The Art of Negotiation – Walking Out Method
In my free time over a week ago, I went to a friend’s wedding. While it took me away from the act of moving into our new home, it was a nice opportunity to relax and wind down for a bit. I don’t get many opportunities to do that much anymore. My wife was in the wedding, so I had to take up my time just hanging out around the hotel. At least that is what I thought. My sister-in-law and her fiance were also going to the wedding, so I did have the chance to hang out with them. As I was relaxing in my hotel room, they gave me a call and said they were going car shopping. Her fiance has been looking for a specific car and one was less than an hour away. We had quite a few hours to kill before the wedding, so I said I was in. On the trip down to the car dealership, I started thinking about the art of negotiation. No matter where you buy your car, there is always negotiating involved. Not being involved in the car sale, I was able to sit back and see how it is done.
The Sale Starts At the First Hello
Most of us have probably stepped foot on a car dealership before. No matter if the dealer is selling new or used cars, the act is still the same. You go around the lot looking for a car and then the salesman comes out to meet you. I have been to a few dealerships where the salesman were looking out the windows and hooking onto their prey (I mean prospective buyers) and never letting go. It can be dangerous out there. Salesman make a living by closing the deal. They can know how well the process is going to go from the first hello. It is up to you to make sure you get the best deal possible. Be prepared, act informed, and ask for what you want.
I was looking over the car before the salesman came up to the fiance. Since I know my cars and what to look for, he was happy to have me there. I didn’t want to impose, but when cars are in my presence, I have a natural progression when I look them over. The salesman stepped up and said hello and then shook his hand, along with my sister-in-law and my own. It is more relaxing knowing you don’t have to go through negotiating with salesman. I don’t like the process, but understand it well. I could tell the salesman knew a sale was imminent after he asked his first question. He simply asked if we were interested in the car we were looking at. Once he got the answer of “yes,” he knew the sale was on.
Never Give too Much Information
Salesman in any industry thrive off information. They can’t proceed with a sale without getting the right information. They also can’t do it without getting the right answers. There is a reason why you get so many questions during the negotiating process. They are vetting you to see what information they can get. The more information you give, they more they have to work off of. I am not saying be short with salesman, just give them precise answers.
While I tend to be very personable, I don’t give salespeople too much to work from. When they ask me questions, I form my answers in simple, yet short sentences. Salespeople probably think I am just being an ass, but I am being calculated. I never want them to think they have the upper hand, nor do I want them to think they have an “easy” sale. Dealing with me is never easy. Just ask my Realtor. When I am about to start negotiating with salespeople, I tend to keep a few tricks up my sleeve. One of my favorites is what I am going to describe next.
The “Walkout” Method
There is not too much to this method, but I have found it works quite well. When I am negotiating with salespeople, I will feel out how the sale is going and then use this if I am not getting what I want. No, it is not a whiny way or sad way to deal with not getting my way. It is a way to make sure I control the art of the sale. I have been a salesman before. I know when they are needing to close a deal and when they could let one slip away.
In order to make this method work, you actually have to be willing to walk away from the sale. For some, this is hard to do. Going through all of the negotiating and paperwork can be tiring. Also, some people love the thought of owning that “new” thing so badly, they let their guard down. I don’t handle sales in that manner. I typically go into a sale in a calculated fashion. I know the numbers I need and am not afraid to move on if I can’t hit them.
When my sister-in-law’s fiance was in the negotiation, I was outside checking out cars. I guess I can’t resist the urge. Time was getting close to when we needed to leave for the wedding, so I went back in. He was sitting at the desk trying to get the salesman to get to a specific number. He had a number in his mind that he wanted to hit. As he spoke to the salesman, he looked over and asked what I thought. The numbers were a little high for some of their fees, so I told him to ask for lower fees. This is what the salesman said.
Everyone else on this street charges this fee. We all charge it and it will be hard for you to find it lower.
This type of salesman irritates me. You are telling me that just because everyone else on the street is doing the same thing, then you are justifying it. I hate when companies do that. Running a successful business is all about doing something different. While you can sell the same product, you should do something different. Differentiate yourself from the competition. That is how you succeed.
I decided to call him out on this fact and he couldn’t even say anything. His eyes got wide and his mind started churning. It was great for me as I knew I caught him off-guard. When you do that, then you know you have the upper hand. I then told the fiance to just walk away if they are unwilling to match what you need. He told the salesman and all of the sudden the talk changed. He was working hard to make the sale work. He had to go back and forth to the sales manager to get the deal approved. After some time, it was done.
This is exactly how the walkout method works. You tell the salesperson you are walking out and see what happens. If they say OK, then you have to walk out. If you don’t, then you will never get a deal. They know they will have you. If this sale had fallen apart, then the fiance was willing to walk out. He knew he didn’t have to sign anything that day. He controlled the sale well and got what he wanted. This is the perfect scenario for the walkout method. As I said, I have used this method over and over again. I probably have a 95% success rate. This is why it is my go-to negotiation method.
Have you used the “walkout” method when negotiating during a sale?
Photo via reynermedia
I’ve used this exact method quite a bit, especially when buying cars. I think part of can communicate that you’re there on your terms and that you will buy/not buy when it’s up to you – otherwise you’re just opening yourself up to them trying to sell you on what they can “offer”. I’ve had the same level of success as well.
Lol- this is the reason I hate buying a new car! I feel like I have to be an expert negotiator, and I’m NOT the Priceline ninja.
I took a negotiation class at work one time and it was an interesting experiment. We were set up in groups of two and each person was given minimum terms that would make sense for a deal. Based on the provided terms- everyones deal could have worked out– but what we found is that negotiating is such an emotional activity that people were focused on winning “getting the absolute best price” that they failed to strike a fair compromise.
Anyway interesting post- I definitely have to improve my negotiation skills 🙂
Certainly a good method. I was interested in a car on craigslist a while back, but the price seemed high, I had asked the guy some questions on the phone, and told him my wife and I would discuss it later and let him know if we were interested. A couple days later he sent an email stating he would sell it for about 25% less than what his asking price was! We had actually decided to go with a different type of vehicle, but it is amazing what hitting the brakes can get you in a negotiation.
Love it.
Not only is it important to control the flow of information, but I’d also say that it’s important to not accept sales funnel premises that salespeople present. Once they get you into their sales funnel it’s very, very difficult to get out. I know….I was a salesman with a great funnel!
I learned about the walkout method in a negotiations class in law school, and I truly believe you have to convey that you’ll actually walk out. Any smell of a bluff and you’re in trouble! haha. I definitely agree that you really have to walk out if you threaten it. Great advice to share!
The walkaway is my favorite tactic in negotiations. I used the black markets of Shanghai to first start honing that craft. That and actually speaking in Mandarin really helped drive prices way down!
So awesome that you called that salesman out.
I love that you called the salesman out. You’re right, though. Everyone else is doing it, so it makes sense for you to join in? That’s not going to make your business stand out. I haven’t had to negotiate for much yet, but I have no issue with walking out if my price can’t be met. It’s best to be prepared and realistic before negotiating so you don’t get sucked into anything.
I’ve also heard salesmen say that this model sells so well, they never discount it. I hate haggling and will probably never buy a car from a dealer again. Although with my last car, I did leave and they called me back the next day with a better deal. I probably could have done even better if I wasn’t such a people pleaser and felt the need to answer questions correctly!
This is definitely a great method. I love haggling and have gotten great deals that way, but if my haggling doesn’t work I just walk out. Sometimes they say “good riddance” but sometimes they say “wait, wait!” It really doesn’t hurt to try. The worst that can happen is that you save money… wait did I say worst? I meant best.
LOL!!
It works wonders to do it!!
A few years ago I was refinancing a house I bought BEFORE I was married. I had just married my husband and wasn’t quite ready to put his name on MY house that I bought by myself. A lender had contacted me and was willing to lower my rate 4.00%. I said great. Let’s do it because I was not that far into the loan and was going to save a lot of interest over the life of the loan. When I got to the attorney’s office they immediately demanded that my husband be present which I declined. Then they were surprised that I reviewed every page of the loan and had questions about some redundant fees which I did not want to finance.
My biggest deal breaker was PMI. It was not on the current loan and I saw no reason to allow it to be placed on the new one. They gave me the song and dance about how it protects the bank if I don’t pay the mortgage. I politely explained how the bank gets my house if I don’t pay the mortgage so in essence PMI is just a way to screw the borrower even more. They told me it was out of their control so I left.
A few quick days later, they called me back to tell me they were able to modify the terms of the loan and leave my husband’s name out. They were absolutely shocked that they had a client who was not desperate enough to take whatever they were offering. (I really think they were willing to revise the loan to cut their losses on fees.)
After a few years I decided that my husband was a keeper and have added him to my properties. I was absolutely incensed that in this day and age, the attorney’s office was basically demanding his presence for something he had no stake in at the time. Shoot, when I bought it, they did’t ask my father if it was OK.
I haven’t used it recently, but have in the past and it does usually work. The key as you’ve said is to actually walk out if you don’t get what you want. I’ve even had a few times where I walked out and then got a call a few days later to talk about the deal and finding some common ground.
The key moment is when you stand up to say good bye. You have to be ready to walk out the door. I have to say that my success ration is much lower than yours, around about 60% I think. It all depends, I think, on what you are buying and how badly they need to make the sale. You are right about the excuse that every one else is doing it. Drives me nuts too. I would rather buy from anyone else, who has the same pice, who has not used that line on me.
I’ve used this method buying our last car. Another method is to totally avoid and deflect the how much are you looking for your monthly payments to be…unless you’re paying cash of course. I find that this question allows them to inflate the cost behind long terms and interest.
I tell them I’d rather focus on the total cost. This also changes their composure and they know they are dealing with someone who they are less likely to pull a numbers game on…
But they still try.
That is a great method to use. I have done that as well before. Many times, I don’t speak about numbers at all. I know them in my head and can do most of the math before they can even think about it.
I used this tactic to help get my cousin a new car. 3 weeks before closing the deal, we deposited the initial downpayment and I was going to be the collateral or support. Over the course of 3 weeks, the car agent kept on asking for more information about me. I guess they found out that I had a lot of money in the bank and started to get greedy. They asked for my employment information which I could not give because its confidential. They made a big deal about it and I told them that if I had worked at McDonalds then it would not be a big deal but that’s not the reality. They kept pressing on saying it was the policy and the bank’s policy but that did not persuade me one bit. When they decided to double the downpayment, that’s when I called it quits. I left a voice message saying we are coming to get the downpayment tomorrow. I made sure to pull this off at the right time, and that was the day before the month ends. We got there the following morning and the bank representative was also there. When we sat down at the table, I then called my lawyer and put him on speaker phone to prevent any persuasion traps from happening and plant the thought of an inevitable lawsuit forth coming if things don’t go my way. In the end, the car dealership manager got involved, offered me a better deal, a slight increase to the dwp but not double. I proved to the world that policies can be bended to your will. And anyone is eligible for a car without collateral or support.