A quick word first
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How it works
Why would somebody who teaches negotiation and writes books about it, too, (that would be me, incidentally), sell his car to CarMax when their iron-clad rule is NO BARGAINING?
Curiosity was a big reason. I wanted to see what this unconventional process is about. I’m also tired of the standard auto dealer puppet-show. Like the “I have to check with my manager” gambit. Or the last-minute attempt at adding a “doc fee,” $325 dollars for writing up the bill of sale and handing over title to the car.
And there was a third reason. Who knows? Maybe they’ll make me a good offer.
On the first item—curiosity—I learned a bit and am eager to learn more. (If you’ve done no-haggle negotiation, please share your experience with a comment here.) As for the second, courtesy, I was well satisfied. The people I dealt with were genial, not pushy in the slightest.1
My big takeaway is that CarMax actually does negotiate. True, they don’t haggle over price, whether they’re buying (as in my case) or selling (in the case of whoever now has my old car). But they do negotiate the relationship. They do that subtly and very well. As for where we ended up, I’ll get to that, but let me explain the process first.
First of all, their no-haggle policy gets people in the door who loathe haggling. Once I was inside, the staff I met were warm and welcoming, either by inclination or training. I hadn’t made an appointment, but an associate was assigned to me. He’s a college kid who works there part-time. (Call him MG, as he loves vintage cars.) He ushered me to his desk and we chatted while my car was being inspected. I learned what courses he liked at school and we talked about sports, too.
Ten minutes into the conversation, he casually asked about what I was thinking of buying as a replacement. I don’t know if he caught my smile, but I was thinking, “Here we go.” I mentioned a few possibilities, and he swiveled his monitor so I could see the prices and what was available on that lot and elsewhere. I kept waiting for him to give me a pitch, or even a recommendation, but neither ever came.2
A while later I caught myself checking the time. This had been pleasant enough, but it had taken longer than I expected. Perhaps the technicians simply were backed up. It occurs to me, though, that with a vast data set maybe CarMax has found that extending the process, having customers invest more waiting time may make them more willing to give them a “yes” when they finally learn the offer. (A sunk cost trap, of sorts, justifying the effort they’ve already invested.)
When the report came in on his computer, MG artfully presented the information, again sharing his computer screen.
First, he showed the history of the car. The prior owner had been in a fender-bender (literally), though the damage had been repaired. Then various scratches and dings were listed. All of this, of course, was likely designed to remind me that my vehicle was in less than mint condition, and thus lower my expectations. Then MG stopped scrolling and gave me a warm smile, like a magician about to pull a rabbit out of a hat.
“Do you want to see the offer,” he asked. I smiled back, recognizing that as a sly question. Of course I wanted to see the offer. That was the whole point of my being there.
So, what did he want by asking that?
Just speculating, but my guess is that before scrolling the screen to reveal the number, he wanted me to practice saying the word, “Yes.” The power of suggestion, if you will, making me more inclined to say yes when the actual figure appeared. Maybe MG, as young as he is, is a born salesperson. Maybe he was well-coached. Maybe both.
I could be reading too much into this little dance, but consider the choreography.
MG and I had been talking informally for more than half an hour. But when we finally got down to business, he was not the one who gave the offer. Instead whatever number CarMax’s algorithm had generated would appear on the screen of the computer.3 But with no access to the keyboard, there was no way I could counter-offer.
Why it works (with me at least)
At last the number did pop up. I had done some homework, but it was 50 percent higher than I expected. And we weren’t quite done. MG said, “That offer’s good for one week.” That was a surprise. Quite the opposite of an ultimatum or an exploding offer.
Why does CarMax make an offer that customers can then shop around for a better deal? My hunch is that it’s part of their larger strategy of making its process distinctive. The implicit message is: “No pressure, no game-playing. We’re being fair with you .” They want to induce people like me to reciprocate.
And that’s exactly what I did when I said, “Sold.” There was no point in dickering. I signed the papers, handed MG the keys, and called home for ride.
Here’s the larger lesson. Whatever you’re negotiating, whether you’re a buyer or a seller, it’s often about more than just the numbers. How you engage with others—how you negotiate even a brief relationship—will affect, for better or worse, how they view whatever it is that you offer.
The atmosphere that you create, your tone of voice, the tactics you do and do not use, even your expression, those all matter when you’re trying to get to yes. CarMax seems to have figured that out.
Housekeeping
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This is not a testimonial. I’m a data point of one and CarMax is a nationwide company. Other people may not have had as good an experience as I did.
Apparently as a matter of policy, Carmax employees aren’t paid on a commission basis.
Again, with its nationwide data set, it can calculate the right price, whether it is selling or buying, and not be either too generous or two stingy.