Let’s be upfront about this: If not done well, negotiating is confrontational and uncomfortable for both you and your customer.
If only you could read your customer’s mind and know how to make it easier!
The most important thing to understand about negotiating is with whom you can negotiate and when.
You can only negotiate with someone who genuinely wants what you are negotiating about.
By the time you have entered the sales process’s negotiation phase, you have to be 100% certain that you have a buyer at your desk. If any of the following statements describe your customer, you don’t really have a buyer at your desk.
- If the customer came inside simply to “look at numbers,” you don’t have a buyer
- If the customer said he’s leaving to go drive other cars but wants your best price before he goes, you don’t have a buyer
- If the customer hasn’t told you that this is the perfect car for him, you don’t have a buyer
If you aren’t confident that the person at your desk has made an emotional commitment to own this car….
You don’t have a buyer that you can negotiate with.
On the other hand
- If you’ve carefully walked the customer through the sales process
- The customer has handed you his registration and insurance
- The customer has taken complete mental ownership of the car he drove
- And, he’s agreed to take the car home right now if you can make the numbers work
Then, you have a buyer. A buyer you can negotiate with.
You’re not trying to meet in the middle. You’re not trying to create a win/win. You’re trying to help the customer drive home in the car they love, and you’re trying to support your family and provide for your financial future.
That’s the only win/win you’re looking for.
The concept of negotiation begins with an understanding of Cognitive Bias.
Cognitive Bias is the brain process that distorts the way we see the world.
People are not 100% rational nor 100% emotional. There is always a mix between the two. As mentioned earlier, your job is to swing the customer’s mindset further to the emotional side than the rational side.
Psychologist Daniel Kahneman and Economist Amos Tversky identified more than 150 cognitive biases.
“It’s self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable,”Daniel Kahneman
Let’s touch on just of few of those 150 biases.
- The Framing Effect: People can respond differently to the same facts when presented in different ways.
- Loss Aversion – People tend to react to fear of loss than the promise of gain.
- Priming Bias – People tend to be influenced by what someone else has said.
- Affinity Bias – People tend to be favorably biased toward people like themselves.
Understanding even these few biases can be a tremendous help as you enter the negotiation phase of the car sale. And, if used properly can make you feel like you have the ability to read your customer’s mind.
In our coaching sessions, we expand on these and others to give our clients the skills they need to be smart negotiators.
Becoming a better negotiator is key. If I can help, let me know.
Until next time.