High Performance Negotiating
by Mark Tewart
One of the industry buzz themes being pondered by many dealers today is One Price Selling. The verdict is out so far as to whether one price selling works in the long run or not. Most dealers, understanding the highly competitive nature of their business, are not willing to risk their business for the latest possible fad. Most sales people, when they first began selling, had a negative view of the typical negotiating process. After a while, if the salesperson grew thick enough skin, they stayed in the business and learned how to manipulate the system to be able to make sales without being too confrontational with the customer. However, most salespeople still do not feel comfortable about the negotiating process and how it makes them, as well as their customers feel. Negotiating can be done professionally, in a non-offensive manner for all parties. A dealership does not have to choose one price selling to improve the professionalism of their purchase process. Changes can be made to the traditional process that will allow a more professional, less confrontational approach to negotiating that will improve gross profit, CSI as well as salesperson satisfaction with the process.
The first choice that should be made, is whether you will have a desking system. The desking approach to the process was created to remove the salesperson from the decision process and allow the manager, being an unemotional, more experienced and higher skilled person in negotiating, to facilitate the negotiating process. The desking process was also created to utilize the maximum effect of the, Higher Authority Technique of negotiating. Simply put, the Higher Authority Technique allows the salesperson to always check with the manager for approval on any deal. Thus, protecting the dealer from mistakes and creating a negotiating process for more gross profit.
The problem with the desking process is the overuse and manipulation of the High Authority Technique. Customers are much better educated about buying vehicles today and this leads to confrontation when they are confronted with the overuse of the back and forth game. If a dealership is small enough in volume and has a well trained sales staff, eliminating the desking approach entirely may be an option. In the next five years, many dealerships will begin to move towards this approach to maintain their customer base and retain employees. Salespeople will have PC’s at their desk and will quote prices and payments and have authority to make deals. Some dealers and managers probably had a heart attack after reading that last paragraph. If you are one of those people, and do not wish to be a trail blazer, use a hybrid of your traditional system and a newer approach. Create questions from the desk that emphasize relationships and the customers wants, needs and though process more than financial data. Many desk managers start out the deal process with financial data questions which trains the salesperson to do the same with the customer. Thus, the usual fear and distrust begins to set in for the customer. When a desk manager starts every deal by asking the salesperson, where do they want their payments, down payments, and what will they do business at today, we have set the wheels in motion for confrontation. What can the manager possibly learn about the customers wants, needs and hope for gain with those questions?
When a desk manager does ask financial data questions, they should emphasize questions in regards to the customers patterns. The Law of Familiarity tells us that people tend to do what they have done and have felt comfortable with in the past. Find out what made the customers buy their present vehicle and what they used as a down payment, and what their current or last payments have been. Finding patterns will be better information than asking people to low ball you by asking them where they want to be.
Proper training of salespeople in proposing deals, as well as negotiating, handling objections and closing will remove a tremendous amounts of the back and forth of negotiating. A dealer or manager must be willing to give up control to gain control. Stop the dummying down of your salespeople and have the courage to train them properly and empower them to do the right things, as well as make a mistake now and then. If a dealer were to look closely, they might find their sales managers are not much better skilled in the areas of negotiating and closing and need the training as much as the salespeople.
The specific ways to improve your desking system are too lengthy and detailed to cover all of them in this article. However, beginning to evaluate your current process and talking about improvement is the first step. I invite all dealers and managers to invite change and be leaders in the process of making automotive sales more professional for all of us. One of the best ways to improve, is to change your current desking approach. Your salespeople and customers will love you for it and you can actually make more money by changing the current process.
© Copyright 1999 Tewart Enterprises, Inc. All rights reserved. Used with permission.
Mark Tewart is the President of Tewart Enterprises Inc., a training and consulting company and is also a partner and National Marketing Director for Symeron LLC, an automotive computer company. Mark is a keynote speaker and has had top ranked programs on ASTN (Automotive Satellite Training Network) and is a featured article writer for Dealer Magazine, Wards Dealer Magazine and JustSell.Com as well as being a contributing author to a book titled, GenderSell – Selling To The Opposite Sex. Mark also provides sales and management seminars internationally.
You can contact Mark at:
Mark Tewart, President
Tewart Enterprises Inc.
1999 Kirby Rd. #100
Lebanon, OH. 45036
FAX 513 934-4588