Let’s imagine for a moment you are a car sales person
working in a Ford dealership, selling new and used cars in
Wexford.
A potential customer walks onto the lot and is inspecting a
used Mondeo that had only come in last week, priced at
21,000 euro. Now you know that the bottom line you would
take on this car is 16,500 but you have been in sales a long
time and know not to give your bottom line upfront straight
away.
After giving the prospect a moment to get a feel for the car
you approach to engage in conversation.
You discuss the car, its upgraded car stereo and alloy
wheels and take the car along with the prospect for a test
drive.
15 minutes later you arrive back and the prospect says,
“Thank you very much. I enjoyed the drive, but it isn’t
really what I am looking for.”
But you had a feeling he liked the car so you probe further.
You say “What is it that you aren’t too happy about with the
car?”
He responds “The price. I couldn’t possibly pay anything
near to what you are asking for.”
So now you think you have a potential sale on as he has
expressed pricing concerns. But the prospect is sharp – he
jumps in and says “Thanks for your time. I enjoyed the drive
but as I said it’s far too expensive. But just so as to be
fair to you, what is the very lowest price you can let this
car go for?”
So now he has you in a position to find out whether you will
come down on price.
You say “Well, I guess if I speak with the boss, he may let
it go for 19,000 but that would be the lowest we could let
it go for”
So now the prospect has your price down. He turns around and
says
“That’s too bad. Based on the year, mileage and colour of
the car, I could probably go to somewhere in the region of
15,000 euro.”
So now the prospect has shown you interest in that he wants
the car, but will only pay around 15,000 euro. You are now
thinking about the bottom line value of the car. Remember it
was 16,500 euro. So now you are committed to the process.
You have spent nearly half an hour with this prospect on a
busy Saturday morning – you would love to get a sale from
him today.
So now you say “I will check with the boss, see if I can
come down any more for you”
You go away and come back a few minutes later and say “I can
let it go for you, only, at 17,000 euro”
So now you are only 2,000 euro apart.
The prospect negotiates some more with you, using decoy
gambits such as “Well, you know the colour is horrible.
He says “Look, tell you what, I can come up to 16,000 euro
if you can let it go for that I will buy it today”.
Now you are gritting your teeth… You are letting the car go
at below your bottom line! So you say “Let’s split the
difference, I can’t let it go for less than 16,500 euro, I
will lose my job if I do!”
So now he has you at your bottom line and this leaves you
with very little to no commission.
You have fallen for the classic Decoy and Time Pressure
gambit.
Did you spot where it was?
The prospect new what the value of the second hand car was.
He had done his research and discovered the car was in fact
worth in and around 16,500 euro. He bracketed his price
below the bottom line, indicating to you he was interested
in buying the car, but you would have to come way down on
your asking price.
He applied time pressure on you. You both had taken the car
for a test drive on what was a very busy Saturday morning –
taking up a lot of valuable selling time. Then he knew you
wanted to make the sale as you did in fact drop your price
several times. He figured you would just keep dropping.
Remember, you are more flexible in your negotiations under
these circumstances.
So how do you counteract this gambit?
Firstly, ask the prospect is the car for them – this way
they wont say they need to refer back to their partner for a
decision.
Secondly, if you do offer concessions, don’t fall for the
“What’s the lowest you can go?” You could say “Are you
trading something in?” Or “I could probably get you free RAC
or AA for a year, but the price is fixed” OR “I might be
able to come down on price for you, but that would depend on
how you are wanting to pay for the car”. Here you could push
your own finance options. If they want to pay cash you could
offer a 1,000 euro discount.
If they know the bottom line on the car, they will typically
quote you far lower than your bottom line. From this you
will know they have researched and know what you will let
the car go for. Then it is down to the prospect to build up
your hopes until he sees you will go to your bottom line.
Car
Dealer Sales Professionals
