Is Your Negotiating Process Hurting You?


Thinking Like a Customer Might Seal the Deal

By: Mark Tewart

It’s a fact that the majority of customers still want to negotiate. Depending on the formal study you may read, they all say well over 50 percent of people want to negotiate on the purchase of their vehicle. The question is, do you negotiate in a manner that hurts more than helps you?

Imagine a water slide. You get into the beginning of a water slide and then go effortlessly down the water slide, picking up speed and momentum and you always reach your destination. There is nothing that stops you. This water slide example would be a great analogy for a perfect buying process. Unfortunately, you may be utilizing methods every day that do the opposite. You may be using techniques that create fear for the customer and slows or stops the buying process altogether while perpetuating long held feelings about car salespeople and dealerships.

Think Like A Customer

Utilize an approach based upon TLC – Thinking Like A Customer.  Traditional sales processes have been based upon a linear road to the sale. The linear process is not as applicable as it once was. Based upon online behavior, you must be willing to be nimble in your approach and process. If a customer is on step four of your traditional process and because of their time spent in online research they are in a heavy logic phase, do you now tell them you don’t care and shove them back to step one?

Nature abhors a vacuum. It will fill up the vacuum quickly. The same thing will happen in your sales and negotiation processes. If you are willing to let go of long held traditional beliefs and strategies, you will quickly fill the space up with something better. Be willing to start with a clean erase board in your thoughts, behaviors and strategies.

As Bob Dylan said, “The times they are a changing.” Have you changed? Has your desking, deal proposal and negotiating process changed? Even if your dealership adheres to a one-price philosophy, there is negotiation that occurs in the mind of customer from the moment they first see anything online associated with your dealership to the in store process. Strive to be intentionally congruent. Is everything in your appearance, approach and process congruent from online to offline?

Let’s be more Customer-Friendly

Let’s look at a few strategies that may improve your negotiation process and move it to be more customer- friendly. First of all, are you practicing transparency by sharing everything you can in the proposal? Do you share the price, trade value, payoffs, total balance, payment options and lease options. Although the far majority of customers buy cars by financing, I still see dealerships that work deals on price and trade difference.shutterstock_302376737

The customer negotiates a price or trade difference and then often goes into F&I and winds up renegotiating the deal based upon payments. The F&I department is essentially your closer. The process takes twice as long and is very frustrating for the customer. They feel squeezed and pressured by having to continually negotiate. The process is abased upon the dealership and not the customer.

It is common for many dealerships to rarely if ever show leasing options today. Although leasing is rising in numbers and may be the best option for the customer, dealers and managers are often not giving the customer the option because they don’t understand leasing and often don’t know how to calculate a lease properly. It should be common practice to show at least one lease option on every new car proposal.

Options, Options, Options!

Often, when managers give proposals to customers, they are showing only one payment-down payment option. Buyers are educated today and educated consumers want options. Three options can help create comfort for a customer and allows them to choose. This is called the, “Power of Three.”  More than three options can create confusion. Think back to the time you bought your first house. In your zeal, you may have looked at twenty houses. By the end of the process, you may have had a hard time remembering the key things of many of those houses. It simply became overwhelming and led to discomfort. The same can be true of a customer.

When you share a proposal of figures with a customer, are you prepared with two to three ways to respond to any objection on price, trade, down payments and payments? Does your response acknowledge the customer first? Does your response verify and validate your original proposal? If you cannot say yes to any of these questions, then you are practicing positional negotiation.

Positional negotiation is the traditional strategy used in many dealerships that upon a customer stating an objection to anything, we typically ask, “What figure(s) were you thinking Mr. Customer? This simple misstep causes fear in customers, creates the back and forth of negotiating that customers do not like. This ill-advised strategy causes many of your customers to move from being buyers to shoppers.

The customers now must shop to fully feel comfortable that your best figures are your best figures. This is as much or more true today in the Internet shopping and buying age and pre-internet days. The reason is that customers have information and now want to feel comfortable with the information and the person(s) they are dealing with.

The reality is that in the information age, customers are looking for a relationship as much or more than ever. They used to need you for information, now they need you for comfort. Your mission to move your customers from being transactional to transformational in the way you deal with them and the process. Become a car buyer concierge!

Value-Added Negotiations

Your negotiating process must move from being positional in nature to value added. The fact is that many customers don’t dislike negotiating; they dislike the WAY we negotiate.

Take a moment and close your eyes. Imagine you are buying a vehicle at your dealership and you are sitting in the chair of the buyer. Imagine your standard deal proposal and negotiating process. Imagine a deal from beginning to end in a typical fashion your customers go through. Try your best to become like the customer. Think as your customers think, feel as they feel. Change the paradigm and ask yourself, “Would I want to go through my dealerships sales process, negotiate a car deal in the way we do it and try to buy a car from our dealership?” Unfortunately, if you are brutally honest, the answer may be, “NO!”

It’s easy to become jaded in the world of automotive sales. You have customers acting in their own best interests that in trying to protect themselves may not always be completely truthful. Your customers may shop and utilize you to get a better deal. 

Elevate, Motivate and Educate

So what’s the answer in handling this? You must elevate, motivate and educate. You must up what you do, how you do it and how you share it to such as a way that you lower the customer’s dependency on price. Will this work for every customer? The answer is absolutely not. The great news is that you don’t have to sell every customer.

You cannot and should not even try to be everything to everybody. Take what you do and do it so well that you attract and sell to the customers you want to sell to.  There is a quote, “Be somebody, be somewhere and do something” Once you define those things in detail and create processes based upon the customer, delivered in such a difference making way, you will changed your sales and negotiating process to a way that helps rather than hurts you.