Most Canadians are uncomfortable bargaining for a discount price. We live in a country where the sticker price is the final price unless you're on a car lot or at a garage sale. However, I've spent enough time in Asia, Central America and Mexico to grow accustomed to dickering with vendors. I recognize the game for what it is and follow the generally accepted rules of fair play recognizing that the notion of 'value' is completely arbitrary. What I set as the value of a product may differ tremendously from what someone else, including the vendor, may determine value to be.
Last week I visited Mexico on a holiday with my family. As I witnessed my nine year old daughter shopping in Mexican markets during the trip, I found it revealing that haggling is a completely underdeveloped skill for us fair'n'friendly Canadians. Observing her stumble through the bargaining process was like watching her learn to walk all over again. She'd manage to take a few steps on her own, get overconfident, step into a pothole, fall, panic, and end up a little bruised and bewildered.
At one point she innocently misunderstood dollars for pesos during a bracelet purchase and ended up paying 7 times the price she reasonably should have. Before realizing her mistake, she was thrilled with her purchase, "Look Mom! He asked for 10 dollars and I offered seven but we settled on eight. Didn't I get a good deal?" I couldn't bear to tell her the truth. If I'd been beside her during the transaction, I could have corrected the mistake before money changed hands. She felt that she received true value until a second vendor walked by with the same bracelets announcing that his price was only 10 pesos. She looked up to me, "What? I just paid 8 dollars! That other guy ripped me off." I explained that the vendor didn't have any ill intentions and that it really was a game she was learning to play. I chalked it up to a 7 dollar lesson for my daughter, a lesson which may pay off later when she encounters much higher stakes in the future. But she couldn't let it go. We happened to cross paths with the first vendor later in the afternoon and as we walked by you could feel the heat of anger radiating from her towards the man who barely took notice of her. "I could have got 8 bracelets for the same price I paid him," she muttered under her breath as we cruised by.
And just like that, my girl felt the relativity of value. One moment she was thrilled with her purchase. The next moment she felt cheated. The price paid for the bracelet remained unchanged while the perception of value swung wildly across her nine-year-old spectrum of experience.
In business, it is important to keep in mind that value is perceived and flexible. It is up to business owners to accurately determine the unique values that their products or services bring to customers on various levels. The next step is to interpret what a customer is looking for and what pain they are trying to solve. Once you have this information, the final step is to suggest the specific value that will come as a benefit to the customer with their purchase.
You don't have to go to Mexico to understand the meaning of value. But I'm sure my daughter would suggest that if you do, you may want to save money by bringing your mommy along with you as a guide. Until next week, stay in the black and keep coming back.
