Be Reasonably Unreasonable
Being reasonable doesn’t work“And how will you be paying today?” the pizza cashier asked me. I hesitated before I answered. I was being asked to pay full price, even though the store caused a 30 minute delay by burning my original order. I didn’t exactly have time to spare because I was entertaining guests from out of the country.
I knew that asking would get me help, so I calmly pleaded, “I’ll be paying on credit. But look, you really caused me an inconvenience as I’m entertaining guests. What kind of discount can you give me?”
Without hesitating, the cashier offered a 30 percent discount and an apology about how he was having a bad day. I felt happy at the discount and sympathetic to his cause, so I took the discount and went on my way.
After the night ended, I felt less happy about my outcome. Shouldn’t I have gotten more? I wasted valuable time with friends I rarely see, and it was completely the store’s fault.
But I didn’t know what to do instead since I considered the alternative of shouting to be even worse.
Being unreasonable, well, that doesn’t work either
I only once shouted to get a discount. It was at a movie theater ten years ago. I had received horrible service, and I felt that I deserved a free ticket.
I made a fuss with an old and kind man. He explained the circumstances and asked me to be reasonable. But I persisted.
Ultimately, a manager came over and, upon discovering the feud was over $7, gave me a full refund. But it was a Pyrrhic victory of sorts.
While I got what I wanted, but I felt oddly guilty about causing a ruckus; I wanted to be a positive force on other people. From that day forward, I decided it wasn’t worth it to be the angry customer.
Success in the middle: being “reasonably unreasonable” works
Once, my friend found a small hair strand in his pizza. He called up the store and requested a full cash refund.
He was offered various other discounts, but he persisted. He never raised his voice, but he also showed that he wasn’t going to back off. He told me he had a legitimate claim and he was going to be heard.
Ultimately, he won his argument over the phone. The store even sent a delivery person out to give him the money. Now that’s service.
How did my friend succeed? What are the strategic elements of this game?
What my friend did
There are many game theoretic elements to negotiating a discount. A basic step is realizing that both sides have ranges of acceptable discounts. A customer might accept a discount greater than 25 percent whereas a store might be willing to provide a discount lesser than 50 percent. Savvy customers understand how to achieve the maximum discount, even when offered lower ones, as I’ll illustrate below in several examples.
To get the most, it’s important to establish yourself as a high value customer. For service based industries like stores, restaurants, cable providers, and the like, high value customers are:
(1) Repeated customers
(2) Connected to other customers and give referrals
(3) A threat to leave to a competitor
These three simple factors go a long way in explaining why some strategies work and others don’t.
Why does being reasonable fail? It’s because reasonable customers are too loyal and can be satisfied at lower discounts.
Why does being unreasonable fail? It’s because unreasonable customers are likely to leave anyway, so there is not much point in keeping them happy.
And that is why being reasonably unreasonable is the key to dealing with any service industry. You want to establish you’re a valuable, repeat customer that is a threat to leave or a threat to tell friends.
Below, I discuss some examples about how you can do this.
How can I be reasonably unreasonable?
When dealing with bad service, one of the easiest ways to be reasonably unreasonable is to explain you are a frequent customer and that you would like a full cash refund. Cash, unlike in-store discounts, can be used at competitors.
This small request quickly gets the attention of managers who scramble to keep you happy. You may end up accepting an in-store discount, but it will likely be much larger because you started asking for cash.
In a restaurant
Everyone has bad experiences in restaurants–it is the nature of the game.
How might you get better service? There is a great technique written on essortment:
Bad service: Try and show (even if you have to pretend!) some empathy and understanding when you’re being ignored or neglected – especially if the restaurant is full. For example:
“It looks like you’re really busy, and I hate to bother you, but could I please have the coffee that I ordered?”
Chances are, the waiter/waitress will feel so bad about having neglected you, or forgotten your order, you’ll either get the coffee on the house, or get perfect service for the rest of your time in the restaurant.
If the bad service continues (having to complain more than once is once too many), call the manager/supervisor and again, politely tell him/her what the problem is.
I’ve had friends get use this method with success. The only time my friend had to talk to a manager he asked for a cash refund and ended up with a $50 gift certificate.
With a cable company
He did this by finding a lower rate from a competitor and then directly calling up the cancellation line for his company. He never had an intention of leaving, but he wanted to show he was a threat to leave. When negotiating, he kept firm:
The representative to whom I spoke tried to convince me that the competitor’s service was inferior and that they could reduce my price by downgrading me to a lower-tiered product. I politely affirmed that I was satisfied with the competitor’s offering and didn’t want something of lower quality. Remember: this person’s job was to satisfy me, but actually giving me a better deal was a last resort. By indicating that nothing but a price reduction would do the trick, that’s exactly what I got.
It’s worth noting that Stephen had to persist against lower offers until he got the discount he wanted. But, by being unreasonably reasonable, he was able to get the maximum the company would give him.
With a cell phone company
You can hear a complete negotiation recording with Sprint from John P. at One Man’s Blog. I listened to parts of his lengthy call and was impressed at his slow, measured, pace of being reasonably unreasonable.
Some of the main highlights are he:
- directly called up cancellation service to show he was a threat
- used a very slow talking style and kept repeating his demands
- fended off multiple smaller offers from the representative
Persistence is important. As John P. explains the company’s negotiating strategy,
Although he had several options available, he did not reveal them until I restated what I heard him say, sought his agreement, and then asked additional questions.
Just like the cable example, it’s important to keep at it until you get the company to the maximum discount.
How can I avoid being too reasonable?
If you’re too reasonable, then you show you’re not going to talk about bad experiences or leave for a competitor. You’ll get low discounts like the one I experienced at the pizza parlor.
Here are some questions that tip off that you are too reasonable:
–“What discount can you offer?” –too open ended
–“What can you do for me next time?” –indicates too much loyalty
–“What can I do differently?” –too weak
I find myself asking these questions and then I regret giving up my negotiating leverage.
How can I avoid being too unreasonable?
The other extreme is being too unreasonable. You run the risk of the company not wanting you.
You might win one or two battles, but you might have to switch to another company, and you’ve burned a bridge if you want to return.
Here are some things that usually make you look too unreasonable:
–“Do you even know what you’re doing? I could run your business better”
–Raising your voice
–Disturbing store merchandise
–Interrupting the other side
Respect and loyalty are paramount to great outcomes. This brings me to a related point.
Why can’t I just always ask for a full refund?
It’s fine to ask for a full refund if you merit it.
But don’t get carried away and think it’s important to start big or “low-ball” the other side so there is negotiating room in every situation. It might make you look unreasonable.
The truth is that the negotiating game is repeated over and over many times. Businesses observe how hundreds and thousands of customers respond, so they have a good idea about reasonable demands.
If you keep asking for large discounts that are unwarranted, you are unlikely to be taken seriously. If you become too much of a hassle, a company might decide it’s better to let you go. This is the idea of “firing bad customers.”
This could mean service gets reduced or stopped entirely, like:
- getting blacklisted at a rental company
- getting slower service (“throttling” at Netflix)
- getting fewer loyal customer discounts in the mail
Stick to the middle of being reasonably unreasonable and you can get the big discounts without facing bad service in the future.
Written by Presh Talwalkar