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Recently, in a meeting I was hosting with some advanced sales managers (advanced simply meaning time in the job not necessarily skill level) I asked; What is the difference between a haggler and a negotiator? You could have heard a pin drop in response. I finally offered the answer; about $100,000 a year! That got their attention.
Negotiating is not a talent but a skill, acquired through instruction, training and practice. Our entire ego-driven industry likes to think of themselves as "born salesmen" with nothing but talent and wit, "old school", seat-of-the-pants swashbucklers that desperately cling to the days gone by. Go ahead! Ask your manager where he or she learned to negotiate? Their answer will confirm my assertions. In reality we, as an industry are a bunch of hagglers with no grounding or skill in basic negotiations.
I realized very quickly that the group in front of me was no more equipped to negotiate a car deal than were their salespeople because, after all, none of the "advanced" managers were properly trained nor fairly educated before they ascended to their role of Sales Manager.
Ask any manager what their negotiation system is and they will tell you Four Square. Fred Flintstone bought his first car using Four Square! It might be another way to say "how to give all the gross away!" This archaic, misunderstood and never executed properly process is about all any sales manager seems to have in his or her bag of tricks which is not serving you well.
The first rule of Professional Negotiations is; be the first to deliver the selling price yet in virtually every store we do just the opposite! In fact your Desk Managers are the biggest part of the problem! Desk Managers, well meaning I am sure, are by far the most destructive force in your dealership.
They ask questions like:
1) What have you got?
2) What payment did you discuss?
3) How much did they want for their trade?
4) What did the other dealership say?
5) What is their budget?
When I was in sixth grade at St. Joseph's Sister Thelma always said there are no stupid questions! Wanna bet? Everyone of those Desk Manager questions allows, nay, guarantees that the customer will be in complete control of the negotiations! We violate the first rule of negotiating by allowing such ridiculous and lazy questions to be asked by Desk Managers and we can never win from there.
Cleverly we have blamed the poorest in history gross profits on the internet, the factory, competitive markets, leasing ad nauseam, ad infinitum. While all nice and neat excuses they are simply excuses for a lack of skill development, lack of training and a lack of desire by all parties concerned.
Can you and your dealership continue to absorb the enormous costs of poor negotiations much longer? Imagine if you actually had a negotiation strategy at your store that is carried out on each and every sale? Imagine your staff being competent and capable of actually closing high gross deals HONESTLY and without any fear of unwinding a deal? Imagine getting paid a fair profit for a fair sale?
They say there is one tide that will lift all boats in a dealership and that "tide" is gross profit which can only be earned through negotiations. Honestly, is your staff prepared?