Everybody loves a bargain. I have seen very rich men purchase a used sports car for $70,000 when the going price was $90,000, then boast as though they had made a million in the stock market. People buy all sorts of things they never use because they are on sale. Rich or poor, we have a need to validate our self-esteem. Getting a bargain seems to satisfy the need to a surprising extent.
There are two points to recognize about bargains from a seller’s standpoint. The first is that a bargain is a state of mind. It may or may not have anything to do with the price the buyer paid or is being asked to pay. It is not the amount of money involved but the satisfaction the buyer receives or is likely to receive from the agreement. The second point about a bargain is that it makes sense to package your offer of goods, services and added values in such a way that the other party perceives it as a bargain. If the seller does not present the offering as a bargain, it won’t be perceived as such.
There is another type of bargain people are responsive to. Some years ago, I read an essay called, “The Value of Unchosen Alternatives.” The author claimed that human beings place a disproportionately high value on options and extras they are unlikely to use. They pay for the availability of services they will rarely if ever need, for accessories they will hardly ever use, for performance characteristics they are unlikely to require, for magazines they will barely read, and for warranties on breakdowns that will happen only in rare circumstances.
Recently, I saw a cartoon in a magazine which showed two New Yorkers in Central Park. One was holding a leash that led into the bushes; the other was a well dressed businessman. The man with the leash tells the businessman he has an elephant for sale at the bargain price of $1000. The businessman looks astonished and says, “What would I do with an elephant in New York City?”
The seller responds by offering the elephant for $600. The businessman replies by saying that the discussion is ridiculous because even if he had an elephant there is no place he can keep it.
At this point, the man with the leash offers the elephant for $400. The businessman, slightly interested, says, “What’s the point of talking. I don’t want an elephant.”
“All right,” says the man with the elephant, “I’ll make nothing on the sale, but I’ll give you two elephants for $600.”
At that point the businessman gets a big smile on his face and says, “Ah-now you’ve got a deal.”
Negotiators on the selling side who package their offers as bargains will get the attention of buyers and close more sales. Almost everybody is responsive to a bargain.