HOW TO NEGOTIATE YOUR WAY TO MORE CUSTOMERS AND MORE PROFIT
Updated: Aug 17
“How much for cash?” “Can you match my lowest quote?” “What’s your best price?” These questions we come across all the time, but there is a better way to deal with them other than telling the customer “No, I can’t do it cheaper, sorry” – (And that’s putting it nicely)
Every day we get angry at these types of customers, but getting angry blinds you to the fact you’re angry and loses you potential income and customers.
Among all these customers is an opportunity, an opportunity to repair their car, and increase your business.
We researched the top techniques from the most credible industry leaders in negotiation for business and life.
1. Get your customer to say “no”
“No” sets boundaries, makes people feel in control, especially when it comes to your customers, which is important because the likelihood is, they weren’t in control when their car got damaged.
So when they try and barter with your price, ask them a simple “no” question.
“Do you not want a good repair on your car that lasts?”
“Do you want to have to pay for the job again in 3 months’ time?”
“Do you really want to risk using someone who won’t be around in 6 months’ time?”
The key point to note in all these techniques is the right tone of voice which shouldn't be aggressive or condescending, but friendly and firm.
2. Ask calibrated questions
What’s a calibrated question? It’s a question you ask which has an open-ended answer, rather than just a “yes” or “no”.
Your customer has just asked if you can bring the price down, but the price is the price for a reason.
You’re trying to build a sustainable business, use good products, pay yourself a wage, cover your overheads, afford a pension, take holidays and charge the right amount of time.
Lowering that price doesn’t seem so appealing now does it?
Nor should losing a potential customer.
After they have asked you in some shape or form to lower your price, pause.
Wait at least 4 seconds.
Now ask a calibrated question, such as:
“How can I go lower when I've given you my best price?”
“How much of my price seems unreasonable?”
"How can I do it for that price without lowering my standards?"
These type of questions gets your customer to use more mental energy and ultimately helps them to think the decision they’re about to make is their own.
If the customer responds by sticking to their bartering, ask another calibrated question.
"My estimating app has generated this price quite accurately based on my rates and material costs, how am I supposed to do it cheaper without losing money?
Different customers are driven by many different things, but most just want a good job, for a fair price and feel like they’re not being ripped off – for some people coming to you is a very daunting task especially if they have come to you without being recommended by anyone.
So remember when they’re trying to barter with you, it’s just a defence mechanism most of the time, not a personal attack on your business, if they understood how much things cost – they wouldn’t try to negotiate.
Acknowledge your customers' situation by saying something along the lines of:
“I understand you may want to get some more quotes elsewhere before making a decision”
“It looks like you might be hesitant about the price I just gave”
"It seems you want a fair price and a good job on your car"
Empathising does two things, you’re recognising their emotions, makes your customer feel understood and important.
4. Don’t rush
When we’re in too much of a hurry people can feel like they’re not being heard and undermined.
It doesn’t build rapport and doesn’t build trust.
So take your time with the customer, listen to what they have to say – after all 5 minutes for what could be a job, which could then be a referral, which could then be a contract should always be worth it.
You may already know this but mirroring people is a great thing we do as humans when we are connecting, it can be done with speech, body language, vocabulary and tone of voice.
So try and mirror back to your customers to show you’re on the same page and they’ll appreciate it – you may even do it without noticing.
It’s important to note most communication isn’t what you say, it’s how you say it, so pay attention to your voice.
When talking to customers, have a nice laid back, friendly tone that will ooze confidence in you and your business.
I hope these techniques serve you all well, and although not every potential customer will book in with you, and maybe some you want to avoid anyway, there’s an untapped market out there that your competitors are ready to jump on.
Fact: As a group, Millennials are willing to spend the most (21% additional!) for great customer care.
Lastly, there are 3 types of yes:
Counterfeit yes - Customer says yes, but plans on saying no later.
Confirmation yes - Simple yes but no promise of action (not leaving a booking deposit).
Commitment yes - True agreement that leads to action (such as leaving you with a booking deposit) this is the one we are aiming for.
Luckily SMART Estimator app allows you to make note of a customer deposit, not only that but once you have worked out your rates within the app and your customers see you using a systematic and methodical estimating process, there doesn't leave much room for argument as you have worked everything out to a tee.
"My estimating app has worked it out quite accurately to give the best price - how am I supposed to go lower?"
Remember, negotiation makes conflict more meaningful, it has the ability to make your business more productive and change your life.