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Monday, June 01, 2009

Price haggling: Is it a cultural thing?

This posting from BobsLandscaping in Genesee, ID on the Contractortalk.com thread: Let the Game Begin . . ." raises some interesting points about cultural sensitivity, as it relates to business practices including the points raised by the thread's original poster about potential clients playing games to try to negotiate a better price.

The issue is whether you should stand firm on your quote, or build in a haggle-factor in your pricing and be ready to deal. Some posters to the thread suggested that yes, in some cultures haggling is part of the culture, so if you want to do business with people in these ethnic groups, you should behave accordingly. Others say the haggling goes with the territory and occurs because contractors allow it to happen.

The writer of this thread sees cultural sensitivity in a deeper and more meaningful way than most. With true respect for different cultures and values, including religious traditions, you can open business doors that would be unavailable to you otherwise.

I like to look at the business of contracting as a people business. I meet people from all over the world and try to make a good first impression in order to win their business.

Knowing a little bit about foreign cultures helps me make sales. Especially in landscaping, since I'm creating personal spaces for people to relax and enjoy themselves in.

On Wednesday I'm installing a garden for a family from Nepal. It's going to be filled with peppers, vegetables, herbs, and spices from their native country. I'm also using flowers and plants that have special significance to the Hindu religion. They're also having me come by weekly to maintain it and I'll be making a nice profit from this job.

I suppose on principle I could have told them this is what we grow in America, this is the price, take it or get on the next plane home. I would have never heard from them again and wouldn't have the job.

Perhaps I'm wrong (I often am) but it seems good business sense to cater to the customers needs/desires and sell the job.

On the Japanese gardens I maintain there are very strict rules on what can be planted and where and how the garden flows. There are special religious guidelines that have to be observed in all aspects of maintaining the garden. Again I suppose I could tell my Japanese customers that they're in America now and I won't maintain a Japanese garden.

But why though? Can you give me a good reason why? I enjoy it, my clients love their spaces, and I make good money at it.

I also maintain and install Buddhist meditation paths. They are special gardens for walking meditations. There are extremely strict guidelines for how the garden is laid out and how I can work on it. For instance all maintenance must be done with hand tools. No machinery allowed. Not even a gas lawn mower. It disrupts the spirituality of the garden. I charge extra for that and do OK.

Yeah I realize we're in America, but this is a land of immigrants. Always has been, always will be. Yeah it's a pain to deal with the special requirements at times, but it's also rewarding. Not just financially.

Perhaps I'm too open minded, what do you suggest I do? Leave money on the table out of principle? Walk away from jobs because they're not American enough?
But what about the principals and choices involved in price haggling and negotiation, overall?

I'm not so sure what the correct response should be, except that you should never allow yourself to settle for a final price below your reasonable margin. And I tend to believe that with rare cultural exceptions, you should put yourself in the position where your price is your price, and your client(s) are ready to pay because they truly trust you and respect your business and brand.

This of course is easier to say than do when you have many competitors, especially when potential clients are playing off one bid against another or inviting as many contractors as they can find to quote the jobs in some sort of "cattle call". You can to a degree escape these problems through effective marketing (which includes treating your current clients so well that they refer friends and call back for more), but there is no escaping that, with certain specialized exceptions, most people will at least at the outset invite more than one contractor to quote a job.

Regardless, you will increase your marketing success by respecting and relating to culturally diverse groups. If you really know that culture's values requires price haggling, then, play the game.

2 comments:

Anonymous said...

Marc - those glasses just aren't you.... Try some contacts and a mohawk.....

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Our home and native land!
True patriot love in all thy sons command.

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O Canada, we stand on guard for thee.

Mark Buckshon said...

No, not all Canadians are lizards. But sometimes I behave like one.