First a quick word
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I may seem to be giving car salespeople a hard a time. Earlier this week it was in my article “How to Dodge a Hardball.” Back in October it was about the “Bait and Switch” ploy. On the other side of the ledger, though, I did give a cautious thumbs-up to those dealerships that are experimenting with “No Haggle-Negotiation” for both sales and trade-ins.
Here’s a bit more empathy. Selling cars can be a tough job, often as stressful for the salespeople as it is for us customers. You might think of this as a simple two-party negotiation, but it’s actually much more complex.
I discovered that thanks to an entertaining—and instructive—episode of NPR’s This American Life. Somehow, one of their producers persuaded the owner of a Jeep dealership to record conversations with members of its sales team who were trying to hit their monthly quota. It’s dramatic, instructive peek at behind-the-scenes negotiations. Take a listen when you have a chance.
In the salespeople’s voices you can hear the stress that’s growing for everyone day by day. There’s the pressure on the general manager to move 129 cars in October. If he can hit that target, the dealership will get a bonus from the manufacturer between $65,000 and $85,000, depending on which models they sell. But if it sells 128 cars, just one less, the place won’t get a penny. That one-car difference determines whether it’s in the black or in the red for the whole month.
While Chrysler-Jeep is squeezing the dealership, Freddie Hoyt, the general manager is pushing his salespeople. Things aren’t going well this month. At a weekly sales meeting he tells them:
“I watch you guys in there. All on your computers, going to different websites, chilling. Dude, get on higher gear. This is no joke. I've got to be at that number, or I'm telling you, I'm not going to be a nice guy. So put your nose right to the ground and come out shooting today, everybody.”
Then there are the salespeople. Their quotas vary from person to person, depending on their base salary. There also are bonuses for hitting mid-month goals. At the point where the audio begins, a few people are doing well. Others are struggling.
Think about the consequences. If you’re a customer your negotiation success can depend on how well the person who’s pitching you is doing. If you’re lucky, you might even get a car for less than the dealership paid for it, if that will cement the manufacturer’s bonus.
It's even more complicated. There also are negotiations among the salespeople. If you and I are on the team, and you’ve gone comfortably past your monthly quota, I’ll crawl and beg you to credit me with any further sales that you’re able to land. I imagine that you’ll expect something from me in return, however. (Maybe cash in an envelope?)
Two important takeaways here. First, it’s easy to be so absorbed in our own anxiety about upcoming negotiations that we’re unaware of the stresses our counterparts may be feeling. Second, something that at first seems like a one-on-one negotiation is often part of a larger web of connected transactions.
With that fuller picture in mind, shopping for a car near the end of a month may land you a better deal—especially if you’re not in a rush.
Housekeeping
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