E-NEWSLETTER – May 2011
This Month’s Selling Principle:
Guaranty Future Value
“That’s not enough for my trade!” – Guaranty Future Value
What do we do when our customer tells us, “That’s not enough for my trade!”? If we tell them our manager is willing to pay, let’s say, $8,000 for their present vehicle, don’t they always want $10,000, $12,000, or more?!
I’m assuming we’ve already done a silent devaluation when we walked them around their present vehicle out on the lot. And we’ve already tried showing them two figures, one with the reconditioning done by them and one with us doing the reconditioning. But what do we do when the strategy of explaining wholesale book less the reconditioning their car will need doesn’t satisfy them?
Most of us will ask them where they come up with their figures and they tells us things like, “I’ve checked Kelly Blue Book online myself, I’ve checked Edmonds.com, I’ve checked with my credit union, I’ve reviewed the local newspapers, or I had a neighbor who said she’d pay me that if she were still in the market.” Does that sound familiar?
Many of us then try to fade our number or we try the “wholesale to wholesale, retail to retail” technique, or we try showing them published figures from the local auctions in our area. Some of us may go through the “sell it yourself” scenario, (you know, “Mr. Customer, you could always just sell your car yourself, right? But then you’d have to advertise it and recondition it yourself. And do you really want to have to worry about bad checks, trade ins, and having weirdos knocking on your door at all hours of the day or night?” ) but what if after using these things the customer is still stuck on their figure?
Everyone knows these techniques and each one of them works…sometimes. The problem with all of these, however, is that 1) everyone knows them, and 2) at their core, they are all designed to convince our customer that their car isn’t worth the $12,000 they think it is.
The power of the following negotiating strategy is that it actually gives our customer the $12K they want, and makes them turn it down. It’s called Guaranty Future Value.
It goes something like this:
“Mr. Customer, that $8,000 figure is simply the dollar amount my manager is guarantying our owner your car would be worth. It’s his opinion based on all the stuff I’ve already covered with you” (wholesale less reconditioning).
“Like any good business owner, our dealer wants his working capital turned every 30 to 45 days, in this case his inventory. And that $8,000 is the simply dollar amount my manager is confident enough to guaranty our owner your car would be worth should he have to liquidate or quick sell it.
But, frankly, he doesn’t sound any more confident than you. You seem pretty confident that your car will bring $12,000. Right? How come?”(Now, we let them tell us where they came up with their figures. Even if we’ve already asked them this, it’s a good idea to let them tell us again.)
Once they’ve gone through all the reasons why they think their car is worth the $12K they want, we continue with, “Well, I think there’s another way we can approach this. I’d still have to check with my boss of course, but if you were willing to guaranty our owner the value of your vehicle, I bet you we could get you what you want for your car. What do you think?”
When our customer asks us what we mean, we continue with, “It’s simple. If, after thirty days, we aren’t able to get at least $12,000 for your car, based on what you’ve told me though we should, but if for some reason we’re not able to sell your car for at least $12,000, you’ll agree to either buy it back and sell it yourself or simply make up the difference. At that time, it’ll be your choice, whatever works best for you. How’s that sound?”
Evidently this technique has been around for a long time. I was first introduced to it in late 2003, so I’ve only been teaching it for a year or so but here’s what you guys have told me your customer’s responses have been.
The most common response by far is the customer says they’re not comfortable doing that or that they want it to be a clean deal with nothing hanging over them. We should respond with this, “I understand. Then you can appreciated how difficult my manager’s job is, right? I guess confidence in a number has a lot to do with whether your buying or selling, huh? That’s okay. How much over $8,000 are you willing to guaranty?” Now, they usually either bump themselves or accept the $8,000 and go to another area of the negotiations.
This technique, by the way, was not designed to get the customer to accept $8,000, or at least that’s what the guy who shared it with me said. It’s simply designed to help them see it from the manager’s point of view and hopefully get them to be more flexible.
The second most common response you guys have told me the customer gives you is they don’t want to guaranty it but they still want $12,000. To that we should respond with this, “Mr. Customer, you’re not comfortable guarantying $12,000 and it’s YOUR truck…how’s my manager going to do that?” (Wait and let them mull this over for a moment, then finish with,) “C’mon, if you’re willing to be a little flexible I’ll get him to be flexible too.” Now, they usually bump their figure some.
The third most common response is that the customer will say “I don’t care about all that stuff, son, $12,000 is just what I want.” To this we could reply, “Mr. Customer, my manager WANTS you to pay too much for his car too…but that ain’t going to happen either, is it?” When our customer says no it won’t, then they just bumped themselves.
Like I said, I was first exposed to this strategy at one my of workshops just over a year ago. The gentleman who shared it with us that day said he’d been using it very successfully for years. And in all that time not one customer had ever told him that they’d go ahead and guaranty it. Since teaching it myself for this year or so, none of you have told me of anyone willing to guaranty the future value of their trade in. But just in case someone does take us up on our offer, we can do one of the following:
1) Take it back to the desk, come back to the customer and say, “My manger wasn’t comfortable doing that. Your satisfaction is more important than the few dollars we would make and he knows your car isn’t worth what you’re thinking. He’s not comfortable hanging that guaranty monkey on your back. But he did have a couple other wholesalers call him back and he could give us $8,250!” and just work the deal the way we do already.
2) We could take the car in for $12,000 and have the customer cut us a hold check for the difference or do a conditional sales contract for their trade. At the point when they are writing out the check, you might find them a little more willing to be flexible.
3) We could work the rest of the negotiations assuming they are going to guaranty their trade. Then at the end of the negotiations, we could say, “You know, if you’d be willing to be a little flexible on your monthly budget, I might be able to get my manager to step up on your trade and take that guaranty cloud from over your head.”
In the year or so that I’ve been teaching this particular technique, sales people have given me tremendous feedback about it’s success. They say that it’s different, their customers haven’t heard it before, and it’s getting them additional gross profit. I hope the same happens for you.
This, like all new techniques, needs to be personalized to our own selling style, our own selling rhythm, and our own vocabulary. Then it needs to be practiced until we own it. And like all other techniques, it’ll only work when we are willing to use it.
How soon will you get started?
Until next time, be well, do good work, and keep in touch,
Michael D. Hargrove
“If you and the one you love are both early risers, or if evening schedules prevent sunset viewing, try finding a special place to watch the sunrise. Instead of reviewing the day and seeing it come to a close, reflect on the promises each new day provides. Start the new day by saying “I love you.”
Arterburn, Dreizler, & Dargatz
Objection of the Month: “I need to sleep/pray/think about it.”
These are just a few of the most common strategies shared at the workshops we’ve conducted all across North America and attended by thousands of the top sales people in our field. Please keep in mind that nothing works all the time, and no one thing will work for everybody. Each of these strategies, of course, need to be tailored to the individual user, to the specific customer, and the particular situation. Also, this is by no means the definitive work on overcoming this particular objection and it’s not intended to be.
a. “Where I come from, that means someone just wants to make their decision” (or “pray about it”) “without some salesperson hanging all over them. I’ll just excuse myself for a few minutes and you folks go ahead and discuss this alone.” (or “do what you feel you need to”) “When I come back, if you have any remaining questions, I’ll address them then. That way you’ll feel completely comfortable about owning your new car.” (Then we need to leave and get out of their line of vision for a few moments. After about thirty to forty seconds, we get back into their line of vision, close enough to see them but not so close as to hear what their are saying, and let them see us waiting. When they ask us back into our offices or back to the table, they’ll usually tell us either “Yes” or “No” but rarely tell us they need to think about it.)
b. “Mr. Customer, we’ve worked out such a great deal already. Now is the best opportunity you’ll ever have to own the van you really want. I’ve worked very hard for you and now the ball is in your court. So, let’s wrap this thing up so you can start enjoying your new van. Do you want it registered in your name or the company name?”
c. “That’s fine Ms. Customer, obviously you wouldn’t spend time thinking this over if you weren’t serious about owning this car. You wouldn’t be telling me this just to get rid of me would you?” (Wait for their response, then ask,) “Then I know you’re going to give this careful consideration, right?” (Wait for their response, then ask,) “Listen, just to clarify my thinking, just exactly what is it you have to think over?”
d. “That’s great! Let’s think it over together. Two heads are better than one, right? What exactly do you still need to think about?” (Or if the objection is “Pray about it”:) “That’s great! Let’s pray about it together. But I gotta be honest with you though folks…you’re going to pray for guidance, right?” (Wait for their response, smile, and then say,) “Well, I’m going to be praying for the sale.”
e. “Good! Think about it some more, and remember they can only honor this deal for a certain amount of time. I’ll be back in a few minutes.”
f. “Okay, that’s why I’m here! I’ll help answer any further questions you may have while you think. What’s the first one?”
h. “Please don’t think yourself right out of the car you really want to own! I can see how excited you are and that excitement is really a necessary element of making a great decision. Let’s finish it now so you can start showing off your new Porsche. Will that be a personal check or a company check?”
i. “Sometimes when my customers say that it means I haven’t done my job well enough. Tell me what you need to know in order to feel comfortable about owning this car.”
j. “Whether you take one night, one week, or one month to think this over it’s still going to come down to the same three issues it does with all my clients. I call them the three “P’s”. The first “P” is the product. Is it missing some equipment you need?” (Wait for their response, then ask,) “Is it the wrong color?” (Wait for their response, then ask,) “Does it have stuff you don’t want?” (Wait for their response, then ask,) “Anything at all wrong with the car itself?” (If so, we simply switch them to a unit that better fits what they’re looking for. If not, we proceed with:) “Maybe it’s the second “P” which stands for the “people”. Is it the dealer location that’s hanging you up?” (Wait for their response, then ask,) “Is it our service hours?” (Wait for their response, then ask,) “The dealership’s reputation, is that what’s wrong?” (Wait for their response, then ask,) “Is it me, did I do something to offend you?” (If so, we simply introduce them to someone else. If not, we proceed with:) “Then it’s got to be the last “P”, either the payments or the price. Which one is it?”
k. (If the objection is “Pray about it”:) “That’s neat! I don’t hear that very often. You folks are a devote couple, huh? You pretty much go down the path the Lord leads you, right?” (Wait for their response, and then say,) “Listen folks, (we simply list the selling points we’ve already established with our prospect here) you’ve found the car you’ve been thinking about for six months now, equipped exactly the way you like it, in the color you didn’t even think you’d be able to find, at the store that’s closest to your home, and with a salesperson who takes care of her clients for years after the initial purchase. All that and we even got it to fit into your budget too! Isn’t it possible, folks,” (Pause…) “isn’t it possible that’s why He led you here in the first place?”
Next month’s objection will be: “I don’t want all this back and forth stuff.” We need YOUR input! Please forward your ideas on this one, or your suggestions on which objection to cover next, to firstname.lastname@example.org.
“In all human affairs there are efforts, and there are results, and the strength of the effort is the measure of the result.”
Lessons We Can Learn From Geese
Fact 1: As each goose flaps its wings it creates an “uplift” for the birds that follow. By flying in a chevron or “V” formation, the whole flock adds 71% greater flying range than if each bird flew alone.
Lesson: People who share a common direction and sense of community can get where they are going quicker and easier because they are traveling on the thrust of one another.
Fact 2: When a goose falls out of formation, it suddenly feels the drag and resistance of flying alone. It quickly moves back into formation to take advantage of the lifting power of the bird immediately in front of it.
Lesson: If we have as much sense as a goose we stay in formation with those headed where we want to go. We are willing to accept their help and give our help to others.
Fact 3: When the lead goose tires, it rotates back into the formation and another goose flies to the point position.
Lesson: It pays to take turns doing the hard tasks and sharing leadership. As with geese, people are interdependent on each other’s skills, capabilities and unique arrangements of gifts, talents or resources.
Fact 4: The geese flying in formation honk to encourage those up front to keep up their speed.
Lesson: We need to make sure honking is encouraging. In groups where there is encouragement the production is much greater. The power of encouragement (to stand by one’s heart or core values and encourage the heart and core of others) is the quality of honking we seek.
Fact 5: When a goose gets sick, wounded, or shot down, two geese drop out of formation and follow it down to help and protect it. They stay with it until it dies or is able to fly again. Then, they launch out with another formation or catch up with the flock.
Lesson: If we have as much sense as geese, we will stand by each other in difficult times as well as when we are strong.
“Individual commitment to a group effort–that is what makes a team work, a company work, a society work, a civilization work.”
Upcoming Public Events
Retail Automobile Sales: The Professional’s One Day Workshop
“Michael Hargrove was a wealth of information, sincere, genuine, and truly motivated by our own individual success. It’s a great workshop.”
Eric Uebelacker, Friendly Chevrolet – Sales
“Finally, I have heard a valid, understandable, method to build a referral with business with customer advocates. Now it’s just a matter of using it! Thanks, Michael.”
Michael Ruane, Infiniti Tacoma – Business Manager.
“I enjoyed the interaction with the role playing with Michael. The tips about marketing and building a referral base were especially helpful. New closing techniques are always needed and Michael presented new ideas I will use starting tomorrow.”
Trish Montoya, Infiniti of Tacoma – Salesperson
Date(s): May 17th & 18th, 2011
Location: Best Western Tacoma Dome Hotel
2611 East E Street
Tacoma, WA 98421
Date(s): July 12th & 13th, 2011
Location: Embassy Suites Hotel – Seattle North
20610 44th Ave. West
Lynnwood, WA 98036
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