Month: June 2012

Negotiate Your Best Deal

 

As I have mentioned, I went through a bankruptcy a couple of years ago.  A couple of months after the bankruptcy was discharged, I had to take my car in for repairs.  The following article was written after that experience…

Today, I took my car in for an oil change.  I decided while I was there, I would have them check these pesky lights that kept lighting up on my dashboard – one for tire pressure, one for the vehicle stability assist system.  I had hoped both were covered under warranty.  Unfortunately, they were not covered.  Not only were these not covered under warranty, I was told of two other items I needed to have replaced.  

My first reaction was one of panic.  I just went through a bankruptcy and have just been getting back on my feet with a savings account cushion, and a sizeable chunk was about to be sucked away by numerous car repairs.  I then jumped to anger, because as reason set in, I suspected I might be taken for a bit of a ride.  And then my years of management experience kicked in, and I jumped into negotiation mode.  In hindsight reflection, I realized that not everyone (particularly women) would have been equipped with the skills, knowledge, and reason to negotiate with a service man at a dealership.

Please note here that I was dealing with a service associate – a middle man who relays information from the mechanics to the customer.  Their purpose is to make the customer experience more pleasant by presenting a professional demeanor and appear to be taking care of the customer with a one-on-one approach.  However, a service associate is also somewhat of a salesman, as he takes the mechanic’s suggestions for service and tries to “sell” these repairs to the customer by making the problems sound serious enough for immediate repair.

For me, negotiation has become a survival instinct – a fight-or-flight response that kicks in, particularly where money is involved.  As I mentioned, I just went through a bankruptcy.  I am slowly rebuilding my life on a very limited budget, and while I have a savings for emergencies, I have to ensure that every dollar spent is spent wisely.  But negotiation hasn’t always come so easily for me.  I have had a few wise mentors along the way, particularly in fitness sales (which, let’s face it, are equivalent to our stigma of the “used car salesman” – very aggressive and tell you what you want to hear).

Here’s what I’ve learned about the art of negotiation:   

1.  Identify your needs (versus your WANTS).
What do you absolutely need from this product (i.e. cannot live without)?  Now, what would you like to have from this product, but can ultimately do without if push comes to shove?  Be realistic.  For me, “needs” now equate to survival, and “wants” are things that can wait a while longer.  I need a car that runs well and keeps me safe.  Today, I needed an oil change.  The lights going off on my dash may simply be electrical, and may not be signaling an emergency situation.  I need a mechanic to tell me the difference.

2.  Ask the associate what options you have based on your requests.
Always present your “wants” to the associate as part of your “needs” package.  Go for the gold, as they say…but be willing to settle for the bronze.  But, as in poker, keep your cards hidden.  You have to play it cool and play the cards at the right moment to get the result that you want.  In my case, I requested a full service check, but wanted to know prices before any work was completed.  He came back with a list of prices for my requests, plus two more items that he claimed needed to be replaced.

3.  Be firm…and be willing to walk away.  For real.
I came in expecting to pay for an oil change.  I anticipated some fees for whatever else they may have found wrong, but planned to spend no more than about $100.  His total was $255 – and that was just for a new battery, new brake switch, oil change, and to run diagnostics on the warning lights (there would be additional fees depending on what was actually wrong).  While I have enough to cover all of that in my savings, it would be a substantial blow to me at this point in time.  I live my life on a very carefully planned and maintained budget right now, and that is a large, unplanned expense.  I asked very specific questions about his list of problems: 1) what is the expected life span of the battery (i.e. will it die tomorrow, or will it go for another 2-4 weeks)? 2) what does the brake switch do? 3) what problems absolutely need to be corrected today, and which ones can wait?  I even went so far as to ask if these parts I needed were special Honda parts, or if I could get, say, the battery somewhere else after I shopped around for a better price.

4.  Draw your bottom line.
I then informed the associate that I do not have a credit card, and that my budget for the day is $100.  I asked him to speak with the mechanics again to find out what was absolutely necessary to be safe in my car.  He was concerned that it would take a while longer.  I informed him that time was not important, but that money was important, and that I was willing to wait whatever time needed to find out which services I needed within my budget constraints.

5.  Be patient.
The associate was gone for quite some time, and came back to update me on the situation a handful of times.  My total wait time on the day was over 2 hrs, and the final result was an oil change and installation of a new battery.  I was told the other items weren’t critical and could, in fact, wait until the next time.  They reset one of the warning lights and took it for a test drive to ensure it didn’t come back on – for free.  Total spent today was around $150 – more than I had planned on, but far less than I was told in suggested repairs.

6.  Remember: YOU are in control.
Never lose sight of the fact that you are a paying customer who can (and will) go elsewhere if the associates in front of you aren’t meeting your needs.  As a retail manager, I know the importance of customer satisfaction and loyalty; those associates need your purchase, and they should do everything in their power to ensure you spend your money at their establishment.  Don’t be afraid of the word “no” – to hear it or to say it.  However, do be flexible enough to know when the associate in front of you has truly hit their bottom line.  And either that will be good enough, or it won’t – that is for you to decide (refer back to #1).  But chances are, you still win, because their bottom line is still going to be better than their first offer…and you have saved money.

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