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Is it ethical to haggle with your customers?
By Lauren | October 5, 2009
This month, I’m honored to be quoted in an Entrepreneur magazine article titled, “Is This the Best You Can Do?” It’s all about that ancient, time-honored sport, haggling. Particularly in this economy, people are working harder and harder to get better deals. But from a business owner’s perspective, is there anything unethical about haggling?
Well, maybe.
If you set your prices artificially high to allow for hagglers to argue their way into discounts, you’re disadvantaging your customers who are too polite, proud or timid to haggle. That creates an unequal playing field that can give rise to claims of illegal discrimination on the basis of race, gender, or what have you. It also suggests that your prices may be a bit shady to begin with, representing what you think you can get rather than an honest markup (including a reasonable profit) that reflects your real costs of doing business. Big profit margins aren’t illegal but they may be distasteful, especially if customers who pay your highest prices find out after the fact that other people got better deals. And, if you’re going to offer discounts, make sure that the law and your contracts permit you to do so.
There’s another, less obvious ethical risk associated with haggling when it comes to the price of services. Whether you’re a hairdresser, an accountant, or a management consultant, you set your fees based on what you think your work is worth. If you let customers haggle you down below your comfort level, you may come to resent having to give full service for a reduced fee. You’ll be tempted to slack off, and your work may suffer. At that point, you run a real risk of offending your customer with the second-rate quality of your services.
One of my mentors was fond of pointing out that the quality of your work, or lack thereof, endures long after everyone has forgotten how quickly or cheaply you produced it. Haggle away if you want to - just don’t let the quality of your products and services suffer in the process.
To read the Entrepreneur article, go to http://www.entrepreneur.com/magazine/entrepreneur/2009/october/203338.html
Topics: Business Ethics, Legal Ethics, Professional Ethics, customer relations |
October 12th, 2009 at 5:04 pm
Lauren, congratulations on Entrepreneur Magazine. Big accomplishment!
I agree with you on the ramifications of haggling if you are the actual service provider. However,there is a very positive corollary - If you are a manager simply in charge of negotiation, and dispatch your constituents to do the job, then they will not know the end price. You get to give your customer a great price, and still provide great customer service!
October 14th, 2009 at 8:51 pm
Hi Sam,
Welcome to my blog, and thanks for the kind wishes. You’ve come up with a great way to give a great price with great service. Thanks for writing in.
Lauren