money
He who cares less wins…
Sorry for the long delay folks, been a busy month but I hope to share some huge news with you soon….
In the meantime, I depart from my typical writing/movies/pop-culture spiel to share a little lesson that may serve you well in all endeavors going forward, particularly where money is involved.
Some backstory
In a former profession that relied heavily on negotiation and sales, I had an incredibly talented boss who taught me one of the most valuable lessons I EVER learned.
“When it comes to negotiation,” she said, “he who cares less wins.”
Basically, in any deal, you have to remove emotions from the equation and simply make yourself not care about the outcome. Whether you’re talking about 100 dollars or 100,000 dollars. I learned the lesson firsthand when I worked for the company and was dealing with a seller who had a subpar product. My company still wanted the product, but needed some improvements made, improvements that would’ve cost less than 5 thousand dollars. The seller fought tooth and nail to not make the changes we requested, but we held strong and got what we wanted. When we finally completed the transaction and saw all of the balance sheets we learned the seller STILL MADE 90 THOUSAND DOLLARS!!
My point…all that moaning about a five thousand dollar change and they still walked away with 90K. So, it didn’t hurt them to make the change, but they were trying to see how much we cared. If we’d been emotional and felt we really needed to accept their terms because we just LOVED their product so much that we were willing to look past the flaws, then we would’ve essentially paid more for less. But, by stating what we wanted, and being willing to walk away if we didn’t get it, we actually got the exact thing we needed/loved/had to have, and the seller STILL made money. Everybody wins.
FAST FORWARD
My wife and I have been car shopping, a miserable experience that I rank just above Moving. Thanks to all the various online tools and mobile apps available today it’s easy to do all the necessary research before you walk onto a car lot (something car salesmen probably loathe) and make informed decisions. Using said tools, my wife and I were able to narrow our car choices down to a Top 3. Not only that, we were able to determine what sort of interest rate we should be eligible for, the price we should expect to pay for the car, and the value of our trade in.
Of course the dealer had other ideas.
It was no shock that the salesman tried to low ball us in every conceivable category because that’s his job. Part of the technique involves making you miserable while you haggle back and forth over figures. The longer you spend in a dealership trying to get 500 dollars here, and a percentage point there, you get worn down. You don’t want to keep going through this, and you don’t want to start over at another dealer. They mean to wear you down so you take a garbage deal.
But that only works if you care…
I don’t. So this is how my deal went.
I test drove my top choice vehicle. Sat down to talk numbers. The minute they started in with the lowball figures I told them exactly what I expected in every category (sales price, trade in value, loan APR). They tried their hardest NOT to meet my terms.
If you’ve been through this, you know how it goes…typically you’ll do 2 or 3 iterations of haggling with the salesman. Each time you refuse to accept his offer, he makes a show of “going to speak to his manager to see what he can do”. He’s really getting coffee or taking his turn in an ongoing Scrabble game while you sit for 20 minutes. If you’re able to hang on that long without going into a Wolverine Beserker Rage, they’ll eventually bring out some guy who’s dressed slightly better than your salesman. He’s supposed to be the mysterious manager your guy’s been fighting with to get you the “best deal”, he’s probably just the best Scrabble player. This guy is meant to represent the Final Offer, he’s the “Okay folks, i’m doing all I can for you here and this is what I’ve got…” guy. He’s still giving you a s****y deal, though.
When I reached the “talking to the manager” point of the negotiation, I did what few people are willing to do. I sprang from my seat and walked out. Because I don’t care, and because I know something else…
Homecourt advantage is hard to beat.
You can’t win on their court and on their terms. As long as you’re sitting in that uncomfortable chair, and you keep playing the haggle game, they KNOW you want the car. When you suddenly storm out, seemingly unprovoked, hell, they think you might be on your way to get your Uzi. Let them think that.
That was a Saturday.
On Sunday, when the dealership was closed, I sent an email directly to my salesman. See, email is writing, and that’s MY homecourt. I told him the exact terms I was willing to accept, and if he (or his manager) couldn’t meet them, then I’d take my business elsewhere. However, I would not return to the dealership until I had confirmation that I’d get what I want.
By Monday I had a message on my answering machine stating that each and every one of my terms would be met.
Here’s the thing, my terms were fair, and I’m sure they’ll still make more money that I should’ve allowed, but I’m not interested in nickel and diming THEM. I just want a reasonable price…and boy did I get one.
I put a deposit on a brand new 2012 vehicle that’s coming straight from the factory and I’m paying less than I did for the last Used Car I bought. All because I cared less. Really, I cared more about not cheating myself. Funny how alike those two things are.
I tell you the story because there will come a time in your life where you’ll have to negotiate, and you should really consider that getting whatever that deal offers is not worth selling yourself short. Ask for a little more than what you want (because you’ll likely have to negotiate down to what you REALLY want), know what the other side of the deal can feasibly offer and what they’ll gain by dealing with you, and understand that within the parameters of FAIR VALUE, you should never agree to less than what’s right. You’ll regret it later if you do, and I guarantee that you’ll care much more about that…