In Part 1 of this two-part series, I described the the Rules and Realities of the retail sales environment. In this post I will present the Keys to the Kingdom of retail sales negotiating. Before any Sales Professional (SP) attempts to use these Keys she need to both understand and respect the Rules and Realities of the retail environment. If you haven’t already, follow the link above and read last week’s post to familiarize yourself.
To give yourself the greatest opportunity for success when dealing with a customer whose focus is paying less than ticket price, I offer these negotiation Keys. The more these Keys are utilized, the more effective the negotiation. These Keys are WHAT you should do. Your experience, the customer and the situation will dictate HOW you implement them.
As you’re building rapport (and the ticket) you should be gathering as much information about the client and her situation as possible, including:
- phone numbers
- delivery dates & requirements
- desired method of payment.
- expectations of price “fluidity”.
- the reason for today’s purchase
I refer to these data points as the “ammunition” needed for the upcoming price negotiations. If you get to the critical moments in the conversation without any “ammo” the first rule of retail negotions should come to mind: Rule #1.
Negotiating Rule #1:
Whoever has the most information will most likely “win”!
All this information will provide leverage points for you as you go forward. Also, a customer’s reluctance to share any of this information with you should raise a red flag on the seriousness of the client or your proximity to a close!
Give Hope not Promises
No matter what form it comes in, there will be a moment at the beginning of every sale where the customer will probe your pricing policy. Your job will be to give hope, but no hard and fast information that will limit your options later in the sale. For example:
“Depending on the size of the sale and your particular situation, there are opportunities to save. Once we know what you are looking for I can make sure you get all the savings you qualify for.. Is that fair? In the mean time…
…What Else Do You Need Today?”
Like every fast food restaurant cashier, your job is to find out everything that customer wants/needs prior to discussing price! If the customer stalls, revisit the “Give Hope” Negotiation Key: “I know that in the past the manager has taken care of people with a ticket a little larger… are you sure there’s nothing else you need or want?”
Never give two offers in a row
Of all the Keys, this could be the most important. Your first offer needs to be the complete, delivered price. Put in the merchandise, accessories, connection kits, protection plans, taxes, delivery charges, inspection fees… All of it! As the saying goes, you won’t be able to get the customer to re-open the wallet, so don’t leave anything for “later in the sale.”
Whether it comes as a question (“What are you gonna do for me?”) or as a statement (“I’m not paying that… Get me your best price!”) the negotiating customer will start the game. What is REQUIRED of you at this critical stage is getting the customer to counter your ticket price.
The reason getting the customer to give you his initial offer is the most important of the Keys should be evident. You are working against yourself with back-to-back offers. Offering a counter-offer to your own first offer is, for all intents and purposes, doing your customer’s work for them. Whether the customer’s counter-offer is absolutely outrageous or perfectly acceptable, what’s important is that the customer has proven that he is serious by engaging.
Always defer to a “higher” authority
NEVER imply that you can lower a price. Connect pricing to some point in reality (Finance Pricing vs. Credit Card Pricing, Sale Price Dates, etc.)The moment you begin giving pricing, the customer will encourage you to give your best price… then ask for the manager to give them a “real” deal! (Remember: Customers don’t care about your profit margins or your feelings.)
Regardless of the actual relationship with your “higher authority”, always give the impression that this is a busy person who is not to be disturbed with trivial matters. If the customer’s initial offer is obviously unacceptable, this is your opportunity to get the client to increase his/her offer or eliminate items to get to a more reasonable counter offer.
Shut Your Mouth
There is a delicate balance you are maintaining at this point. If everything has gone well, the customer has been looking to you to be a liaison to your “higher authority”. You worked up the total delivered price as an offer. The customer made his counter-offer, you had a manager run the numbers and you are now presenting your best and final offer.
Now is the time to use all of the information you gathered throughout the conversation to your advantage. Remind the customer of all the things they value: colors, sizes, delivery times, stated budgets, payment options, etc. Finally recap the savings that are being offered and then give the customer a few minutes to digest all that you are offering – then Stop Talking! Let the customer reach process and make a decision.
At some point you’re going to get to the crossroad where there is nothing more that you are willing and/or able to give to the customer. This is where negotiating Rule #2 comes into play:
Negotiating Rule #2:
If you are afraid to walk away from a negotiation you have already “lost”!
“We have gotten to a place there is nothing more that I or my company is able to do. At this point it is up to you. If this offer makes sense, great! Let’s proceed. If not let’s shake hands right now and agree that this is not going to happen. How would you like to proceed?”
There is a lot to work with here. Do not try to completely overhaul your process, but rather examine it and determine if applying any of these Rules, Realities or Tools can improve your business.
Think about your last few client interactions and ask yourself a few probing questions. How much “ammunition” did you have going into the negotiation? What impressions did you give the client? How did the client let you know the pricing wasn’t acceptable? How did you react? When did you bring in a “higher authority”? What could you have done differently?
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