+Scott Watson

Friday, 15 May 2009

A Different Way to Negotiate with a Sales Rep - Apply this to Management

Whatever our position, job title or status within an organisation, one thing rings true throughout. We are ALWAYS negotiating. Whether it be about budgets, resources, deadlines or when attempting to find some common ground and shared understanding following a problem, the ability to negotiate effectively is a very hand tool to possess. The ability to negotiate effectively is a good starting point, but a bad ending point. The willingness to negotiate fairly ideally partners ability.

Consider the following negotiation when I was looking to lease my current car.

Do I call 6 or 7 local dealers and have them send me information so I can compare quotes on a like for like basis? What are some of the potential downsides to this approach? Well they may include the sales rep assertively insisting that I visit his showroom to inspect the car and to allow him to gather more information. Nothing he couldn't do over the telephone if he could be bothered. No, the sales rep wants me in his showroom so he can influence me face to face, ask searching questions, to keep me in his (not my) conversation, to hand me a document for contact details - name, address, telephone number etc, not to just keep in contact, but to subtly pressure me into completing what turns out to be an order form. How dishonest is that?

Do I email 6 or 7 local dealers, with the email showing each dealerships email address and ask for quotes to be submitted by email only within a 72 hour timescale so I can compare quotes on a like for like basis? Absolutely yes! Why? Well, by setting parameters for HOW someone can respond, you take control of the sales reps ability to influence you. If they choose not to comply with your genuinely reasonable request, they are out of the running to generate a sale. What does the publication of other dealers email addresses do to their brain? Possibly starts to fry their brain BECAUSE they are now under immense pressure to either comply with your reasonable request OR try and break the rules by telephoning you 'for more information' to persuade you to visit their showroom. Bearing in mind the brief and specifications in my email were precise, there was no need for anyone to call me. But 3 did and immediately lost the opportunity to quote, never mind make a sale.

Common tricks employed by car sales reps include:

Good cop - bad cop. This is where the sales rep is discussing a price with you in his office and continually returns to his boss's office allegedly 'doing his best' to get you the deal you want. He insists that he will keep going back to speak with his boss on your behalf (yeah right) and is really pulling out all the stops to look after you. Let's think about this for a moment. The sales rep is employed by the dealership in order to help it make a profit. Why the heck would he want to do what is best for you - against his employer? Absolutely no reason at all. So, how do you get past this trick quickly and effectively? Firstly, don't be fooled in to having a cup of coffee and a biscuit while you wait. Bearing in mind coffee is hot and there is an unwritten psychological obligation that you must reciprocate by waiting until the sales rep has done his bit, you can't really leave politely without first finishing your HOT drink. So there's at least 5 minutes they have to influence you - on their terms, not yours.

Whatever you do, don't take a hot drink. It could cost you thousands of pounds you didn't intend to spend.Why? Simply because it takes time for a hot drink to cool down to an acceptable drinking temperature. Also, they are virtually always served in thin plastic cups which are a sod to keep hold of for long - so you drink more slowly! Get the picture? There's also the social obligation of reciprocity which comes in to play. The sales rep was kind enough to offer you (talk you int having) a hot drink so it would be rude to leave without finishing it. And you thought they were just being nice.

Don't go and wait in the sales reps office. The psychological pressure to stay put rather than get up and leave can become immense, especially when it has been preceded by an assertive, pushy or downright aggressive sales pitch. Stay in the showroom or potter about outside.

Don't get caught up with good cop -bad cop acting. If the sales rep says 'I'm going to see my boss to negotiate the best deal for you'. Politely insist that you accompany him to his boss's office so you can all have that dialogue. It scares the heck out of a sales rep when they notice that someone knows all about their tricks in advance. Give the sales rep a specific timescale to produce their best price. It could be 'I'm sure that in 15 minutes, you can agree with your boss what your best price would be for this vehicle. I'm prepared to allow you 15 minutes to agree your best price and when 16 minutes appears, I am leaving forever.' Sounds dramatic, but again, allows you to take control rather than being controlled. You may be surprised just how quickly the sales rep returns, firstly, to try and offer you another hot drink - but you now know why this is, and to again tell you that he is doing his best for you. He is doing so well for you that his shirts top button is now undone and his once straight (possibly designer) tie knot is now half way down his chest. Oh, how my heart bleeds!

Don't be drawn into 'Sign Today' deals. This is designed to pressure you into thinking that a 'special deal' or discount is being produced just for you. Believe me, it's not! It's being produced just for the dealership. The best decisions are usually not made on the spur of the moment, they are made following a period of reflection and consideration. Control your impulse to buy and you could enhance your negotiation capability. I once had a dealer say to me 'If you don't buy it today, the car will go'. My somewhat sarcastic response was 'Well, it should GO, it's got an engine hasn't it.' You guessed it, I didn't buy from this bloke - and he didn't keep in touch!

Don't answer the question 'Where do we need to be to sell you this car?' This is a sign of desperation on the sales reps part. If you answer with a specific number, firstly, you may be paying more for the car than their bottom price, secondly, in order to make the price of the car appear cheaper, they will want to extend the monthly payment period, perhaps by a few years. But if they tell you at all, 60 months for some reason sounds less than 5 YEARS. When they have presented their supposed 'best price' to you, all you need to do in response to their question is politely say 'Oh, come on, you'll have to do better than that'. Don't say by how little or how much, just stick with the phrase and invite them to reconsider.....and the clock is ticking and, no, you don't want another scorching cup of coffee. If the rep returns to you for a second or third occasion, each time dropping the price, what does that demonstrate to you? Yep, there's still further room for negotiation. If the rep has supposedly pulled out all the stops for you - and they rarely if ever have in my experience, politely thank them for their efforts, hand back the empty cups, stand up and walk away. They've been using this stuff on you, so why not use it WITH them? Again, you may be surprised at the efforts they will make to get you to stay.

Retain the willingness to walk away. If a sales rep repeatedly returns to you with supposed new and improved deals, ask him to confirm each in writing on a company headed compliment slip. You can ethically use the written information to negotiate with another dealer - and you can show the sales rep a little contrast in their own offering. 'Each time you come back with an alternative deal. I want your final offer of a deal on the next compliment slip please and then I'll decide whether to buy from you...OR FROM SOMEONE ELSE'.

Forget the add-ons. They are virtually worthless.

Car dealers may offer you incentives such as free mats (wow), half a tank of petrol (no lasting value), a bouquet of flowers (which you're paying for anyway), FREE roadside assistance (which you're paying for anyway), a multi cd changer (no thanks, I have an ipod), FREE extended warranty (why extended, isn't the car very reliable?). You want the alloys, but the dealer says 'Come on, you know they retail at £1000 for the set.' You're just about to concede the point and then ask 'But what price DO YOU the dealership get them for? I bet it's nowhere near the retail price. Show me your costs and we can go from there.'

Just so you are aware, I love to buy, but I don't enjoy being sold to. Without sales reps our economy would be in an even worse state than it currently is. We need good sales people, the one's who choose honesty and win-win over self-serving, ego based blagging - they are the ones to watch for.

How can you apply some of these principles at work? Who is using these tools, tricks and techniques on you? What impact is that creating? Does it help to develop trust or destroy it? Does it enhance collaboration and teamwork or damage it?

Just to be clear, while a link to a complaint forum relating to a car dealer is below, I have never had any dealings with the company mentioned. My comments in this blog feature does not relate to any specific dealer or showroom. The links are included just to share some relevant stories and news items.



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