What is the one thing that every sales person would love to hear during a negotiation? Wouldn’t we all love to have the prospect say? “I need you, more than you need me.” It is really nice to have the power
Dealing from a position of strength tops the list, doesn’t it?
All of the sales techniques and processes preach to us the common theme of, creating a need, and then matching those needs to the products or services you sell. You want to do such a good job, that the only solution is your company, right? Well yes you do, that’s a no-brainer. However, before you put the screws to the customer you need to be careful and take into consideration the customer’s position.
Having the ultimate solution, or product, must be one of the greatest feelings of all. During the summer of 1983 I worked in automotive retail (yes, I was a car salesman). I was fortunate to be working at one of the largest Dodge dealerships in the area. We were awaiting the deliveries of our first Dodge Caravans for sale, and in our position of being the largest; we were going to have the biggest selection for sale in the entire area.
Back in those days, we were paid on the profits we could earn for the dealership. When the announcement of this vehicle was made, the consumer interest was the highest we could ever remember. This dealership would get nearly double the amount of Caravans as anyone in the area, therefore our commissions this year would be huge!
Hot August Day
It was mid-August, and I was roaming the lot waiting for the next customer to come into the dealership. I watched as a trailer full of vehicles drove into the lot, and I saw the first Caravan sitting there. I knew that this one was our first for sale that had not been pre-ordered. We were all under strict orders to wait until the car hit the ground before we sell it. Well, lo and behold, there was a customer following this truck from dealer to dealer waiting for that vehicle to be unloaded. I am sure they were praying that it was for sale. This was their lucky day, as well as mine.
To make a long story short, I was the lucky sales person. This customer was the person influenced to spend $2,500 over the sticker price in order to take it home that day. The negotiation was brutal, and the dealership made sure they let the customer know that there were 100 people in line for this vehicle and the ones that would come in. If they didn’t want to spend the money, someone would.
What we didn’t know then, was that out of the 100 or so Caravans we sold at these huge profits in that summer of 1983, only 2-3% of those people elected to buy cars from us in the future. The normal retention rate for our dealership was well over 80% at the time, but the way to we treated our position of strength put a very bad taste in our customers’ mouths. When they had a choice in the future, we had no chance at winning their business. We couldn’t rely on having a new introduction like the Caravan every summer. Therefore, future commission checks were very low compared to that wonderful summer.
Today’s lesson in negotiation is not that we made too much money at the dealership. We had every right to earn whatever we could, that is what premium pricing is all about. The lesson is how we treated the prospects.
We treated them with the attitude of; “we don’t need you, and you need us.” When you are in a position of strength, it is not wise to use that as your only negotiation position. You still need to sell the benefits of working with your company or firm, and actually acknowledge the fact that under different circumstances the buyer is in a better position. Customers, employees, partners, or whoever you are negotiating with, need to feel that they are valued for more than the current transaction.
Another way to say this is that in the end, you need the customer to “want to buy from you”, not one that is forced to. If that buyer is given an opportunity to make a choice in the future, you want them to come to you and allow you a chance to earn their business. Arrogance in any given situation will be met with some form or animosity or lack of respect. As a professional sales person, you need to realize this and continue to earn that respect.
When you find yourself in that position …
Someday you will be in that once in a lifetime position of rolling out the World’s best new “mousetrap”. Before you do, understand that you need a pricing and marketing strategy to promote the product, while protecting your image.
As always, if you are in need of this type of advice give us a call at Pinnacle Sales! Our motto is that our Service is Above the Rest for a reason, and you will be happy to pay the premiums we charge.