I receive the You Need a Budget newsletter and in a recent edition, Jesse had a good suggestion I wanted to share with you all. I emailed him and he said it was fine, so here goes. (BTW, YNAB has started a new savings area you all might want to check out.)
Oh, I wish I could take credit for this, but it was actually based on an interview of Richard Paul Evans that I heard on the Glenn Beck show while I was driving around the other day. Glenn Beck described it as:
"Seven words that will change your course, seven words that will change not only I believe your financial future but also the course of your life."
Those 7 magical words? Is that the best you can do?
Period.
Embrace any silence that may follow.
Use this all over the place. Use it at restaurants, retail outlets, hotels, airports -- everywhere. Evans says it's a rule for every one of his staff members to use that line whenever they're purchasing anything. They're seven harmless (but powerful) words! They'll cause no embarrassment, you'll feel no pain, and you'll likely end up saving a bundle.
What you'll find happens nine times out of ten is that the person will come back (after having spoken with a manager or whatever) and offer you some percentage off, and then apologize for not being able to offer a steeper discount.
Do this in places where negotiating just never happens. Walmart. Gap. Target. You will be amazed at what happens! And at the mom and pop shops you'll find an even easier time being able to talk to the person that can actually call a few shots.
Is that the best you can do?
If you're looking for a full-on thesis regarding negotiation, this little email won't be for you. However, the excellent book Gettingto Yes: Negotiating Agreement Without Giving In
will certainly suffice. It is a great source if you find yourself wanting to improve your negotiation skills. I highly recommend it.
I think I have a new favorite seven-word phrase. ;-)
Anyone out there use this now? What are your results?
How would that even work at Target? Whom do you ask? The cashier, so far as I know, isn't empowered to make any decisions.
Posted by: Matt H | March 28, 2009 at 07:53 AM
Hmmm, I love saving money but man am I a wimpy bargainer!! I'll go out on a limb and try it but I'm not sure where.
Posted by: Sarah | March 28, 2009 at 08:21 AM
Along with Matt H - I would like to understand how this would work @ Target. Or IKEA. Or any large chain where it seems like the prices are very standard, and where there isn't exactly a pile of inventory sitting around.
Please elaborate in another post. :)
Posted by: Isabel | March 28, 2009 at 11:12 AM
Like some of the other people who commented, I'm not sure how this phrase will work at Wal Mart but I really like this phrase and see how powerful and useful it can be.
I think another good use for this phrase would be for one to ask themselves that in every situation. It would certainly be a good self-improvement technique!
Posted by: Keith Smith | March 28, 2009 at 12:24 PM
Man, that has been my favorite phrase for at least a year now. Word for word it is amazing to use. I've cut phone bills, cable bills, buying used appliance within the last couple months with it.
Great job!
Posted by: Baker @ ManVsDebt | March 28, 2009 at 01:38 PM
I tried it yesterday when we needed a stove from an appliance store, but the salesman said he couldn't do anything. Not even include a $20 hose that we needed for free. The stove was already discounted but it would have been nice to feel like I was in control.
Posted by: Line | March 28, 2009 at 02:32 PM
From a retailer's perspective, if after I have spent 15 minutes or more helping an indecisive customer finally make a choice and he then comes out with a phrase like that, well, God bless him, I might ask him to leave! I'm sure it's worth a try anyway though.
Posted by: Donald | March 28, 2009 at 04:41 PM
As a member of the corporate retail world, I don't think this phrase would fly in any stores where prices are mandated by a group of VP's who are operating off of a corporate business plan. To walk into a multi-billion dollar store (ie: wal-mart) and try to haggle down the price of a TV would seem a waste of time considering it is a corporate price strategy that has a specific life-span tied to the retail price. This phrase seems best suited for an environment where competition determines the price structure. It works in an environment where the gatekeeper is given freedom to work with a range of prices (ie: mattress suppliers, cell phones, cable companies, auto dealerships, and hotels). The strategic goal of "is that the best you can do?" is to put the other party on notice that you are willing to walk away if they can't lower the price. This type of interaction makes no difference to the salesperson at Best Buy or Wal-Mart...but makes a lot of difference to hotels and auto dealerships who are fighting for market share and customer satisfaction.
Posted by: Richard | March 28, 2009 at 06:09 PM
I had this work at a large national retailer once. They had put a large number of down comforters on clearance and I asked if they'd do anything for me if I bought all of them. The manager did mark them down 15% more and I sold them all on eBay for a decent profit. I guess the moral of the story is you never know. I was going to buy them anyway, and asking saved me close to $600.
Posted by: Aaron | March 28, 2009 at 08:02 PM
Everything is negotiable. Don't let anyone kid you it is not. In retail you have close outs or over stocks. They want to get rid of them so why not ask. The days of asking for a better price are here.
Posted by: daryl | March 28, 2009 at 09:14 PM
To everyone saying it won't work at Ikea, Target, Walmart, etc. please just let me say I've done it.
Ikea has an open item section for things that have been returned and old floor models. I've gotten them to knock down the price on these and give discounts when buying multiple items.
Target has clearance items and will frequently sell the last display unit when things go on clearance.
Walmart has been known to have damaged merchandise from time to time and is usually flexible when merchandise is near to expiring.
Places like Best Buy will discount a TV if you buy a service plan, online retailers will give discounts and toss in free shipping if you're buying the last item in stock and it they discover it's been damaged, and lots of times big ticket items can be heavily negotiated when you're making a cash offer.
I have had these stores knock down prices to 30% off what they were asking for a clearance item which was already 75% off the original sales price, and I've gotten surprising discounts at every single store I've mentioned. Sometimes the offers they make are simply staggering, and some huge chains care less about getting full price and more about just moving the inventory to clean out space for newer items with a higher margin. If the choice is to right off a non-moving item and junk it or at least make some money off it, sometimes they'd rather make whatever they can and move on to the next money maker.
A polite smile, kind words, and a simple request will get you very far. Just keep trying, and you might be surprised.
Posted by: Katy | March 29, 2009 at 02:22 AM
As a store manager for a small independent business I want to add that it is important to ask nicely. If someone just comes in and says "Is that the best you can do?" in a rude and imperious manner, well, then that will be probably be the best I can do. I like to sell things, sure, but I also like to be treated like a human being, and I like my staff to be treated like human beings. So go ahead and ask, but ask nicely and understand that even then there may not be any latitude even from an independent retailer for a discount. We know that we cannot match the prices of large chain retailers let alone online retailers. We hope that people value the service and convenience we offer and that their "bottom line" considerations also include what kind of community they value. Is the cheapest price the only consideration? If so perhaps we should just outsource our entire economy to China, unless of course when we ask if that's the best they can do and we get a better answer from Bangladesh!
Posted by: Donald | March 29, 2009 at 08:19 AM
When I tell my friends about the discounts I get they always ask me how I get a discount and I always tell them by asking.
I went into a large home improvement store and bought a patio set for less than 50% off just by asking and they still had 3 sets left. It works very well when you buy multiples of something. I bought 3 shower heads and asked if I could get a discount, sales person on the floor said yes and got 10% off on top of the 20% it was already marked down. Just by asking!
Posted by: Stephanie | March 29, 2009 at 03:46 PM
I've got mixed feelings about this. Even in a big box store, there's a certain margin assigned for profit. When that goes down, prices don't get dropped -- payroll gets cut. So the customer gets a discount (when one wasn't planned for) but it comes at the expense of the daily sales total. And then the hours get cut for the employee. I realize people want to have a bargain, but those dollars get have to come from somewhere, and they don't come out of the fatcat's pockets.
It's one thing if, across the board, people are only willing to pay X for an item, not X+Y. But random discounts don't track to the individual item: the option for "customer haggling" isn't traceable as a discount (there are types of discounts and those are recorded.)
When the store I was at cut payroll, they started with cutting the 40hr week people down to just under 40 (so they don't have to pay benefits.) Then they cut hours across the board, so there are fewer employees doing the work of their missing counterparts. So those people who really needed that low-pay job aren't getting their hours.
If the store is genuinely losing money because it's not able to sell enough product then that's one thing. But artificially driving down revenue through haggling is something different. Yes, people should be wise about their money. But they should also be mindful about how their choices impact on those around them.
The store owners would rather have the sale than not. But they're not going to lose their jobs when the store performs poorly: it'll be that worker who really needed that job that gets the pinch.
Posted by: anna | March 29, 2009 at 07:49 PM
I think those words are quite useful in attempting to get some better discounts. I especially use it when I've had to negotiate some outlier utility bills and with my cell phone plans to get some amazing perks.
Example:
Me: "I've been on hold for X minutes now, can I get a courtesy credit" etc.
Them: "How does $ sound?"
Me: "I appreciate that, but is that the best you can do?"
Them: "Let me check. Okay - how about $ + $"
And I do endorse the book as well. It's an easy read and while most of the material is obvious, it's presented in a refreshing manner.
Posted by: Ben E. | March 29, 2009 at 09:13 PM
The only problem is if everyone starts to ask for this it will no longer be effective. You need to figure out how to change your game up when negotiating.
For example the underlying principle in negotiation is that everyone is fair and reasonable- so is there a specific reason why they should do the best for you? If not, shouldn't you be in the same boat as every other consumer, which by the way is the underlying assumption behind fixed pricing... everyone pays the same price because all customers are equal. Stores also use differential pricing to try and get people who would pay more, do pay more. Often by nicer packaging or small product features that aren't worth the value.
Other negotiation techniques are changing the quantity and see the effect on price as well as changing the time shape of money (pay now or pay over installments), discount for cash, discount for last years model, discount for a floor model, discount for an unpopular color. Or you can always ask if there any upcoming promotions or sales. Generally the more research you do the better off you are but eventually you hit the laws of diminishing returns. Even if you are not working, your time does have some value.
-Mike
Posted by: Mike Hunt | March 30, 2009 at 12:59 AM
I'm lousy at bargaining so that phrase will come in handy!
Posted by: TStrump | March 31, 2009 at 12:25 AM
Nice article! I think this 'seven' magic words could make any company to offer 'better' products to the consumers!
Posted by: Steve | March 31, 2009 at 05:31 AM
I'll try it. LOL
It works in hotels sometimes and def. with customer service online or on the telephone.
Will link to this in my blog!
Posted by: Fabulously Broke | March 31, 2009 at 12:59 PM
I always love reading about negotiating tactics. I'm not sure how well this would work at a Target but will remember the next time I call T-Mobile.
Posted by: Anny | April 03, 2009 at 05:13 PM