Part 3: People Management

This is the area that car failing car dealers usually suck at worst. It's usually a combination of all three parts- but when you **** up people it becomes very hard to fix the other two.

It's crucial that the people you have work well together. You can have a truly talented individual who doesn't fit well- but unless his name is Cal fire his ass. These people have a horrible radiating effect on morale. They result in 'crapped out' salespeople who can't manage the first part of the sales process well. 'Crapped out' and 'tilted' have basically the same meaning fwiw- although tilt does have more of an angry flavor where crapped out is more about depression.

Keeping morale up is really important. I worked for a Ford dealer for two weeks (I got into a fight with my manager at the chrysler dealership- after those two weeks I went back and begged my way into getting my old job back) where they had hired 60 salespeople to handle perhaps 300 new car sales and 100 used car sales. If you do some basic math you realize that this means you've got salespeople selling 6.66 cars each on average. There were 3 salespeople who had been there for a long time and they were doing 15-25 cars each- which left very little for everyone else. The average commission was maybe 300$ at this place. The level of depression at this place just hung in the air. It was like being in a dessert hanging around with a bunch of dying vultures who hadn't eaten in a week. That dealership should have fired the bottom 60% of their staff immediately. The fog would have lifted pretty much right away.

That ford dealership is gone now. They had problems in all three categories fwiw.

No. The car dealership gets their money either way. You paying cash significantly reduces their chances of making any money in finance.

In MY experience with the people of 'sales', I was lead to a few conclusions:

1) They are the stars of their own circus.
2) When one of them says nice things about a co-worker, It is because that
co-worker has failed to leave the room.
3) Gossip is like bread and water. ie; Life COULD NOT maintain w/o it.
4) Never say something in confidence that is expected to remain in confidence. EVER!
5) They make it very easy to spot a lie. (Their lips are moving.)
6) Grandmothers are 10% off on Sundays. If the deal is big enough, she gets thrown in for free.

In MY experience people who use drug imagery for their avatar do not have credit good enough to purchase a car. As a result I'm fairly sure that 1-6 are not from your experience.

Yeahhhhhhh, ok. My car(s) and or credit rating has NOTHING to do with my observations of the individuals within this line of work. This was just my experience bro. I will apologize for 'obviously' hitting a nerve.

And as a result,.......don't take it personally.

Edit: My friend has 4 used car dealerships so perhaps his sales personal are the bottom of the barrel and my observations are skewed. If so, my apologizes.

I am getting a promotion from an engineer to a project manager this week. My boss says hes working with HR right now on the paper work and that the compensation and the refining of the job description is coming up next week with me.

I am currently an hourly employee and the new role will be a salaried position. Also, the job description possibly needs refining because my boss asked me to write the job description myself since this is a new position all together- im creating the position. My company is a 700 employee software company.

Since im currently hourly i am getting paid about 5 to 10 hours over time every 2 weeks pay period which amounts to about a 10% to 20% effective higher pay than the base pay. I would like this to be considered when converting my current hourly pay over to salary AND then the pay bump for the promotion. Also I'd like at least a 15% raise for this promotion because of huge increase in responsibilities and lots of headaches (that I am already starting to notice during the past few weeks). This promotion actually move my position from reporting to my current/soon to be previous manager to a new boss who is a director.

I am quite happy with getting this promotion and I don't want to be ungrateful and pushy but for me to feel that I am not taken advantage of I would need the conversion to take into account my overtime and then a minimum of 15% raise on top of it for the new role. With all this said, I would be then in the middle of the pack wrt to salary ranges for my job title.

Any tips on handling this?

Relax. If you come across as tense and worried they'll sense weakness and it won't help.

Next you need to answer the following question honestly.
Would I take this job without a raise? If yes go in knowing it. If no go in accepting that you might not take the job- and decide that this wouldn't be the end of the world.

If the answer is yes then go in and ask for a 25% raise above your OT. Then make them work you down. Find out what they're willing to do by making them work for it.

If the answer is no come in and do the exact same thing- except be perfectly ok with telling them that you're politely declining the job if they try to reach under 15%.

It's really crucial to know your number- going in not having a firm idea will result in your talking yourself into taking a substandard offer.

I love this thread. Lots of great advice from BS. I negotiate on behalf of companies all day every day and agree with what has been advised, but I can't stress enough how important it is to have a great attitude and maintain a polite and positive demeanor when negotiating.

two things the OP excels at im sure

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You mentioned how a lot of things haven't changed in the business in 50 years. How has the internet changed the car business and negotiation process?

Going forward, do you ever imagine a site like Groupon or Zillow completely streamlining the process and making the negotiation process obsolete?

Do you have anything I want? No?

One of the things I think people struggle with the most is saying no. Good negotiators say no all the time. Being able to tell people no firmly and without feeling guilty is one of the biggest predictors to future success imo.

Most people really struggle with telling other people no when asked for something. We're taught that saying no is a bad thing to do. The sad reality though is that there are many, many people in the world who take advantage of this. They will ask you to do unreasonable things for you, they will make unreasonable offers, and they will simply ask, and ask, and ask. If you don't learn how to tell these people no they will take an enormous amount of time, money, and emotionaly pain (when you do say no) from you.

"I'm good at telling people no. Charlie is better..." -Warren Buffett

This quote says a lot imo.

I am looking to purchase a used car within the next 2 weeks. I have found a car from a local private seller. It is already priced 10%+ under my estimated market value (for the sake of this example we'll assume that my estimate is correct...). I would be willing to pay the full asking price but I feel I have a bit of leverage and might be able to pay even less.

The car has been listed on a autotrader for 4 months or so. 6 weeks ago the seller dropped his price to the current level. I did my due diligence, took it for a test drive then, due to life circumstances, I decided to hold off a bit on buying. The seller mentioned he had lots of interest in the car once he lowered the price. Now a month later I thought it would be sold but found out that it is still available. I am now ready to buy. He knows his car is priced well yet it still hasn't sold...

What is my play? Offer him even less or just pay him the asking price and not be greedy?

Come on dude. Always always always offer less. If you would pay full asking- what does it hurt to try to get it cheaper? At least swing the bat.

Do you check back the river with the nuts?

http://en.wikipedia.org/wiki/How_to_...fluence_People

.

or, this might be more your style


http://www.amazon.com/gp/product/B00...DK95235YGNMZ1H



.

well played

Great read, OP.

Fantastic. I'll carry this one with me for awhile.

So far you've touched on negotiations that are closed: the parties will tend not to interact with each other afterwards. How does the strategy differ with multiple and separate negotiations with the same party?

I own a service-based business in a high-margin niche, serving medium to large companies.

Do you have to 'balance your range'? Example: we typically price high and work from there, walking away from contracts that simply can't enter our acceptable price range. However, I'm afraid a client has learned he can whittle me down if we hit a soft patch for quarterly results. The contracts are still favorable to us, but I move on price to keep the relationship clean. Do I simply take a stand on one [of several] contracts with him just to stem the flow and eliminate the expectation that he can always get this result in the future?

Perception management: Rate the "honesty" of your evaluation of the product. Do you only emphasize the truly good features? Is there ever a time to admit fault with the product [when faced with direct evidence], and if so, what is the percentage of those times? (5%? 60%? 25%?)

Re-opening: You mentioned that you let the customer walk and wait a week to see who breaks first. Is it worth re-opening on the potential customer with a number that was still higher than what they wanted? (Within reason, of course)

You're caught bluffing with air; how do you recover to make it up on the back-end?: In car parlance, they know invoice price, demand of the vehicle, and refuse to move. They know they've won this round. Is there any reset button to hit?

This is a really really good list of questions. I'm going to be clear here that I don't think a lot of these questions have good answers. With that in mind I'm going to talk mostly about what you definitely shouldn't do- and make a couple of random recomendations. Please realize that I don't have a ton of details to work with here- so I could be very very wrong.

In super high margin situations I sometimes wonder about the wisdom of negotiating at all. The reasons are pretty obvious- every time you discount the product you reduce its value in the customers eyes. There are lots of other firms your customers do business with who have relatively high margins- I'd bet a lot of them don't give them a chance to whittle down the price. Negotiation is usually the result of a business being SUPER competitive- like the car business.

Part of me feels that if you're going to negotiate you should be negotiating longer contracts- possibly with more favorable terms for the customer. The reason why I say this is that the less often you renegotiate the harder it is for competitors to worm their way in to your business If they want some kind of discount it's absolutely essential that you get SOMETHING back. A longer/larger contract, some kind of return service, something, anything. Anything to fight the perception that your price is full of hot air that can be safely deflated. You ballance your range by making sure that when you negotiate you get some kind of concession for any concession you give away.

Basically you say "The price is the price, but if you agree to buy x for y time period maybe I could knock off z%". If you don't get something more from them for the discount they'll think that that discount is permanently attainable.

On the subject of honesty about the product I think you build a lot more respect from the customer if you're willing to admit when something isn't perfect. I don't see the point of denying to the customer that they have a point. At best they'll think you're egotistical and/or insecure and at worst they'll think you're a lying piece of ****.

The walk-and-wait-a-week tactic isn't something I'd do all the time. In your business with ongoing relationships I really wouldn't reccomend it at all.

In situations where you're dealing with people you're going to be doing business with regularly you shouldn't bluff with air. Being caught bluffing is simply too horrible to accept. When you come down in price always get something back. I've said that like 4 times, but in complex business to business negotiations it's absolutely essential that you have a few concessions in your back pocket that you can make to close the deal. These are things like free installation, free cleaning, free service, whatever... Just things you can throw in to make them feel like you gave something to THEM for being a loyal customer blah blah blah.

This is generally untrue when buying a house when it is being sold by laypeople owners.

Example:
A house is listed at an asking price of 1,000,000 in a market where houses generally sell for 95% of asking price, and the house is priced more or less in line with other comparable properties. For sake of argument, assume the sellers are somewhat distressed and have decided the lowest price they will take is 900,000. If you come in and offer 700,000 you will seriously jeopardize your ability to get it for their lowest price, whereas if you were to come in and offer 850,000 you have a much better chance of getting it for 900,000.

This is not so much the case when being sold by the REO department of a bank, and somewhat less the case with properties being sold by builders/developers/investors who are less irrational.

Much appreciated; that gives me a lot to think about. Thank you for your time!

I disagree. If the house is worth 900k then I'd say 800k probably won't result in them completely losing it. That being said it's not reasonable. They will then respond with 950k- which IS reasonable. You can then counter at 850k... they'll offer 900k.. and you'll get there just fine.

The goal is to make a first offer that is the perfect combination of unreasonable (as in they will never ever say yes) and not insulting. There is a lot of art in that I think.

I thought I'd put this here since it is about negotiating.

I had an interview today where it turns out that they have hourly work they would like for me to do. I am about to get my PhD and they would like for me to conduct a study that will take about 150 hours. It seems like they will be very flexible with me about when it needs to be done and the hours that I need to work. It would basically view me as a temp worker so no benefits. However, they said that it would be a bit like a test period to see if I would be a good fit for the company and if I would like to work there.

I asked them what what rate they would be willing to pay me. The person thought about it a bit and I said he didn't have to give an answer then (I still have to check with people before I can commit) but then he said "what do you think about $30/hr?" I said that it depending on when it needed to be done, etc. That launched us into the conversation about the fact that the hours were flexible, but we never went back to the pay.

The way I see it we never finished the conversation about pay so there is still negotiation to be done. What is a good way to handle this? Should I say "I'm interested in the work, but I think that I my skills warrant $XX/hr"? If so, what rate is a reasonable counter? I wouldn't want to counter with something absurd, but I also don't want to counter with something too low. Lastly, is it okay to e-mail this or do I need to call to complete the negotiation.

Thanks for any help you can give me.

Email is fine. Actually for people who rarely negotiate I'd reccomend email. It reduces the possibility of saying something stupid. What is the market rate for people who do your kind of work? Is their initial offer a lowball for people in your field? What are your other opportunities?

All of the above are variables that have to be checked. After I get those answers I'll probably have even more questions before being able to give something like good advice.