in business)
Now you go and submit the price and right off the back they want you to take a few hundred off just to feel you out and if they feel your weakness they will take you for everything you got. If you think you gonna jack it up and knock it down, you only fooling yourself, this people already know what they wanna pay before you get there, and you not the first guy at the door, there is a few ahead of you and a few will follow the minute you leave theirs house and they will settle on the lowest price and they will expect top notch job, or you will have headaches if you don't provide just that. Before you know they will become inconsiderate, rude and disrespectful if they feel they got you by your OO and they do, because you dropped the cost and you need every penny that is left to make money.

My advise to you, be firm with your prices and stick to your worth... Don't let anyone tell you that you worth less or what you should charge, and you want to have customers who will appreciate your quality work and who will respect you as a professional contractor and pay your price... just like you pay no matter where you go, stores, doctors, mechanics, etc.

Good luck
I like this way of thinking, and usually think like this, in that we have in common. However, my pride lost that sale today. was a one day job and $400.00 bucks gone. I know that I did the right thing though, I just could not believe they haggled me after I has purchased the material, and was driving out there, simply did not see that one coming man. These people have a 500k house, (sighs) its just crazy. I did the right thing but was it the strategic thing to do? Could I have done anything different? I'm not desperate for business, but i'm hungry for success and feel like I failed today. My goal is to build, higher help, sub out, maybe have a shop.

I need to figure out how to counter haggle these people. Inflating prices is one way, but the most obvious. is there any other way to make them feel as if they have won? Maybe set a price in a quote, give them the quote, then act like you made a huge mistake in the measurement or whatever, act really desperate and tell them sorry and that you need to remeasure because your off by 100sq ft. At this point, that could induce the haggling process, they will become upset and say "NO, You gave me this quote" you nearly plead with them that you wont make any money like that, then inflate them, tell them that you like them, and had such good ideas and really wanted the job and eventually give in. If you could make them feel as if they won, then maybe you can come out on top. Something like this, some counter strategy What do you think? Any ideas? If anything its fun to think about.
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Old 12-18-2014, 09:14 PM   #30
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Re: How To Deal With Extreme Haggling?


To answer the original question, when they try to haggle you down, I stand my ground. Of course, if I can tell they are going to be a PITA, I start haggling up. Good for the goose is good for the gander.
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Old 12-18-2014, 09:36 PM   #31
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Re: How To Deal With Extreme Haggling?


Quote:
Originally Posted by DannyP View Post
If you could make them feel as if they won, then maybe you can come out on top. Something like this, some counter strategy What do you think? Any ideas? If anything its fun to think about.
Every buying decision that the customer makes ends up being an emotional one. If you appeal to their emotions, you can charge them twice the price and still make them feel that they got the better end of the agreement.

That's what the art of the deal is all about. Car dealers do it all the time when they offer you a price or payment that's beyond what you're comfortable with. So when you tell them that you want to pay a little less, the sales guy says, "Oh shucks! My manager is going to FLIP the HECK out! I might lose my job over this... man oh man.. I'll be sleeping on the sofa tonight when my wife finds out I'm out of a job.. the boss is gonna rake me over the coals. BUT because you seem like nice people, I'll put my neck on the line. I'll be right back." So while you think that the sales guy is getting reamed a new one by his superiors, he's outside smoking a cigarette and laughing at you with the other sales guys.

So once he comes back suggesting that he suffered a great deal of humility and submission for your sake, you don't mind meeting him half way.
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Old 12-18-2014, 09:43 PM   #32
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Re: How To Deal With Extreme Haggling?


This is ridiculous. None of us should be working for cheap, all it does is hurt everyone in our fields. If someone complains about $37 tell them to ****off. I don't care what their culture is.
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Old 12-18-2014, 09:57 PM   #33
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Re: How To Deal With Extreme Haggling?


OP- you learned more than one lesson! Forget the Indian part of the lesson....they are good people and if you want to earn their business you will master parts of their culture. Focus on:
1. Not letting people buy their own products, HTF are you going to warranty your installation if they buy crap? How TF are you going to manage your schedule if they buy products that are back ordered, not ready, of different dye lots....you buy materials from your trusted suppliers. You show up with all the correct products that include a profit margin and life will flow so much easier.

2. As others mentioned a signed contract.

3. If you are picking up supplies that a customer was suppose to provide, you need to get paid "port to port" (from your home to the supply store and back to your home). $37 or whatever the price is aside, it cost you your hourly rate, you mileage rate, van insurance rate, oh and profit. If you are operating your van (or whatever you drive) and billing much under a dollar a mile plus your labor rates and profit you are enjoying a hobby not a business.


I could go on and on...don't want to beat you up on basic business stuff...dig your heals in and you will look back at this thread and laugh in a few years.

On a side note, GF and I travel to Jamaica a few months back, she dislikes when I haggle and I generally haggle HARD in Jamaica. She gets some really bad ear infection that made her all screwed up an unable to travel back home. I drop her off at Dr Ganga (close but not the same as ganja) and after 30 minutes she comes out saying he (Indian) wants $300. She wants to walk out...I force her to go back in and she oddly being I'll strikes up a deal for I think $100....but still thinks it's too much and is trying to drag me out of the room. It throw cash on the Dr's desk and we walk out with the meds and paying for his services. Point of the story is that we got the price we wanted because we were able to walk away from a deal. In every deal one or more people are able to walk away....when you hand over a contract/proposal, are you able to walk away if it's not on your terms?

Good luck
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Old 12-18-2014, 10:26 PM   #34
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Re: How To Deal With Extreme Haggling?


I stand my ground with my estimates, never once haggled a price I tell them I'm too busy to full around with negotiations. When I answer my phone and am asked to do an estimate I always kindly note to them Im booked two to three months out, that usually weeds out the people wanting things done cheap and quick, those who want quality are willing to wait, those are the customers worth dealing with, and they generally are just amiable people.

One of my helpers who came from a cheap tile contractor asked me the other day why my customers are always so nice

Last edited by [email protected]; 12-18-2014 at 10:32 PM.
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Old 12-18-2014, 11:02 PM   #35
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Re: How To Deal With Extreme Haggling?


So what if "they" use the internet and see similar posts via google and want to haggle past your cushion amount?

Price what you need, stick to your price, win some, lose some. (I know...easier said than done sometimes)
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Old 12-18-2014, 11:03 PM   #36
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Re: How To Deal With Extreme Haggling?


I have worked with this particular group of people for some time now. In general, they want carpet removed and replaced with hardwood floors, they want electric stove removed and gas appliances, they want fake hood replaced with real vented hood. We have a temple in town so I get a lot of referrals from this group of people.

The one thing I learned from a lot of these people from this group is that they have a pecking order. They have admitted/said to me that they want to show off their home and their "belongings". They like a "bargin", but they want the best.

My standard speech to these individuals from this particular group is "Most of your neighbors cannot afford me"! Are you sure that you can. I am very qualified and experienced and can be expensive. Are you sure you can afford me?

One particular man told me it was a kitchen remodel or a BMW, I told him take the BMW because it was cheaper. He chose me for more than double the price.

You have to know what you are selling, and it is not price.
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Old 12-19-2014, 12:22 AM   #37
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Re: How To Deal With Extreme Haggling?


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The one thing I learned from a lot of these people from this group is that they have a pecking order. They have admitted/said to me that they want to show off their home and their "belongings". They like a "bargin", but they want the best.

.
.
.

You have to know what you are selling, and it is not price.
There you go.
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Old 12-19-2014, 10:39 AM   #38
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Re: How To Deal With Extreme Haggling?


Quote:
Originally Posted by tedanderson View Post
Every buying decision that the customer makes ends up being an emotional one. If you appeal to their emotions, you can charge them twice the price and still make them feel that they got the better end of the agreement.

That's what the art of the deal is all about. Car dealers do it all the time when they offer you a price or payment that's beyond what you're comfortable with. So when you tell them that you want to pay a little less, the sales guy says, "Oh shucks! My manager is going to FLIP the HECK out! I might lose my job over this... man oh man.. I'll be sleeping on the sofa tonight when my wife finds out I'm out of a job.. the boss is gonna rake me over the coals. BUT because you seem like nice people, I'll put my neck on the line. I'll be right back." So while you think that the sales guy is getting reamed a new one by his superiors, he's outside smoking a cigarette and laughing at you with the other sales guys.

So once he comes back suggesting that he suffered a great deal of humility and submission for your sake, you don't mind meeting him half way.
Ted is right, this is also why they will offer you 3 free oil changes, you now feel as though they have done something for you and in return you must do something for them, ie buy the vehicle. Its called Quid pro quo.
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Old 12-19-2014, 10:43 AM   #39
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Re: How To Deal With Extreme Haggling?


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I just could not believe they haggled me after I has purchased the material, and was driving out there, simply did not see that one coming man. These people have a 500k house, (sighs) its just crazy. I did the right thing but was it the strategic thing to do? Could I have done anything different? I'm not desperate for business, but i'm hungry for success and feel like I failed today. My goal is to build, higher help, sub out, maybe have a shop.

I need to figure out how to counter haggle these people.
I just could not believe they haggled me after I has purchased the material, and was driving out there, simply did not see that one coming man.

Danny first of all didn't you have a contract signed before you got the material? If you had a contract signed they cannot haggle you. That is breach of contract on theirs part, you can collect your profit simply on the principle without doing the job. Done that a few times and got good money for it.

I need to figure out how to counter haggle these people.

Don't waste your time on this, because doing that you opening yourself up for haggle and you will not get the job and this is your perfect example.

You do as you want because this is your business, but I'm sure many will agree with me who been doing this for a while, stay firm with your price...and when they start to haggle you simply say " This is my price and if its above your anticipated budget you have to find someone else."
This will not only earn you respect, this will also indicate you are a professional, and this your business and this is what you need to charge to stay in it. Period.

If you open yourself for haggling, you're done... you lose respect as a businessman, you display weakness, you display sign of being desperate and they will railroad you through out the whole job and at the end you be at theirs Mercy to collect.

I know sometimes its not easy to walk away, depends on your position... but that is something you have to do to run a successful business, and believe you me my friend, I took chances by standing my ground and willing to walk away at times when I needed that job the most and during times when I tried to keep my head above the water just to pay bills and you know something it paid off and I got this jobs and some even said "you got the job because you didn't budge your price and that is why we hired you, knowing it will be done"

With that said, this is just me and my way of doing things, you do what you think is best for you and what ever principles you set, don't break them, they will not do you wrong and even save your A$$ at times.

Good luck
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Old 12-19-2014, 01:21 PM   #40
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Re: How To Deal With Extreme Haggling?


Agree with everything said in this thread. Only thing I would add is that you need some ammunition to counter the continual price drop argument. When they say "I thought you were supplying grout etc." you need in your quiver an arrow like "Yes, we need to make sure all services are being paid for properly. You were supposed to prepare the surface before I did the tile work. It took me an hour to do that and I think we must raise the price $xx." This is how they haggle. Requires back and forth not just back.....then customer pay original price AND be happy about it.

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