Several issues ago we began some discussions on negotiations, specifically relating to giving your salespeople the confidence to do it well. Here I would like to talk about a few techniques typically used in negotiations. You know them, I know them, but most new salespeople do not. The manager says, "Hey, go split the difference with the guy." "Huh?' We assume that everyone knows what we know or that everyone knows the basics, but everyone doesn't. Even if the new hire has been selling insurance for the last five years, we can't assume that they know what splitting the difference means. I don't know if you can even do it when selling an insurance policy. What about a personable young individual you hired who has been working in a restaurant? You can't assume they know either. So now, in no particular order, I am going to throw out a few ideas. Use them in your next sales training meeting.
Let's start right off with splitting the difference. It simply means that if the manager is at $9200 and the customer is at $8800, the salesperson would suggest that the customer split the difference, $9000. "Mr. Customer, my boss has been working very hard to put this deal together and he appreciates your efforts to do the same. You were flexible in your demands and he has been flexible in his needs and I'm not done working for you yet. Let's do this. Let's split the difference. He's at $9200 and you're at $9000. Let's offer him $9000."
It's that simple. However, what most salespeople forget is where the manager is in these negotiations. Salespeople many times believe that they have a deal here, but they don't. Where is the manager? Right, $9200. And what will the manager do? Right again. He (or she of course) will split the difference back at $9100! The key for new salespeople is to never make it appear that the manager has already accepted $9000. This will certainly be more evident when we are splitting the difference between $18,000 and $20,000, won't it?
The next technique you must educate your salespeople on is how to handle the customer that stands up. The key is that whenever a customer stands up, the salesperson MUST stay seated. As soon as the salesperson stands up, the customer is in control, the salesperson is pleading, and the customer has the upper hand.
During the negotiations the salesperson returns from the manager's office with a counter offer and says, "Great news, Mr. Jones. My boss says you can buy the car for only $14,500. Just give me your OK and I'll get you into the business office. You'll be driving your new car in no time!" The customer stands up and says, "Thank you, but no thanks. That's still a bit out of our budget." (Remember that this does not always have to be an adversarial type situation. The customer doesn't always have to be mad or loud. "What!? Are you crazy?!" Sometimes the customer is lulling the salesperson into their trap by being warm and fussy.)
When the customer stands up, the salesperson simply needs to say, "Sit down." The customer will, if not the first time, maybe on the second. Just because the customer walks out of the office doesn't mean the salesperson has to get up either. I have had many deals where I talked to a customer 15 feet away from my desk, "Come on back and sit down here, Bill." (NOTE: Your salesperson should never let the customer get out the door, though!)
When the customer does sit back down, the salesperson simply says, "Listen, I don't make the final decision, but I will not give up. I got this price from the used car manager. I'll go to the GM or the business manager, even the owner if I have to. Let me ask you this. What if I could save you another $XXX, could I earn your business?"
Will this work with every
customer that stands up? No. But it will help new and even some experienced salespeople gain and maintain more control.
The last thing I'd like to share is taking the car away. When we get into closing techniques we will talk more about this but I would like to discuss specifically, the guy who offers WAY too little for a particular unit. The customer says, "Well, I wouldn't give you a nickel over $12,000 for that $15,000 car." (As a rule, always use 20%) If the customer wants more than a twenty-percent discount, take the car away. And do it like this. The salesperson needs to stand up immediately and say, "I'm sorry sir, if that's all you want to invest, let me show you a different car." And the salesperson heads out of his office.
We do not want to take the car away but we need to show the customer that we mean business, that we will take the car away. That we do not want to waste the customer's time and the only way to do that is to stand up. Make the customer make the salesperson sit down. When the customer says, "No, no, this is the car we want!" The salesperson then sits down and says, "Fine, but you'll have to adjust your thinking." And then the salesperson comes back with a counter, more realistic offer.
These three techniques are going to be very helpful in giving your new salespeople the confidence they need to close more sales. In the next issue, we will talk about some very specific closing techniques.
Good Luck and Good Selling.