How to handle a situation?

I have a question regarding a situation that came up today at the store and I’m looking for some feed-back and comments from you 'zerkers on how I approached the situation and how it was handled.

A gentleman and his wife come in the store to buy some wine and booze, I help him make a few selections and he’s ready to cash out. While checking out at the register he makes the following remark:

“… I never pay full retail for my purchases anywhere, give me 15% off”.

This person comes in occasionally, once every several months, in fact the last time he came in was New Years Eve and told us the same line - Give me 15% off. Well, it’s now May, 4 full months later and he’s back. His purchases New Years and today total about $500, $250 each time roughly. Not a huge spender comparatively speaking, but he’s a customer none-the-less and I want him to come back.

Side note:
A few of the people that he does business with and some of his friends come in once or twice every two months and drop thousands of dollars in wine, cognac, and spirits and we give them 15% every single time. I figure this is a way that we keep our customers happy and keeps them coming back. In some cases I’d rather move larger volumes with less margin, than less volume at a higher margin. I mean hell, is that not what we all do with case discounts in the first place?

Bottom line:
I stand firm on 10% and tell him that next time he comes in that I’d be more than happy to give him 15%. I politely add that it would be nice to see him more often, and that frequent and repeat visits would definitely warrant a 15% discount.

Did I handle this appropriately? Should I have done something different? Did I get pushed around too much? Did I not give enough slack? Comments and pointers please. Thanks y’all.

You likely lost him as a repeat customer and the business of all his friends/business acquaintances. Discounts roam in packs, like dogs. What one dog gets, so does the pack, or they’ll hunt elsewhere.

Usually how I handle this type of ‘situation’ is my foot in your ass on the way out the door. [snort.gif]

I disagree with Peter. This person is the one who likes to be treated ‘special.’ Of course, this person has no idea about what the prices ‘should’ be, they just want a bigger discount. If he spends less than all of his friends he is likely a small fish and won’t necessarily pull all his friends’ business away. At the end of the day it’s really just about whether or not that extra 5% is really worth the headache with this guy. Everybody’s money is the same color. But you are a person with pride and dignity. If the guy is going to run you through the muck every time, I’d politely tell him to take his business elsewhere. It’s the guys who can talk you into giving them that extra 5% and make you love them forever while doing it who really deserve it…

First of all he’s just fishing. In the last year or two I’ve seen a number of folks just walk in the door and ask about what kind of steep discount they can get before they’ve even shopped yet. It’s just the times.

I’m always sure to have a policy in place like “15% on a case of wine, 10% on six” or whatever. Just smile and tell him politely how it works there.

We have a few customers like that. There’s one that is always looking for the least expensive wine or sale wine and wants a discount too, then pulls out his platinum Am Ex, plus he’s the cologne king on top of it. Yeah sure !

Each situation can be different and you have to feel your way through with these kinds customers, bottom line is customers all want the best deal they can get. Some you may feel are worthy of a discount because of the relationship you build with them and others you may want to tell them to go fly a kite.

If we have a customer that is an infrequent shopper I’ve said, the profit margin on this doesn’t leave us room for discount or we can’t do anymore than XYZ % off, or sorry these are here on consignment and the price is set, or I bought at auction and paid more for them. There are always some people it’s impossible to please no matter what you do.

My hubby would tell you I insult them with a smile, make them laugh and then they buy whatever. [scratch.gif]

Make a policy of some sort and stick to it.

15% off of purchases over X

$100 gift certificate for every $1000 accumulated purchases. Whatever.

The customers, you, and (if any) employees deserve to know what to expect. Ultimately it will be impossible to be fair if you are arbitrary with your discounts.

Call it what you will, but every customer IS special in my store. It is totally worth a measly 5% to make this customer happy knowing his friends and business associates are going to hear about your service from this guy. You tell him to go elsewhere and you’re basically telling his friends to leave too. And their friends who might have been referred to you later. It blows my mind that any retailer doesn’t have room in their bottom-line for the occasional, additional discount on a $500 customer. The goodwill gained far outweighs the $25 expense.
I suppose this is why my store is absolutely killing the competition around here with sales and service.

Do you think that this guy is gonna be loyal to you because you gave him the 15% off in front of his wife/gf? I doubt it. From you description, he’s not really a regular and he probably does the same thing at your competitors just as often.

I like the idea of setting up a regular wine club type of thing. x discount for your vips who bought $2500 last year or the free g/c for every $1000.

Maybe I’m not a good person to listen to, because I think folks that expect to be treated differently are pricks.

The problem I’ve had with the “Treat every case differently” based on however generous you feel at the moment is that you can never keep track of all of these specials offers unless:
– you are a really small operation and you do all the sales yourself
– you’re tracking every customer and their purchases in you point-of-sale

Because ppl will expect to get that discount next time. Or they’ll expect you to give it to their cousin. Or they’ll come back and say, “Well, you gave me 20% last time” when you know you didn’t. And once the economy picks up and wine sales do you won’t need to keep doing this.

Maybe I’m just too anal but I’d rather have more control otherwise you’re risking pissing customers off and not even knowing it until it’s too late. Instead, if you are telling them “no” to their special request for a discount today you just have to worry about how you present your answer. And if you have a discount policy in place this is pretty easy to do.

Another option is to maybe have a coupon at the register for their next visit. This may prevent them from being as upset and it’s only a one-time thing then. (As long as they don’t ask for another coupon the next time, but at least you have them coming back again). Be sure the coupon has an expiration date & some color to it so it won’t be duplicated. I used business card forms with our logo.

What Bob says is certainly the truth. Although it may be difficult to keep track of your discounting policy, it really is the only way to ensure equal use of it and to guard against it biting you in the but if you don’t.

Personally I think you handled the situation well under the circumstances, inasmuch as you seemed to be applying a frequency/volume rule to his purchase and DID give him a discount. How the 5% discrepancy went down with the customer is something you would be in the best position to tell. Unless he’s a real jerk, it’s hard to see where he’d badmouth you to the extent of really alienating other customers.

As to the comment that the extra 5% shouldn’t be a big deal to you… maybe it shouldn’t, but I see the issue in terms of a decision as to whether or not you just give 15% across the board on every $500+ sale… period. 5% is 5%. You’re the one who should decide your policy, not your customers. In this type of market it’s likely you’ll do more business at bigger discounts, but you have to make a profit too… unless you know something the rest of us don’t.

On one point it may be that I’m coming from a Massachusetts-only point of view: “coupons” and other “inducements” for alcohol are illegal here.

I find it incredibly difficult to believe that any serious wine shop doesn’t have $25 to spare on a customer with connections to other, regular, high-rolling customers (based on the original scenario). How much do you spend on an advert in the local paper? A few thousand bucks to ~maybe~ convince someone to shop your store? In comparison, 5% on a $500 sale seems like damn cheap advertising to me. Word of mouth is more powerful than a newspaper ad because you “pay” once and it keeps on giving. An ad runs and goes into the recycling a day later.

Do your shops have no nearby competition or something?
Around here, if you fail your customer, chances are they’ll go somewhere else. Don’t you read the myriad threads on wine BBs about poor customer service causing wine peeps to “never shop there again” simply on principle? I’ll take that 1 customer per day with an extra 5% discount over your now 0 customers getting the regular discount. Just send that guy my way, I’ll take his (was your) money any day of the week!
More money for me, less for you; more volume in sales for me, less for you; more buying power for me, less for you; I’ll have better prices and wines, you’ll lose more customers; I grow, you close. Simple economics, really.

Next you’re going to tell me that you have the exact same margins on every item in the shop; that you don’t have “blind” items that are a little fat, so you can run “thin” on another item or give that measly $25 discount. Jeez… If I keep giving business advice here, I’ll need to charge a fee.

Again, this is why my shop is absolutely cleaning up against the competition around here.

I’m not a wine retailer but I think the OP handled the situation correctly. My bet is he will not lose the customer, or his contacts and would not have got anything more by giving 15%. I suppose he could have tried to get him to buy some more, higher margin, wines to qualify for the 15%.

It depends whether you want to run your business by service and product selection or on perceived discount. The problem with the discounting route is that you attract discount hunters and if another store (or supermarket) opens up around the corner with bigger perceived discounts, you are really at risk of losing those customers or having to discount further. It also forces you to buy cheaper wines and start with higher margins. I’m not convinced by Peter’s argument, unless he plans to open discount wine stores throughout his state.

There is also the personal pride aspect. If you believe your prices are reasonable based on the quality of service and prodcut, it’s quite insulting for the customer to ask for a discount in the way this one did. I have similar dilemmas in a different way. I have professional wine buyers who start asking for a discount on the trade prices before they have even tasted the wine. They demand a high volume discount even though they “will start off just taking a pallet”. My feeling is that if you start off down that route soon you will have no profit margin to play with.

FWIW, I get folks dropping the “I’m a big customer line all the time” and they truly believe in their own mind that they are which is totally fine. Problem is that’s a tough line to throw down when I have customers spend in one purchase what this guy spends in a year. I NEVER say that, and I always try to carefully explain how our business works. I often try to sell them on things that we have an expired promo on and just retro-activate the price, and it almost always makes them happy. I rarely run in to a situation where some one says “that’s not good enough, I want 20% off everything.” In those cases, I’ve lost no matter what I say, but I’m not about to break the law and start selling stuff below cost. It’s all about how nice you are. The more friendly you are, the more they come back.

I will always tell everyone the same thing. It’s not how big of a customer YOU are, it’s the constant word-of-mouth you spread and how much business you send me.

Most retail software has programs that allow you to create customer accounts and help you (and them) keep track of what they buy. If you have a policy of $X that is required to get discount %Y, then you can tell him what it is, set him up in your system, and even extend him the courtesy of giving him the 15% on the sale at hand. Remind him that to maintain this special discount he has to make a certain amount of purchases per month or per year, otherwise he gets the same discounts as everyone else. Most people can understand the loyalty concept, but if he’s just trying to play the ‘I’m special because I’m me’ card, then you just have to decide if he’s worth the headache. I’ve had customers try to bully staff with other customers in the store because they weren’t being treated like a king for their purchase of $9 wines, and when we didn’t back down and the grumpy one storms out, the other customers have always seemed to react very positively.

As is clear from the responses above, the issue of “discounts” to a certain extent is governed by your state law. You need to know exactly what and how wines can be discounted.

Although I worked in wine retail a long time ago, most of my experience is from the consumer perspective. I would much rather have a store that has a set discount policy–e.g, 10% off of a case of wine, etc.–that applies to everyone. Particularly if it’s a larger store, with multiple sales staff, then you run the risk that different sales staff treat customers differently.

As a customer, I don’t typically haggle over wine prices–I either decide to buy or not to buy. I would never walk into anyone’s business and immediately inform them that I will demand 15% off the top–I think it’s insulting. There may be times where I’ll test the waters with the “is there any flexibility in the price of this bottle” question, especially if it’s a wine that is older and I’m interested in, but only at the right price. Asking the “flexibility” question allows me to probe for a discount, without demanding it. If there is flexibility, then they feel better for giving me a discount, and I feel better having it.

Bruce

Peter,

I don’t think anyone is saying that you did the wrong thing, but there have been some good points made that are worth giving a thought to.

First, I agree with others that your customer is a jerk. Doesn’t really matter, I know, but it does raise legitimate questions about the simple formula “discount = loyalty”. When he says he doesn’t pay retail anywhere, that says to me “I don’t give a shit about you, it’s only about me.” Not a good foundation for loyalty, IMO.

The other issue is the “slippery slope” you get on handing out discounts without boundaries. That’s margin out-the-door every time, without giving incentive to buy in volume, which is what keeps absolute dollars where you need them. Of course, I don’t know what your pricing model is, but you do have to consider whether pricing up to accommodate a 15% discount is making your frontline seem uncompetitively high, or whether you can afford to lose the 15% for those folks to whom you give it.

I certainly understand your thinking that giving him the requested, er, demanded, discount is building friendship and marketing position, but this is just a gamble, and will be hard to quantify. Again, not to say it’s bad or that you shouldn’t have done it, just that from now on, regardless of what he does for you (i.e. recommends you to friends, shops more or less frequently), he get’s 15% off every time. Maybe he tells people not to buy from you unless they get 15%, too. Who knows? But most importantly, telling him that more frequent visits would definitely warrant a deeper discount without specifying the terms sets up a high potential for resentment and conflict in the future.

As suggested above, I think the best thing is to set up a discount program, based on dollars spent, frequency, or something, so that you’re not giving out 15% on everything every time to everyone. Maybe your pricing supports that–Everything 15% Off Everyday!–and that may be a strategy that works…I dunno. But I do think that having a policy about discounts, whatever it is, will save you headache and help you manage the business more efficiently.

Ultimately, if your killin’ it, crushin’ the competition, and making the money you need to make, “keep on keepin’ on” with what you’ve been doing, I guess.

For some customers that we know will NOT shop with us unless we have a 15% off deal, or offer them some “special discount” we make them an offer - we’ll offer you 15% off a case but you have to buy a minimum of 1 case a month…

We’ve actually seen their business with us increase and they get a pretty good deal and we begin to get most of their business (instead of 1 case every 6 months)

Chaad, you have misidentified me as the original poster, mixing your answer to him with “answers” to my comments.

I don’t think I was clear in my first response that I was answering the original poster’s question with the given parameters. Every scenario is different; the original post gives the impression that this customer may not shop as much as his associates, but has influence over them.

This isn’t a discussion over discount policies. I have a standardized discount system in place. This was a question as to how a single situation was handled. My opinion was that, given the scenario of the original post, it was handled poorly.

Indeed I did! Sorry, and thanks for correcting me. Getting back on track, it seems you and I are in an agreement, then.

I can’t take this kind of crap attitude anymore that clients seem to have, it’s so foreign to me, that it’s hard for me to relate to. I work in tourism and this has started to run rampant.

When you walk into a store, it’s not a freaking outdoor market in Morocco, there are pricetags on things. How wacked out do you have to be to just walk up to someone who is clearly the owner of a small local store and tell them you “Never pay full price for anything.” Seriously? Do you think this guy does this in Macy’s? Think he gets away with it in Whole Foods? Why does the small businessman have to take the fall on this kind of joker?

Definitely helps to have a policy in place, so, like little babies, you can give them easy to understand parameters.