Tag Archive | "negotiation"

Three Big Mistakes Salespeople Make In Negotiating

You can have the nicest customer, have done a great job of selling, and have a firm commitment to purchase (total mental ownership) and still lose deals once you pull out the paperwork and try to close it inside (negotiate).

Here are three of the most common and costliest mistakes salespeople make as they start working the deal.

1.   Most salespeople lose control.

To be more accurate, most salespeople never had any control. Your first two to three minutes pretty much determine your outcome with every customer. Control starts with your greeting and first few questions. And if you can’t control the direction of the conversation there, good luck negotiating, you’ll definitely need it.

The person asking questions controls the conversation and the direction of the conversation – and that means by asking questions, you control the selling process.

Most salespeople don’t know how to ask questions, but their customers sure do. How much is it? What can I buy it for? What would payments be? How much down? What’s my trade worth? The list is endless, and if you just become an answering machine – you’ll lose almost every sale you could have made.

2.  Most salespeople are allowed to take shortcuts.

Too many salespeople take a deal to the desk, and then they work their manager harder than they work the customer. Instead of doing it right, they bring a loose deal, with no paperwork and no real commitment to the manager and say, “I can’t get a commitment, but he’s gonna leave if I don’t give him a price.” So instead of making us do it right, too many managers let us do it wrong in hopes of making the sale.

If you don’t understand the correct way to work a deal, that’s a subject that’s way too big for this article. So get to a sales class and then a closing and negotiation class. Don’t try to shortcut things again, learn to close first and then negotiate. Negotiation is hard if the vehicle wasn’t ‘sold’, or if the deal wasn’t closed correctly. Stop taking shortcuts in your career and you’ll make more money in sales than you ever imagined.

3.   Most salespeople focus their selling and negotiating on price.

I know everybody brings up price in some form, every time, on every deal, but price is not what customers buy and it’s almost never their primary concern.

Price wasn’t even on a recent JD Power Top 10 Survey that looked at what buyers want, and it’s #16 on most customers’ priority list after they find a vehicle they want to own. And then when you get to the negotiation, no matter what they say, or even agree to about price, for 94% of the people, it will still depend on fitting the vehicle in their budget because they’ll be making payments.

Learning how to work with price is critical to selling cars, and there are three things you have to learn to do with price:

  • Bypass… You have to learn to answer their questions like, “How much is it?” and get right back to following the process. It’s extremely easy if you learn how to ask the right questions.
  • Rephrase… When you get a price objection when you’re closing, you need to rephrase their objection to budget for multiple reasons. That’s easy, too, if you ask the right question.
  • Refocus… You work deals on price, but their decision to buy will always be based on budget. You have to learn the right questions to take the focus from price back to terms.

When you work this list backwards and learn how to ask questions, learn how to deal with price, and stop taking shortcuts, you’ll have more control and you’ll sell more cars.

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Build Rapport Quickly

To a small business owner, one negotiation with a prospect can make or break the company. With so much at stake, quick rapport-building becomes a critical skill. And what is rapport? In business, it’s simply a framework for information transfer.

When you walk into that meeting, you need to know more about the people you’re meeting with than they know about you. That knowledge is power and provides a distinct advantage. Everything you know about the people who are there to evaluate you will impact how you approach them. It will guide you in knowing when and how to cause stress—for example, to ratchet up the level of concern about a problem you can fix—and when and how to counter that stress.

Taken together, the information you collect and behaviors you observe will give you what you need to establish rapport quickly. Here are tips to help you do that:

Come in with prepared questions. You are meeting with a customer in the property management business and you want to discuss professional services. You prepare a list of questions in jargon he would use to describe his biggest opportunities to make money and factors that impact his bottom line. It allows you to speak his language instead of asking him to educate you or speak your language.

Observe body language to detect signs of acceptance or rejection. When you are winning someone over in a negotiation, the person will do things like this:

    • Mirror your movements

    • Raise the chin up to your level, that is, the chin is not protecting the throat

    • Keep the chin level and even with you, not raised higher in indignation

    • Stay engaged with your eyes

    • Smile slightly

Conversely, when you have pushed too hard or missed the mark in rapport-building, you will see some or all of these signs:

    • Barriers to increase the separation between you

    • Chin up high in indignation or slightly down

    • Avoiding eye contact

    • Nervous gestures

This article was written by Gregory Hartley and published in Bloomberg Businessweek magazine.

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