One thing that I've always wanted to try, and currently suck at, is haggling. I'm the type of person who has to take home a souvenir, and every time I pass a souvenir shop I can't help but ogle at all the odds and ends and little woodcarvings I've seen a million times already. They just don't get old. When I worked at Porsche customers would haggle with the salesmen all the time, and you could tell it got old. In the US, the price on the sticker is what you pay, however in the car business, haggling is excepted, although not always appreciated. I would even have customers try to haggle with me about service! But in Siem Reap, it's fun being on the other side of the coin.
Now traditionally, Cambodians (and really anyone in a developing/tourist region) have been known to inflate prices for foreigners. Sometimes as much as four times what a local would pay. I have read that customer service does not exist in Cambodia, as shopkeepers would rather squeeze as much dough as possible out of a naive tourist once, than retain a satisfied customer. A well known fact in business is that it's cheaper to keep an existing customer than it is to acquire a new one. So why don't more business owners follow this advice? Maybe it's greed, maybe it's the fact the likelihood of seeing that person again are slim to none. Most people in developing countries just assume all Americans are rich.
I walked into a souvenir shop today after giving some English lessons at Joe to Go, and I stumbled into a store just around the corner. I walked in and perused the merchandise, all the same stuff I had seen before. As I got halfway into the store, the sensation someone was following me took over and sure enough, someone was following me. Taking note of my reactions to each item. I eventually came across the perfect gift for my little brother, with a hefty price tag of $56.
With my falconer on my six, I made sure to clearly express my disgust. Hiding my true thoughts of "I gotta have this." The inevitable negotiation was about to start, and I thought of my thesis and the concept of anchoring, a famous heuristic which causes the human mind to fixate on the first piece of information presented in a given situation. Anchoring has particular relevance in negotiating, as the first number exerts an incredible amount of influence on the outcome. Anchoring is just evidence that everything is relative. EVERYTHING. We can't judge something unless we have something to compare it to. For example, this post will seem much shorter if I enter down a bunch of times at the end, as you will see all the white space and make the connection that there is room leftover.
I shot first with an offer of $15 in an attempt to "re-anchor" the negotiation to a price more in my favor. The woman looked at me as if I had ten heads, and that seemed to be that. I put the item down and proceeded to look around some more. She approached me again and lowered her price to $35. I came up to $20. I started walking out the door, explaining I could find the same thing in another shop a stone's throw away, and she lowered once more to $30. I tried to stick to my guns, but came up to $25. She backed down to $28, and I struck the deal.
Even though I still probably overpaid significantly for the item, I felt good about getting 51% off, but I realize this is just anchoring in effect. Seeing an item for $56 and then paying $28 for it makes the transaction feel like a deal, and it's the same mechanism at work when you buy something off Amazon or in the store that has a "***WAS*** [insert dollar amount]" sticker. Regardless, I am happy with my little brother's gift and I look forward to practicing my haggling skills more. Maybe one day I'll be as good a negotiator as Trump, the stupidity of whom the world has never seen before.
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