Dialogues for Results

SUCCESSFUL NEGOTIATING IN A BUYER'S MARKET

On any given day, in a sales office near you, salespeople are greeting customers at the door with their prices, discounts, and incentives. It’s all about the deal to the exclusion of the customer; and, oh by the way, a house comes with that deal.

“Let’s Make A Deal” is playing in many sales offices all over the country, hosted by salespeople who have bought into the myths of the buyer’s market. They’ve bought into the ‘buyer’s market’ myths that the best deal means the lowest price, or that their competitors are the new, used, or distressed homes priced equal to or below theirs, or that it is the customer’s job to walk in with urgency. These myths have caused them to abandon any semblance of a sales process, and to abdicate responsibility for their performances. As a result, on those rare occasions when they accidentally convert a prospect to a buyer, painful protracted price negotiations occur.

That being said, there are exceptional salespeople, veterans and rookies alike, who are wildly successful today. They recognize that their choice is whether to host “Let’s Make A Deal” or to change the channel to “The Price Is Right”, not between executing the old seller’s market tell and sell process or no sales process at all. Only the independently wealthy can just hang out in a sales office to pass the time.

If you want “The Price Is Right” playing in your office, there are specific questions and techniques I’ll cover for successful negotiating. But first, more importantly, there are sales strategies you can employ to sell more and negotiate less. Today’s ‘buyer’s market’ demands the well planned and artfully executed sales process you never needed during the ’seller’s market’. The sales process itself is your #1 strategy for reducing the intensity and frequency of negotiations, increasing sales, decreasing cancellations, and raising prices. Debunking the myths and exposing the market realities reveal the keys for a successful buyer’s market sales process.

•Market Reality: Your competitors are not all the homes in the market priced equal to or lower than yours. Your real competitor is the roof (leased or owned) over the customer’s head now. Unless the customer is homeless or near homeless, they don’t need a new home. Their current roof is their 'comfort zone'. How can your roof compete with their current roof? What life changing benefits do your home, home sites, and community offer them that might motivate them to leave their 'comfort zone'?
Sales Strategy: Ask purposeful Discovery questions (as opposed to the interrogatory laundry list style questions of the past) about how they live now as opposed to how they’d like to live. Discover the life changing benefits that will have meaning and value for them.

•Market Reality: “I’m looking for the best deal” does not mean “I’m looking for the lowest price”. The reality is that, for most customers, the best deal means the best home for them at the best price, in other words, value. Customers weigh the emotional relevance of the life changing benefits you demonstrate, those provided by your roof versus theirs, against the price or risk to assess value. When a customer negotiates, it is not about your price, it is about your demonstration. Remember, value, like beauty, is in the eye of the beholder.
Sales Strategy: Execute Demonstrations that incorporate your Discovery to tell the story of how the customer will live in their new home and community. Persuade the customer to believe that a specific home on a specific home site will provide them the meaningful life changing benefits they seek

•Market Reality: It’s both a myth and a reality that customers have no urgency and aren’t buying. It’s a reality if you define Urgency as our old friend ‘fear of loss’ Urgency. They are walking in with fear- fear of declining home values and job losses. But honestly, in this ‘sea of sameness’ market created by an overabundance of available homes and incentives, a customer walking in with ‘fear of loss’ would seem kind of insane, wouldn’t they? And, it’s a reality that customers aren’t buying from people who aren’t selling. On the flip side, it’s a myth in the first place to expect customers to walk in with urgency. It’s not the customer’s job to have urgency, or to give you their personal information voluntarily, or to exhibit buying signals for that matter! Unless you’re abducting them on the street and dragging them into your office, they‘ve been brave enough to walk in! That’s enough work for them!
Sales Strategy: Differentiate yourself, your builder, and your community to stand out in the ‘sea of sameness’. Differentiate to convince the customer that only your home can provide them the life changing benefits they value and deserve.

It is your job with every customer to create ‘Value Urgency’ through Discovery, Demonstrations, and Differentiating; this is the only urgency powerful enough to compete with their current roof and to overcome their fears and financial concerns. You've heard the expression 'where there's a will, there's a way', haven't you? Selling is the creation of the will, or 'Value Urgency' ,by persuading the customer to believe that owning your home, and only your home, will provide them meaningful life changing benefits that far outweigh the price or risk. And once they have the 'will', you will help them find the way.

A 3D based sales process based will increase sales and reduce the frequency and intensity of negotiating. But there will still be buyers who want to negotiate, just, thankfully, fewer of them. For those few, here are some winning principles and strategies.

•The Negotiating Advantage
The advantage in any negotiation goes to the party who exercises the power of silence at the crucial moments, and is willing to ‘takeaway or walkaway’ at any time.

•Never Negotiate First & Never Negotiate With A Stranger
Premature negotiation by the customer or salesperson is common, but curable. Postpone your premature discussions of price or discounts until you’ve executed the 3D’s and created Value Urgency. Redirect the customer’s premature negotiation by asking: “Tell me, are you looking for the cheapest price?” The typical response will be that they are not looking for the cheapest, but the best.

•Both Parties Must Want To Win Something They Value Equally
If you believe you’ve created “Value Urgency” for one specific home and still the customer starts negotiating, ask this critical question before you engage. “Are you saying you value this home enough to move forward today?” If they do not answer in the affirmative, it would be counterproductive to proceed with any specific price discussions. The customer is either questioning the value, or there is an unspoken objection to be resolved.

•Effective Countering Preserves Your Price & Allows the Customer To Save Face
Preserve your price and concede terms that are of value to the customer whenever possible. Unless the customer is paying cash, the important numbers are the monthly investment and cash to close, not the price. You can also concede on options, home site premiums, or move in terms. Always be willing to walk away or withdraw terms. If you have to counter price, use a number that appears deliberate and well thought out, rather than splitting the difference or a round number. When possible, reduce the difference between your price and theirs to the ridiculous, i.e. $ per day, and balance it against the meaningful life changing benefits your home will provide.

I challenge you to accept the market realities, to adapt accordingly, and to adopt these sales and negotiating strategies. Those salespeople who elevate their performance to meet the challenges of the market will sell more homes and negotiate less. During this Darwinian cycle of natural selection in our industry, it is your choice to evolve or become extinct! It is within your power to control the market, not to let it control you. Although you cannot control what people think or how they feel when they walk in your doors, you can control what they think and how they feel when they walk out!
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