During the past few weeks I have been traveling around Turkey at virtually at every stop I go to there is always someone trying to sell me something. If you’ve been to Europe you probably know what I’m talking about. The prices are of course negotiable and you can most likely bring something down from $500 to around $200-$300 or something down from $3 to $2, either way there is negotiating going on.
It’s interesting to see how the negotiation process takes place and I’ve noticed a very unique process for how shop owners negotiate:
Identify the Customer
Not every person that enters a shop can be a customer, some are just trying to kill time while others are actually looking to make a purchase. The shop owner needs to be able to distinguish between prospective customers and window shoppers. Once the customer is identified the next step begins.
Make Friends With the Customer
Once the shop owner identifies the prospective customer the next step is to make friends with the customer. This usually means the shop owner will ask the prospective customer where they are from, what languages they speak, how long they are visiting, etc. This breaks the barrier of a simple owner/customer relationship and allows for negotiations to take place on more personal grounds, which is exactly where the shopkeeper wants the customer because then it’s harder to say “no.”
Take Sides With the Customer
What’s the shopkeeper asks you a few questions to get to know you a bit, they usually take the same side as you. For example, if you say you speak Russian, the shop owner will say something like, “oh really? I speak a little bit of Russian,” or “I visited Russia and loved it.” The point of this is to make the customer feel like the shop owner understands the customer and where they are coming from.
First Stage of Negotiation
During this phase the shop owner tests the customer. If the customer sees something that they like but want the price lowered, then the shop owner makes a few adjustments and lowers the price by maybe 5-10% to see what the reaction of the customer is. If the customer agrees, then great, if not, then second stage of negotiation comes next.
Second Stage of Negotiation
If the customer still feels the price is too high then the shop owner proceeds to talk about how “special” the product is and how no others exist like it anywhere else in the world. Then just to make things a little bit more appealing the price drops another 5-10% Once again if the customer agrees then great, if not, then the third stage of negotiation comes next.
Third Stage of Negotiation
If the customer still says no then the shop owner walks away for a few seconds, takes out a calculator (or calls the boss) and then comes back with another final price. (Or the shop owner asks, “what’s the maximum you are willing to pay?”) At this point the customer begins to approach the “true value” of the product and now the negotiations get really interesting. Most customers usually don’t make it this far, meaning they just buy the product at either the first or second stage. If the customer buys at the third stage, then it’s still a good deal BUT, if the customer still says “no” then we move onto the final stage.
The Final Stage of Negotiation
At this point the customer says “no thank you” and quietly approaches the exit of the shop, this is actually a very powerful negotiation tactic. The shop owner now realizes that he/she has one last opportunity to make the sell and usually drops the price one final time to make the sale. Most of the time the shop owner actually walks out of the store to get the customer to tell them the good news. At this point the customer either buys or leaves without making a purchase.
I was fascinated to see these negotiations take place, and I actually like to debate/negotiate with people so I had quite a lot of fun doing this. It’s interesting how we don’t have any type of negotiations in the United States (well ok, that’s an over exaggeration), it’s either a “buy” or “leave” attitude and it makes me wonder if this approach really benefits the customer of the shop owner. Of course we are a lot of more corporate, we have franchises, red tape, etc.
What do you think would happen if negotiations became more common and wide spread? What can you learn from the how Turks negotiate?
thanks for reading
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