Despite the fact that the world is emerging from a global recession, sometimes the need to buy a car shows up just when you least expect it. If that time has arrived for you, then maybe we should spend some time talking about what you need to do in order to successfully negotiate the purchase of your next car in 2010…
Michael Royce has spent a lot of time researching how best to buy a car and he believes that you need to understand the difference between three different car buying terms before you first step foot inside of a car dealership:
In order to get yourself into a proper mental state to negotiate to buy a car, you need to sit yourself down and remind yourself that you are getting ready to play a game – it’s a game with very high stakes, but it’s a game none the less.
The biggest challenge that you will face is the simple fact that in this game the other side of the table may be much better at it than you are. The car salesperson does this several times a day, every day. You might think that this gives them an insurmountable advantage over you; however, it doesn’t – most car salespersons are not that good at what they do.
Since many of them only know how to sell a car by following a script that the car dealership has provided them with, you have a fighting chance – if you change the way that the game is played, then you will have gained the upper hand in the negotiations.
In sales negotiating one of the most powerful tools that we have is the ability to walk away from the deal. All too often when we are negotiating to buy a car, we forget that we have this option. We’ve spent a couple of hours at the car dealership, we’ve gotten to know the salesperson and maybe even their manager, we’ve filled out some paperwork, its really started to feel like we’re committed to doing a deal with these guys. However, that’s not the case.
The great thing about being a car buyer is that there are a lot of different places that you can buy your car from. You don’t need to complete the deal that you are working on – you can walk away at any time. The other side of the table knows this too and they will do almost anything to prevent you from leaving.
You need to clearly state that you don’t want to talk about monthly payments (that’s like dealing in “funny money”), instead you want to talk about the selling price of the car. Don’t be in a hurry or give the appearance of being desperate (even if you are!).
Make sure that you’ve done your research and know what a fair selling price for the car that you want is. For new cars it’s probably a couple of hundred dollars over the invoice price and for used cars it’s probably $400-$500 dollars over the wholesale price. Start your negotiations there and be prepared to leave if things don’t go the way you want them to.
Royce makes the good point that even if you do walk out of a negotiating session, leave on good terms. There’s no need to burn bridges – this is just a business deal after all, not a personal attack.
The next day call the dealership back up and see if they still want to deal. It can be amazing how seeing you walk out the door can motivate them to find ways to get closer to the price that you want to pay.
Always remember that buying a car is very much a game that you play every few years. You’ll never do it as many times as the other side of the table has done it, but if you use these suggestions, then you can make the deal work out in your favor…
What’s the one thing that you think that you must do before walking into a car dealership to negotiate to buy a car?
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Remember when every business used to view themselves as an island? This made life pretty simple for anyone doing sales negotiations – it was always us vs. them. Well, it sure looks like someone farther up the corporate ladder has been reading those business self-help books and they’ve decided that there is a better way to go about doing things: partnering…
Brian Dietmeyer Has Some Reminders About Good Sales Negotiation Skills
The basics of sales negotiations are pretty straightforward; however, it can be easy to lose sight of them as we talk about tactics, preparation, and detailed sales negotiation skills. Maybe it’s time that we took a step back and got an expert to remind us about what we really need to be doing in our next sales negotiation?
Brian Dietmeyer is the President / CEO of a company called Think! that offers business-to-business negotiation training. He’s also written a book called Strategic Negotiation: A Breakthrough Four-Step Process for Effective Business Negotiation
Awhile ago Brian sat down with the folks over at SellingPower magazine and went over the fundamental things that we all have to remember when we start a sales negotiation. He does a pretty good job of hitting most of the bases.
The video included below (sorry RSS readers, I think that you’re going to have to visit the blog to see the video) is only about 5 minutes long. Brian does a good job of pointing out three things:
Brian is, of course, trying to sell himself, his company, and his book but he only does this briefly about halfway through the video – it’s still a good video.
Do you agree with Brian – would having the right facts & data allow you to reach an agreement with a difficult customer? Do you think people’s fear of sales negotiations comes from the fact that they are afraid that they don’t have the right data? Do you think the 3 offer technique would work for you? Leave me a comment and let me know what you are thinking.
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So this time around, we’re going to do things just a bit differently. There’s a video that has been going around on YouTube that does a pretty classic job of capturing just how ridiculous negotiating between vendors and clients can be.
Although Funny Money May Look Like Real Money, It Isn't...! (c) - flickr / gaymay
My daughter is currently learning about how to add fractions in school. The trick to doing this right is that you have to make sure that the denominator (the number on the bottom of the fraction) is the same for both numbers before you add them. She’s struggling with this concept and it reminds me of a key sales negotiating point – never try to do a deal using funny money.
We all have heard the phrase “apples to apples” right? Well funny money is something that can either sneak into a sales negotiation or be slid into it by one side of the table. When this happens, all of a sudden you aren’t comparing two equal things such as how much a product costs and how much you are willing to pay for it. Instead, all of a sudden you’ve got apples, oranges, and bananas on the table in front of you.
A great example of funny money in real life is what happens when you gamble in a casino: you don’t use real money, you use chips instead. There are a number of reasons for this, but a key one is that chips don’t “seem” like real money. That allows us to gamble more and not feel as bad when they all go away (although it still hurts when we get the bill later on!)
Whether intentionally or not, funny money can slip into just about any sales negotiation. It’s the careful negotiator who keeps his / her eyes open and spots it when it shows up. Here are a few examples of what funny money can look like:
It is the job of every sales negotiator to train yourself to always be asking the question: what is that worth. Just like my daughter is trying to learn to remember that she always needs to convert the denominator of two fractions to the same value, so too do sales negotiators need to learn to always “map” funny money to real values.
No matter what the other side of the table says, always take the time to translate funny money into real dollars and cents (or whatever currency you are using). If you don’t take the time to do this, you run the risk of making a bigger concession than you intended to. Learn to deal with funny money correctly and this will allow you to close better deals and close them quicker.
Have you ever been in a sales negotiation that included funny money? What form did the funny money take? How did it get into the negotiation? Did you take the time to map it to real money? Did you end up making a larger concession than you would have if you had been dealing with “real” money? Leave me a comment and let me know what you are thinking.
Click here to get automatic updates when The Accidental Negotiator Blog is updated.
The basics of sales negotiations are pretty straightforward; however, it can be easy to lose sight of them as we talk about tactics, preparation, and detailed sales negotiation skills. Maybe it’s time that we took a step back and got an expert to remind us about what we really need to be doing in our next sales negotiation?
We all hear so much about the smooth Donald Trumps of the world that we can fall in to the belief that everyone shows up for a sales negotiation better prepared than we are. Nothing could be further from the truth. In fact, there are four common sales negotiation mistakes that even really smart people make all the time. Are you making any of them?
It turns out that the reason that so many sales negotiations turn out poorly for negotiators is because they enter into the negotiations with the wrong state of mind. Instead of preparing for the negotiation, they go in with a “let’s hope for the best” type of mindset. How can they possibly hope to do well?
Sales negotiators who have this type of mind set more often than not don’t do well during a negotiation. They fall prey to the four deadly sins of sales negotiations:
While I worked for Siemens, there was a large French-Canadian director who would occasionally explode in strategy meetings and shout at people that “Your Plan Is That You Have No Plan!” In a sales negotiation, this is often the case when people enter into the negotiation without a plan.
Instead of a plan, they have hope. Hope that things will go well. That they won’t make too many mistakes. That the other side will make mistakes. A sales negotiation is a journey, not a destination. You need to have a plan (concessions, demands, questions, schedules, etc.) for how you are going to get to where you want to go.
During everyday conversations with friends and coworkers, we all have a tendency to agree to things that we may not have a full understanding of. This is a polite way of keeping the conversation going even when we may not fully grasp what they are saying – we figure that we can pick it up later on.
This same type of behavior during a sales negotiation can be disastrous. If you don’t take the time to fully understand what you are agreeing to, you may find yourself quickly in a bad situation. Call for a break, take a time out, or ask the other side of the table to better explain something before you agree to it.
Looking the other side in the eye and signing a contract with a big flourish sure can make a strong impression – that you don’t have any idea what you are really signing. I learned a long time ago that he who takes the notes, ultimately controls how a meeting turns out. The same goes for sales negotiations – it really doesn’t matter what you THINK you’ve agreed to, it’s the words that make it onto the paper that really matter. Take the time to read them!
It’s too easy to think that a sales negotiation is over and done with once the last paper has been signed and the handshakes have been exchanged. However, both sides of the table have a responsibility to follow up and make sure that the agreement is being executed by both sides. Not only is this a critical part of doing business, it can have a big impact on any future negotiations between the two sides.
A long time ago I took a scuba diving class. One of the key lessons that they taught in that class was the simple phrase “Plan your dive, dive your plan.” The same thing can be said about sales negotiations: you need to have a plan and you need to follow it if you want to have any chance of being successful.
We now know what can happen if you don’t have a plan: you’ll end up skipping ove important steps like agreeing to things that aren’t clear, not reading things that you are signing, and not following up after the deal is done. Remembering to plan your negotiations ahead of time and avoiding the 4 deadly sins of sales negotiations will allow you to close better deals and close them quicker.
Have you ever gone into a sales negotiation without having a good plan? Did you end up agreeing to things that perhaps you didn’t fully understand because you didn’t know what you were looking for? Did you fully read the contract before you signed it? Did you remember to follow up to make sure that the contract was being followed after it was signed? Leave me a comment and let me know what you are thinking.
Click here to get automatic updates when The Accidental Negotiator Blog is updated.
My daughter is currently learning about how to add fractions in school. The trick to doing this right is that you have to make sure that the denominator (the number on the bottom of the fraction) is the same for both numbers before you add them. She’s struggling with this concept and it reminds me of a key sales negotiating point – never try to do a deal using funny money.
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