Yesterday, I tried to buy fresh oranges from Jamba Juice. Not only the manager agreed to sell me for $0.25 each, he quickly consented to $0.20 after negotiation, and then gave them to me for free after failing to use my credit card due to a power outage. Other than again demonstrating great customer service, this episode also prompted me to ask two questions:
1. The manager set the initial price to be $0.25. Did he simply come up with a number or is it based on market value? What is the value for an orange at a grocery store?
2. I negotiated $0.05 (20%) off his asking price of $0.25. If I do that at a grocery store, will I be rejected?
To answer these questions, I tried to replicate my Jamba Juice experience at Target by asking Target employees for a discount on oranges.
The result wasn’t surprising – my negotiation session quickly became a rejection session. Trying to find out why, I came up with a few theories:
1. At Jamba Juice, neither the manager nor I knew market price of an orange. Without any benchmark, he priced it at $0.25 and settled at $0.20. We both came away happy.
2. My experiences of working at Dell told me that Target, on the other hand, prices products based on either cost, profit margin or competitive analysis. The price of an orange came out at $0.69, almost three times that of Jamba Juice.
3. There is usually less negotiation room at places that are: a. specialized in selling the particular product b. not known for allowing negotiation. That’s why I hit open arms at Jamba Juice and a wall at Target. I wonder what would have happened had I tried to negotiate smoothie prices at Jamba Juice.
4. On a personal level, Jessica and Daniel from Jamba Juice laughed at my jokes, while Lakeisha and Joel from Target didn’t… Maybe I simply weren’t as funny, or they perceived my jokes differently. Either way, my humor had different effects on two sets of employees.
Learning: Rejection could happen for a myriad of reasons. Just because one place or one person says no to a request, it doesn’t permanently invalidate the request or the requestor. Sometimes, we simply need to try somewhere else, or ask a different person. We might, and probably will, get very different answers.