| How To Be A Great Price Negotiator |
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| Written by Darin George |
| Friday, 04 January 2008 06:37 |
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Who at your dealership would you say is responsible for the gross profit-the salespeople or the sales managers? If there is no profit in a sale, whose fault is it? In today's auto retailing market, a large percentage of your customers are probably looking for some type of discount. Doesn't it make sense to start negotiations with your own very small discount of say, one to two percent? This technique is called "empowering the salesperson." You should not have to go to your manager to start a negotiation, but be sure to discuss this negotiating process with your management team before implementing it. It's all in how you start the negotiation The following is an example of a price negotiation. You can use this style for payments and trade-in negotiations. "Mr. Customer, I can give you this savings right now, which is $30,000 minus $300, bringing the total to $29,700. All you have to do is approve this and 'll get the vehicle ready for you ASAP-Okay?" As you are saying this, immediately turn and show the customer your worksheet with the numbers. MSRP or selling price $30,000 Savings $300 Total $29,700 When you present this number with no management involvement, the customer will react-it's Newton's Law. If the customer overreacts because the discount is not enough (which they most likely will), remind them what your position is at the dealership. Tell them: "Mr. Customer, my job at the dealership is to assist people in selecting a new vehicle, so let's see what I can do about the price. What number were you thinking you could get this vehicle for?" When the customer makes a counter offer, let's say, $27,000, the salesperson must also react. Be creative with your reactions. Remember how they reacted when you gave them your discount. At this point in the negotiations, keep your pen out of your hand-it's all verbal, for now. Never write down the first number the customer says- it will give them hope. They'll think that because you wrote it down, they must be close. Your response to the customer's number: "What is your reasoning behind that number?" You and your manager will need this information to know how to work the negotiation from this point. The customer's response to this question will get them right to the point, and they will tell you how they arrived at their number. Work from small increments of money. Verbally go down on your number, but don't write your verbal numbers on your worksheet. You are doing this to get another offer from the customer. You must get a second, third, or fourth verbal offer from the customer. Ask the customer: "What if I could get you the vehicle for $29,600?" (Pause and wait for their response.) "What about $29,550&hellip- I could try $29,500&hellip-" If they are not moving on their number, or if they have moved only a bit, say to them: "Mr. Customer you are going to have to help me out a bit here. We are X dollars apart. If you can be a little more flexible, I'm sure the dealership can and will be flexible as well." When the customer has given you the second, third, or forth verbal offer, write it down and get the customer to initial the number. Now you need to get the customer to commit to buying the vehicle. Keep in mind that you never want to use the words "financial commitment" or "partial payment" with the customer while in the process of negotiating a price. Let's say the customer's number is now $28,000. "Mr. Customer, I will need something to demonstrate that you really want this vehicle today. Do you have a credit card, debit card, or your checkbook with you today?" Once the customer has given you some type of commitment, make sure you ask your customer the following: "Mr. Customer, if we can agree on a price today, can we use this money toward your deposit on the vehicle?" The reason you have to say this is to clarify with them that they are about to possibly buy a car. At this point in the negotiation, you will take your worksheet, the customer's drivers license, and their collateral to your manager to explain what is happening with this customer. It is very important to get to the point with your manager so that they can assist you in closing the sale. Tell the customer: "Please give me a few minutes and I'll be right back." The manager will give you the number that the dealership needs in order to make the sale. Let's say the dealership/manager's number is $29,147. To get the customer to move up from their number, you will have to move down from your number, slowly. Do not go to the customer's number. Keep focused on your number. Ask the customer: "What if I could take off $47 (pause)&hellip- how about $100 dollars?" If you do not go down on your number slowly, the customer will not move up on their price. Try to get the customer to move up twice on their number and when they have, write it down again, get it initialed, and then take it to your manager. At this point you have to keep negotiating until you have agreed or disagreed on a final number. There are only two places you can go from here: Sell a car or let the customer go home, no deal. This decision is really, all yours. Always remember that you have two jobs at the dealership-helping people find a new vehicle and being a professional negotiator. Darin George is with Automotive Sales College, Inc. ASC has been training and recruiting salespeople since 1996. For more information visit www.visitasc.com or email Darin George at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . |
