Culture and Negotiating Price
If you’ve ever lived in different countries or even different regions of the United States, you have learned that we do have real differences beyond personality. Our culture informs us of how to view life events. That’s especially true in commerce and the transaction of merchandise and services.
Examples of Cultural Issues in Pest Control Pricing
Here are a few examples of situations I’ve run across:
My technician tells me he gets really tired of certain nationalities that are always looking for bargains. He tells me, “The customer can take my price or leave it!”
This is a bad attitude informed by lack of exposure to other cultures and lack of understanding for the intent of the customer’s action. The technician gets his pride hurt when the prospect tells him that his price is too high, not understanding that in the eyes of the prospect he is taken for a fool if he doesn’t negotiate a lower price.
Actually, in most countries around the world, whether they operate on cash or a barter system, it is customary to negotiate down to the rock-bottom sale price. Americans abroad are warned not to take the market price as the final price. It is assumed that the true price is 50% off. Someone who doesn’t negotiate down is truly a sucker. You don’t want to inadvertently call your prospect a sucker, do you? You can say that the customer is in America and should behave like an American. But people don’t give up all their customs and habits overnight. It’s much harder than getting a southerner to speak without a drawl. Additionally, often these foreigners are in fact able to get a better price!
Americans Start to Negotiate Price
More recently, with the bad economy we’ve been having, more and more Americans are learning that everything is negotiable. Americans are learning from foreigners how to save. BTW, when was the last time you paid MSRP for a new vehicle?
So the next time you get a foreigner …. or a native born American negotiating, don’t insult their intelligence. Think about negotiating a bit to preserve your sale and their integrity.
Here’s another example of how I countered in negotiating with a wonderful customer from India:
The new customer offered several reasons why I should give her a better price:
1) I was referred by a great and long term customer with a great price.
2) I will be a great customer to you.
3) I am a senior citizen.
4) I live close by.
5) My house is a two story house and so there is less to spray.
To these arguments, I told her I had already applied discounts and countered the argument that a two story house was easier than a one story house.
Lastly, she told me that if she gave me a great discount that she would give me a Lord Ganesh, who is the godhead of luck and fortune in Hindu tradition – that I would certainly then prosper.
To this last argument, I had to explain that my cousin had married a women from the Hindu tradition and that I was given a Lord Ganesh, along with all the other family members, during the engagement celebration. At that point, the customer knew that she had negotiated as much as possible and gladly accepted the stated price, satisfied that she had done her best and was being serviced by a smart company that respected her tradition both in culture and in transacting the sale. “… surely Lord Ganesh will bring you good fortune!”
Take Home Lesson for Setting Prices
So consider your pricing in light of the negotiations you may be required to conduct. Determine a bottom line and create a spread that will help you keep a good profit without chasing away customers.
Hearts Consulting Group 
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Most people across the globe would generally ask for a discount not because they are unable to pay, but it has been kind of a tradition to always bargain. Some do it just for fun. However, stating reasons you cannot go beyond the least price in a respectable way is always a good way to make potential customers more willing to accept price. Besides, if you offer good quality services, they’ll never regret for paying the price in full.
We have noticed that certain cultures don’t mind the price, but want options to pay. For instance, we provide pest management Lancaster PA (http://www.dominionpestcontrol.com/2013/02/19/pest-management-lancaster-pa/), home to the Amish. You would think that they would want to pay us in cash. But not the case–they prefer to pay by check.
Having said that, it is our inner Lancaster city pest management customers that prefer to pay cash, I suspect, because they don’t have a checking account for one reason or another. Something that has never changed, is that our restaurants like to pay in cash too.
Getting back to the original question, for us, it is not a matter of price, just payment.
What you are saying about payment is very interesting to me.
The form of payment says a great deal about one’s economic situation. Those who use credit cards may have been short on cash during the credit crunch, but generally, they have always been considered people who are a good risk to credit card companies. These folks have extra cash and often want points. They get excited about the credit card awards that will provide “free benefits.” These people are your ideal candidates for add on services. The Amish, like many conservative religious groups, have a reputation for frugality and saving. This probably puts the Amish more into credit card mode.
I think I understand why restaurants operate on cash. Many of them hide earnings and although it seems foolish to not properly record expenses, they perhaps get in the habit of exchanging cash. It’s fast. They also may think it helps them to get bargain priced pest control to pay in cash. They are generally low lying fish.
My experience with cash customers is not good. Like you say, perhaps they pay with cash because they don’t have checking accounts. We have found this to be true. We have also found that they will pay cash to set up a discounted initial service. Then we go back to service on a maintenance basis. The customer is not home once or twice. The bill adds up. Lo and behold, they don’t have the cash to pay the bill and they are never available to make payment. Now, when we get cash payment from any customer, we see it as a red flag. We will take on the customer but we will be very cautious about extending maintenance service without on site payment and verification that they will be home.
What are you doing to insure that your cash customers continue to pay regularly?