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Do all negotiations have to end in a 'win-win'?

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Do all negotiations have to end in a 'win-win'?

This article by commercial tire sales expert Jason Miller is the second installment in a multi-story series about successful commercial truck tire selling. In this installment, Miller asks, “Do all negotiations have to end in a win-win?” His book, “Selling by the Numbers,” is available from Amazon.com and other online booksellers. For more information about Miller and his company, TheTireConsultants, visit www.thetireconsultants.com.

As I look back on all the negotiations I’ve been involved in over the years, there are two real estate transactions that I cannot get out of my mind.

The first took place while my wife and I were living in Phoenix during the dot-com bust. We listed our home for sale and moved to Chicago, where we bought another house.

Since we were making payments on two houses, we were highly motivated to unload the Arizona property. Unfortunately, the area had lost a lot of tech jobs and the real estate market had tanked. It was a buyer’s market and people were making ridiculously low offers. Months later, we accepted one just to stop the pain. It was a successful negotiation for the buyer, but not so great for us.

Years later, we bought another home in Arizona. Housing was still reasonable and we were able to buy a nice home at a fair price. Then the market soared. We listed the house with a realtor and sold it for twice the amount we had paid for it. Unfortunately for the buyer, the market was at its peak and fell weeks after the closing. That was one great negotiation for us, but not for the buyer.

Over the years, my wife and I have bought and sold numerous properties. Overall, I would say we’re batting .500. Each sale was a simple transaction and each had at least one winner. If there was residual animosity between parties, it was a non-issue since the two were unlikely to meet for a second transaction. These real estate deals were simple transactions; they were secured even if the relationship was destroyed.

When you’re selling tires to fleets, it’s not the first sale that poses concern — it’s the second and all subsequent sales that are problematic.

Pushing, urging or coaxing a prospect into a decision that they will later regret will jeopardize future transactions. When you are relying on repeat business, you must secure the relationship even if you don’t complete the transaction.

No interest, no negotiation

In the real estate transaction, the relationship is with the product. Buyers develop a relationship with the house as they visualize the memories they will be making there. Sellers are severing their relationship with the house. They are closing a chapter and moving on. For both buyer and seller, the negotiation is a brief, sometimes painful episode that must be endured as they turn the page.

In fleet tire sales, the buyers and sellers don’t develop relationships with the product. Rather, both parties are entering into a new, long-term and very personal relationship with each other. The tire salesperson helps each customer succeed at managing their highest maintenance expense so they can provide a livelihood for their families. In return, the salesperson depends on commissions from his or her customers to provide college tuitions, family vacations and more. Their lives are deeply intertwined.

Like any long-term relationship, it must be fair and equitable. If it’s only good for one, it will not last.

Before you talk about features, benefits and price, you must make sure that your prospect wants to do business with you. Years ago, I was given a chance to sell tires for a manufacturer in a great market in the southern U.S. The position was open because my predecessor had gone AWOL. Prior to his disappearance, he managed to break every promise he made to every client in the market. I walked into a hornet’s nest. Negotiations were a non-issue. The buyers told me I could not give them our tires!

It took months of persistence to crack the door back open with these customers before I could earn their business. My first task was to prove that I was someone with whom they would form a relationship. The lesson? If there is no interest, there is no negotiation.

Finding common ground

Common ground is the overlap between the seller’s rock-bottom price and the customer’s top price. Negotiation is the process of finding a point between the two that makes both parties comfortable. If the customer’s top price is far below the salesperson’s bottom price, there is no common ground.

This is the most common mistake made by inexperienced salespeople. They get in front of the buyer, exchange a few pleasantries and start selling. The buyer cuts them off by saying, “Show me a price and we’ll see what we can do.” Mistaking this for genuine interest, the salesperson leaves to work up an aggressive quote for a buyer who never even said he or she wanted to do business.

This doesn’t mean there is no chance for a sale. But with no relationship in place, the pricing will have to be very aggressive — so cheap that the customer cannot possibly refuse. Since the salesperson’s price is probably more than the customer is willing to pay, the buyer’s response will be predictable: “Your price is too high.” Of course, it’s too high. You’ve asked the buyer to tell you how much he’s willing to pay for something he never said he wanted in the first place. This leaves the salesperson two options: lower the price or “sell” the customer up to his price. This is not negotiating.

Without a relationship, your customer does not consider you part of the value proposition. With no reason to believe you can do anything more than deliver a tire, they focus solely on price. Even if that’s never said overtly, it’s laced throughout the discussion.

If there is no emotional attachment, the buyer will shop for the lowest price.

Reading your customer

Years ago, my wife and I went shopping for a Siberian Husky. She found a number of local breeders, one of which had a litter that was ready for sale. We called to ask about price and were told the dogs ranged from $400 to $700 each. That was what we were expecting, so we headed out to see them. (Of course, we were thinking about that $400 puppy!)

When we arrived, the breeder let the dogs out of their cage. Most of them sniffed around, exploring the area. However, one came bounding up to us, wagging its tail.

“What a cute dog,” I remember saying. I asked the breeder how much the dog cost. This was now a $700 puppy! We took the bait. As a seller, you always want an emotional attachment before you discuss price.

How do you know if you’ve engaged a prospect emotionally? Here are a few non-verbal signs that may indicate how he or she feels about you and your proposal:

1. Rapid blinking. If your prospect suddenly starts blinking their eyes rapidly, they are uncomfortable. This also may be a sign they are going to end the sales cycle. You may want to slow down.

2. Head tilt. People do this when they hear something that catches their attention but they’re not sure what they heard. You now have their undivided attention, so your next move better be good.

3. Drumming fingers. We all know what this means: your prospect is becoming impatient. Get to the point.

4. Removing their glasses. This is often a sign that your prospect is no longer engaged in the conversation. Take this as a cue for you to wrap up.

5. Looking over their glasses. If your prospect tilts his or her head downward and looks straight at you, he or she is showing disbelief. Your prospect wants to look into your eyes to see if you really believe the claim you just made.

6. Leaning back in the chair. This is a good sign if you’re trying to make the prospect feel comfortable dealing with you. It’s not a good sign if you’re going over a detailed document that requires understanding.

7. Looking at their watch. Do I even have to explain this one? However, you would be amazed how many salespeople miss it.

Because these clues are non-verbal, never negotiate over the phone. You may pick up clues from voice inflections, but you’ll miss the facial and body movements. E-mail negotiation is even worse. Not only do you lose voice inflection and non-verbal cues, the buyer has an opportunity to review his message to gauge how it might sound to you before he or she sends it.

Remember, without a relationship, your customer does not consider you part of the package. You are personally not adding anything to the equation. You never get to know the buyer and all of the daily pressures he or she is under. You cannot make the sale without first establishing the relationship.    ■

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