Overcoming Objections on the Phone: Is That Your Best Price (PART 2)
TRANSCRIPT: Overcoming Objections on the Phone: “Is that your best price?” (Part 2). See, we answered this question previously, but we did it in an ‘old school’ way that may not fit with your current business. In that video, we answered “Is this your best price?” like this: “No. that’s not our best price. We reserve our BEST price for people who’ve selected and test driven a vehicle. See, it does neither of us any good to work out a price if it’s not the perfect fit for you. Now, your presence in our dealership is your leverage and if you’ll schedule and keep an appointment with me, I can guarantee that once you’ve selected and test driven a vehicle, I will get you the very best price on that vehicle. Now, I have two test drives open on Camrys this afternoon, I have a 5:15 and a 5:45. Which of these works better for you?”
It’s important to understand that for many businesses, especially car dealers, when you answer a question like that, it may not be satisfying to customers today. It may require a little more transparency, in other words. So, while the ‘old school’ way may still be valid for some, it’s not going to work for everyone, especially for dealers who have already priced their vehicles ‘to market’. If your vehicles are priced ‘to market’ online, that’s a problem if you answer “No, we reserve our best price for people who have selected and test driven a vehicle”. See, when you’re priced to market, the problem is most dealers get stuck with what I like to call, “the market based pricing triple discount”.
So, we’ve priced our vehicles ‘to market’. That’s discount number one. Then someone calls us on the phone and they ask us, “Is that your best price? “and you know what happens – your BDC or your internet salespeople give another price. That’s your second discount. Then, when someone has already received two discounts from us, they saw our market based pricing (discount number one), they talked to our team and got discount number two. Then they arrive at our dealership and what do they want? Right away they want to negotiate that third discount. That’s ‘the market based pricing triple discount’.
You can stop this with the very first interaction whether it’s on the phone or on the lot. You can keep yourself from giving three discounts when you are already at market based pricing.
You are at market based pricing and you get that call, “Is that your best price?”, you need to be ready to answer something like this, “If you’ve been shopping online then you know we price all of our vehicles competitively right from the beginning. We would never dream of insulting our customers by showing you our second best price and then making you negotiate to find some hidden best price. Now, that Accord is priced to sell at $19, 399 and it will likely not be here by the weekend at that price. Now, I do have two test drives open on THAT Accord this afternoon. I have a 12:15 and a 12:45. Which one works better for you?”
Now for some dealers out there, you cannot price your vehicles to market because you are only allowed to give invoice pricing or some variation of that. I’m talking about new cars, of course. When you can’t or don’t price your new cars to market, then with all ‘best price’ questions your BDC agents or your internet salespeople should continue to provide the matrix pricing that you have allowed them to provide. When a customer indicates that they have received a lower price from another dealer, then the BDC or the salesperson should be instructed to answer with something like this: customer says “I’ve got a lower price from competitor A”. Our response should be “We wouldn’t have lasted more than 45 years in business if we weren’t always competitive on price and we will not lose ANY deal over price. If we cannot meet or beat your best valid written offer on an in-stock unit, we will fill your tank with gas and give you a $100 gift certificate to Olive Garden. So, if you’re ready to test drive that Accord, I’ve got two test drives open on that Accord this morning – I’ve got a 10:15 and a 10:45. Which one works better for you?”
So, the question comes up, “Steve, if we’re invoiced priced online and then we have our matrix price and a customer comes back and says they have our price beat by, say, two or three hundred dollars, why not just give them the two or three hundred dollars that we have in reserve that we have below our matrix price?” Right? It’s because the person on the phone calling you to tell you that dealer A has beat you by two hundred has no intention of ever buying from you. Sometimes they are actually sitting at the other dealership when they make that call.
It’s important to bury the dead. It’s important to move on. It’s important to call their bluff. So we answer that question like I just did. We say, “We would NEVER have lasted 45 years in the business if we were not always competitive on pricing and we will NEVER lose a deal over price. Now, if we can’t meet or beat your best valid written offer on an in-stock unit, we will fill your tank with gas and give you a $100 gift card to Olive Garden. So, if you’re ready to test drive that Accord with us, I have two test drives open on that vehicle this morning. I have a 10:15 and a 10:45. Which of those works better for you?”
Okay, on new car pricing, let’s say we’ve got our invoice pricing online and we’ve got our matrix pricing that we give when someone calls or emails us. Now, when we’ve gotten that ‘best price’ question, “Is that your best price?” and they are not at a competitor yet, and we’ve given them the matrix price and then they ask if that’s our best price, the BDC agents or your salespeople should be instructed to answer something like this: ”We would not have lasted more than 45 years in business if we were not ALWAYS competitive on price. Plus, we would never dream of insulting our customers by giving you our second best price and then make you negotiate to find some hidden best price. That Camry is priced to sell at $31,399 and it will likely not be on our lot much longer. Now, I do have two test drives open on that Camry this morning. I’ve got a 10:15 and a 10:45. Which of those works better for you?”