What makes people so cheap?

[Chuck Wintle]

Here is my own story,

I had a customer come in the store and the first thing he asked is why he should buy here (only independent left standing in a city of 300K) instead of the BORG. I told him because our prices are the same or less, we service what we sell and we know what we are talking about.

He came in to buy an impact and a circular saw. I spent over an hour with this guy showing him the various brands we sell and allowing him to test various impacts and drills. He had asked about a Makita accessory kit ($50) and I told him it was free with any Makita purchase over $500. He ended up buying an LXT401 minus the 'cip saw and the flashlight (hammer drill and circular saw in kit bag). The price was really cheap. I had credited back the two tools he didn't want at full pop.

I was out at a school yesterday looking at guarding issues. When I got back, I noticed there was a returned Makita kit. Turns out he returned it saying he found it at a lower price at the BORG. I asked today if the free accessory kit came back, and it turns out it didn't. I don't blame the staff member, I had commented to everyone that it was the hardest sale I had had in a long time and the staff member figured out this guy was him and was in a hurry to attend buying customers.

There is no chance he found it at a lower price. He found something of a similar description and assumed it was the same.

How would you deal with customers like this?

David, Tool store Manager.

That's what makes retail such a cut throat business. The customer profited from your expertise but rewarded a the BORG with the sale. Happens all the time from my understanding.

[Brent Leonard]

Alot of talk about using the "specialty shop" knowledge and turning around and buying from the discount outlet.......

Makes me think of my own practice in my "other" love, fishing.
I have travelled all over North America, the Carribean and the Pacific, fishing. Anywhere I go, I love to find to local bait/tackle shop and talk about the local techniques and conditions with the owner/staff. Some guys are rude and arrogant, most are not. When I find someone who will give me tips and such, I will ALWAYS buy a number of lures and such from him. Typically I don't need the equipment, but in my mind I'm doing the right thing by giving him business for his help.

Perhaps those clerks that are rude, have simply given out information before, then the "customer" walks out without buying anything. I've personally seen it a number of times. That's what is rude.

[Stephen Musial]

Probably just some poor schmuck who wanted to build a super-strong mailbox...

[Eric Larsen]

I have no issues with shopping around for price. I do have a problem with someone devaluing my service and expecting their service to maintain $130 per hour levels.

We can value our time at whatever we want. But the only thing that really matters is how much our customers/employers/clients are willing to pay for our time.

[paul cottingham]

I ran a computer and network support company. We ran into this all the time. People would ask for a cabling or hardware quote, then use the quote to shop around for a cheaper vendor. The best part of that is when the cheaper vendor couldn't adequately deliver, we would get a call back, and the customer would try to haggle over what we would charge to make it right.

For the record, I always shop locally, even if it costs me extra, unless the product is something i can't get locally.

[Stephen Musial]

This is the sign at a local welding shop:

Hourly Rate: 90.00
Hourly Rate If You Watch: 100.00
Hourly Rate if You Help 125.00
Hourly Rate If You Tried To Do It Yourself First: 150.00

[paul cottingham]

We used to joke that if your teenager "who know a lot about computers" had already tried to fix it, our rate doubled.

We weren't really kidding.

[Jim Becker]

David, if the customer didn't return everything he got, then he shouldn't get the full refund, even if you have to pursue that via the credit card company. (assuming that's how it was paid for) Fair is fair.

[Cliff Rohrabacher]

The old axiom about wealthy people being tight wads (or knowing the value of a dollar) is entirely true.

No one I know who made themselves wealthy is going to pass up an opportunity to save a few bucks.

As I recall a popular US president donated a few pairs of his used underwear to a charity and wrote off more than a hundred grand in taxes.
I guess they were boxers.

If I tried that I'd get audited before I mailed in the tax exemption form

But a popular president known far and wide for his exceptional behavior claiming his used underwear was worth hundreds of thousands didn't raise an eyebrow at the IRS.

The point being that the guy was already wealthy and didn't need the dough. But, he was not so foolish that he would pass up an opportunity to save a few bucks on his taxes. Even if it does look pretty bad.

[Orion Henderson]

Very interesting thread. We all seek value. Those whose working lives are separated from the profit and losses of the business world tend to-not all of course-forget that somewhere someone has to make a profit for everyone to make a living. This is not just picking on people who are gov't workers, teachers, etc, but many cubicle dwellers have long since forgotten, or never really knew, that at some level their company has to turn a profit to survive and ultimately pay them. the Makita drill bit bag-that is just stealing. People return incomplete orders or damaged goods to me with some regularity. It just doesn't matter to them. Fortunately they mail them in so we can give partial credit if appropriate. Many of my competitors simply send the items back to them. I have never done that in the interest of PR and future business, but it is tempting sometimes.

As far as labor rates and how much you charge it varies. I charge $60/hour for shop labor-including materials. I charge a bit more for blacksmith labor. That is how we determine our pricing on items made here. I pay more to my accountant for her labor than I charge for our time. But that is the rate. She has minimal overhead but high skill. Skill, competition, and overhead all determine the labor rate-whether it be the Quik-E-Mart clerk or a doctor. For printing as the example I use a combination of local, internet, and far away printers (Canada) depending on what I need and what quality I need. I suppose it is not fair to my local catalog printer that I went to Canada. But would it be fair to me or my employees to spend an extra 20K on the catalog to print locally? My employees who want, and deserve, raises wouldn't think so. My customers who ultimately pay for my catalog surely don't think so. I found value. Simple as that.

[Adam Cavaliere]

We all want Nordstrom service and Wal-Mart prices; we are doing ourselves in. For an equal product or quality of service it only makes sense to get the best value. What I find disturbing is folks who get upset when their $10 internet printing job doesn't equal a $50 local job ;-)

Very well put!

[Leo Graywacz]

Sometimes cheap people really don't have the money.....and then there are people who are truly just plain old cheap. The old axiom is true...You get what you pay for. And for these people it usually bites them in the wallet down the line.

[Jim Rimmer]

Probably just some poor schmuck who wanted to build a super-strong mailbox...

[Pat Germain]

One positive trend I've noticed from our current economic situation is an improvement in customer service. A couple of years ago, almost every person I dealt with at a retail store or restaurant was a well-meaning, but completely clueless, high school kid.

Being empty nesters, Mrs. Pat and I eat out regularly. I began to notice the service was getting better and better at the restaurants we frequented. Then I realized the staff were no longer high school kids. They were mature and experienced. Sadly, I assume many of them lost their previous jobs or had to go back to work to keep their families going. But it sure is nice to deal with people who know what they're doing! And yes, I'm a very good tipper.

You're always going to run into tight-wad clowns who will go to extreme measures to save a dime. I think we should just ignore them. There are still a lot of people in this world who appreciate good service and will pay for it. We should work on building relationships with those people and focus on them. It's interesting that service providers in very niche markets often take customers only by referral. They don't want to deal with those tight-wad clowns. Good for them!

My insurance agent is a friend of mine. We were friends before he became an insurance agent. When he started his business, he asked me if he could give me a quote for covering my home and vehicles. I told him he certainly could. I was happy to help my friend. And, by golly, it turned out he could save me some money to boot. I'm now his longest-served customer. I could probably save a few dollars here and there by switching to another company. But my friend provides me service no other insurer could. And that's priceless.

Our culture has devolved into worshipping the "good deal". If I have a good relationship with a quality service provider, some clown will come along and say, "You idiot, I paid less than you did!". If his only objective in life is to save a few dimes, his life will be less abundant than mine. I think I'm still coming out ahead even if I pay a little extra for good service. Maybe more people will start to realize this as our economy, and our lives, slow down a bit.

[John Schreiber]

. . .Am I wrong, or is that extremely arrogant? Would you be offended if someone told you that they saved 75% over your cost by going to the internet, and then handed you a bill for $130 per hour?

Just curious and opening up a discussion while a job is running (bored).

I see three factors here. First, I'm willing to spend a bit more to support local businesses which provide good customer services and just for the pleasure of associating with quality people. But, I'm not willing to pay 400% more (the other side of 75% off).

Second, if this guy is charging $130/hour and he's getting business, he is charging what the market will bear. If he's making a killing, other people are going to enter the business and if they can charge less, that will drive the prices down. If the guy charging $70 for his printing services is not providing a better service and better quality than somebody charging $17.50, then he's not going to be in business long.

Third, both the local printer and the Internet printer are businesses trying to make a buck. I'll bet the Internet printer is using more expensive equipment and different techniques and higher volume so that they can make a profit selling at 75% less.

I'm not a 100% free market guy, but I see this as a place where the free market is exactly what is needed to make the world better. I couldn't be angry at the guy.