When I was a psychology student, I remember a discussion we had on neurosis — state versus trait neurosis. "Trait" neurotics go through life responding to most situations neurotically. "State" neurotics respond to the situation; they become anxious because of a specific situation versus responding to all situations neurotically. What a great backdrop to consider price shoppers.

Some price shoppers are "trait" price shoppers — it's how they go through life. They object to any price. You could give away your goods free and they would gripe about paying the freight. Let's face it: They're cheap! Maybe it's not politically correct to call people cheap these days, but who cares? Price shoppers don't care; they're proud of being cheap. Why would anything they do or say surprise you? Oscar Wilde described them when he said, "A cynic is someone who knows the price of everything and the value of nothing."

The "trait" price shopper is a short-term, acquisition-oriented thinker. All this person cares about is a cheap purchase price. Value, which is what they receive, means less to them than what they pay. They also do the front-back squeeze: They hammer you on the front end for a cheap price and then pay you late. If you want to identify your worst price shoppers, ask your accounts receivable people to tell you who pays the slowest. And the aggravation factor in dealing with price shoppers is higher. They nickel-and-dime you to death.

The most important questions to ask yourself are: "Do we really want to work with this type of customer?" and "How much of our business do we want this type of customer to represent?" If you decide that you want to deal with this type of shopper, the race is on: for them to whittle down your prices, for you to hold on to your margins.

"State" price shoppers are different. They are responding to some event and it's prompting their request for cheaper prices: limited budgets, insufficient funds, their business is down, they have underestimated their needs, they didn't know what to expect from suppliers on pricing, and so on. There is some catalytic event other than a general trend for being cheap that is driving their behavior.

Your strategy for dealing with these buyers is different. Ask yourself this question, "How can we make this a good deal for both of us?" Somewhere in this opportunity is a good deal for both of you if you're willing to hang in there and find it. If you reduce your prices, where will the buyer let you make up for the loss? How can you turn this into good business for your company? There is no such thing as a bad deal, just bad structure — either for the buyer or the seller. How can you re-structure the deal so that it is win-win?

If the buyer doesn't want win-win, you know you're dealing with a "trait" price shopper and what to expect.