The key to making gross profit is to earn it before the negotiations begin. If the groundwork has been built correctly the building will NOT fall down. The negotiation process is the easiest part of the selling process if all the proper steps to the sale have been completed, with NO short-cuts! Sales associates must ask themselves one question before negotiations begin, "Have I truly earned the right to ask for this customer's business?"
Regardless of the sales system you currently employ, The 5 Steps to Negotiate Anything can always be applied. But first we have to accept one important fact; "starting" figures first presented to the customer are never accepted! (However, if they are, instruct your team to stop selling and start writing up the deal!) Your salespeople must anticipate this negative reaction beforehand and ACT instead of REACT to the situation. The salesperson who reacts may lose the deal, but the salesperson who acts with preparation, courage and confidence will overcome most objections and make the sale.
The first step, Reinforcing the Deal, is to show enthusiasm and conviction that the starting figures presented are more acceptable. The salesperson who loses his guts at the first "pencil" loses his negotiation credibility immediately. Every time a salesperson accepts that first "NO" from a customer, the gross profit goes down the drain. Now is the time to have the confidence to DEFEND the starting figures and not be afraid to spend a little time doing it. If the salesperson jumps up after a few minutes and runs to the sales desk for new numbers, the deal could be lost.
Next, Condition an Offer. But only offer small increments. Use questions like, "Seriously folks, what were you thinking$50 less, maybe $75?" or "We've offered $5100 for your trade, were you looking for $5150maybe $5200?"
Next, the salesperson must Get An Offer. Some type of commitment is vital to the progress of the negotiation. Stress that if the offer is ridiculous, attempt to switch to a less expensive car or a pre-owned unit. This has a very strong psychological effect to a customer (but salespeople should carefully observe their customer's reactions to being switched). Chances are the customer will "bump" back to the original unit desired.
After getting an offer, the Automatic Bump is the easiest way to pick up immediate gross profit before they go back for the "second pencil." Regardless of the customer's offer, the salesperson should always ask for a little bit more. They WILL get something more in most circumstances and also reinforce the original proposal's credibility!
Lastly, the Statement With the Final Offer will properly "set the stage" for the salesperson's trip back to the sales manager. Say, "Folks, promise me that if I can't get those figures handled you won't be mad at me, but I promise you I'll do the best I can. Wish me luck!" This statement process psychologically keeps the customer from being backed into a corner. Salespeople must learn to tactfully let customers out of their previous offer if they are going to get them to accept a new offer.
Sales professionals can't change buyer's minds, but we can provide them with new information to make a new decision! Remind your staff to use Evidence Manuals to back up what they say; it is a fact that people will believe more of what they read than what they hear. Also, this gives them something to read while the deal is re-worked. Follow these five stepsand watch your profit soar!