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Alan
Scotwork.
Wednesday 14 July 2010
New Blog
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Monday 12 July 2010
Buying a Car? Maybe you need to walk away?
A friend of mine asked me about buying cars and, after your house, I suppose that the most significant purchase that most people will make will be their car. For some reason, buying a car sends a shiver of apprehension up a lot of people’s spines – I suppose because most folk are embarrassed by the whole “haggling” thing. They have seen the TV programmes where you are advised to go in tough and beat the poor salesperson into the ground, but somehow they know that that approach is not one with which they feel comfortable. So they meekly accept the first offer that is put on the table and they buy the salesman’s patter that the deal they have secured is “as good as you will get this weekend, sir”.
Car buyers should, first and foremost, recognise that they have one significant advantage over the salesperson – their ability to walk away. Knowing that you can walk should give you confidence in your dealings with the garage. Even if the deal on offer is beyond your wildest dreams, you should make to walk away.
Make sure that you have a set budget in mind and are absolutely clear about what you need in the car. If you do not need leather, for example, and the salesman is trying to sell you a car off the forecourt with leather, make it absolutely clear that you do not need or want leather and that they will need to remove the cost of the extra from the car before you would think about buying.
There is no substitute for doing your research. The information on what a car is worth is out there on the internet or in the popular car magazines. Become a car nerd for a month or two before you actually go in and have a look around at the cars. Take a drive to another garage and have a practice negotiation with them (see note above about walking away!).
Never accept the “sticker price” or first offer. Apart from anything else, the salesperson will be insulted and unable to sleep for many a night as he rues the fact that he pitched too low!
Have a “wish list”. Sometimes it is easier for the salesman to add things to the package than take money off, so think about asking for free services, guaranteed discounts on the price of replacement parts for the life of the car, a free tank of petrol, free carpets or mats for the car – those kinds of things.
There is one key thing to remember here: there are lots of great deals out there at the moment – car makers are desperate to move cars to market as quickly as possible. Lok out for special offers and pre-registered cars. Often, they are as near new as makes no odds, but are sold at big discounts. It is worth having a shop around.
Car buyers should, first and foremost, recognise that they have one significant advantage over the salesperson – their ability to walk away. Knowing that you can walk should give you confidence in your dealings with the garage. Even if the deal on offer is beyond your wildest dreams, you should make to walk away.
Make sure that you have a set budget in mind and are absolutely clear about what you need in the car. If you do not need leather, for example, and the salesman is trying to sell you a car off the forecourt with leather, make it absolutely clear that you do not need or want leather and that they will need to remove the cost of the extra from the car before you would think about buying.
There is no substitute for doing your research. The information on what a car is worth is out there on the internet or in the popular car magazines. Become a car nerd for a month or two before you actually go in and have a look around at the cars. Take a drive to another garage and have a practice negotiation with them (see note above about walking away!).
Never accept the “sticker price” or first offer. Apart from anything else, the salesperson will be insulted and unable to sleep for many a night as he rues the fact that he pitched too low!
Have a “wish list”. Sometimes it is easier for the salesman to add things to the package than take money off, so think about asking for free services, guaranteed discounts on the price of replacement parts for the life of the car, a free tank of petrol, free carpets or mats for the car – those kinds of things.
There is one key thing to remember here: there are lots of great deals out there at the moment – car makers are desperate to move cars to market as quickly as possible. Lok out for special offers and pre-registered cars. Often, they are as near new as makes no odds, but are sold at big discounts. It is worth having a shop around.
Robin Copland.
Tuesday 6 July 2010
The times they are a changing.
Which business sector employs the most negotiators but does the least negotiatiating? Answer: Real estate agents. Everyone from the Principal partner to the 18 year old spotty youth employed to make the tea and erect the ‘For Sale’ signs revel in the title, but our perception is that most of them do a bit of soft-shoe haggling when selling a house and that’s about it.
But times are changing. Property prices in the recession haven’t fallen as much as was anticipated in the recession, and that is because of a dearth of property on the market – scarce supply keeping prices buoyant. As a result, agents are resorting to some interesting negotiating tactics to get prospective vendors to commit to selling through their offices. Foxtons have offered a 0% commission rate from time to time before, usually limited to the first few who applied. They are doing it again, from several offices in North London. So other agents in these areas have to up their game to compete with this; you can’t do cheaper than free.
How do they do it? The tricks include subterfuge – for example over-valuing the property to ‘flatter’ the owners, and ‘blozzing’ – talking up the state of business and their agency’s successes. This latter is endemic in the industry – in the last 2 years I have not seen a single property supplement in a newspaper with a headline that reflected the current state of the market.
There are also some negotiating techniques which solve the problem with integrity as well as success. Agents who recognise that the prospective vendor is buying them, and their expertise, do well, as do those who know that the commission is only one of the considerations vendors take into account. An estate agent’s contract has lots of variables, any of which can become negotiating chips useful for trading. The more expensive the house, the lower the fee. The shorter the contract length, the higher the fee. The dodgier the language in the contract, the lower the fee will be , but the more likely the vendor will have to pay even when the agent doesn’t make the sale. Skilled agents use these variables to help vendors get decent deals, and get good deals for themselves.
Stephen White
Managing Partner
Scotwork UK LLP
But times are changing. Property prices in the recession haven’t fallen as much as was anticipated in the recession, and that is because of a dearth of property on the market – scarce supply keeping prices buoyant. As a result, agents are resorting to some interesting negotiating tactics to get prospective vendors to commit to selling through their offices. Foxtons have offered a 0% commission rate from time to time before, usually limited to the first few who applied. They are doing it again, from several offices in North London. So other agents in these areas have to up their game to compete with this; you can’t do cheaper than free.
How do they do it? The tricks include subterfuge – for example over-valuing the property to ‘flatter’ the owners, and ‘blozzing’ – talking up the state of business and their agency’s successes. This latter is endemic in the industry – in the last 2 years I have not seen a single property supplement in a newspaper with a headline that reflected the current state of the market.
There are also some negotiating techniques which solve the problem with integrity as well as success. Agents who recognise that the prospective vendor is buying them, and their expertise, do well, as do those who know that the commission is only one of the considerations vendors take into account. An estate agent’s contract has lots of variables, any of which can become negotiating chips useful for trading. The more expensive the house, the lower the fee. The shorter the contract length, the higher the fee. The dodgier the language in the contract, the lower the fee will be , but the more likely the vendor will have to pay even when the agent doesn’t make the sale. Skilled agents use these variables to help vendors get decent deals, and get good deals for themselves.
Stephen White
Managing Partner
Scotwork UK LLP
Friday 2 July 2010
My wife already knew it!
F. Scott Fitzgerald once said 'The test of a first-rate mind is the ability to hold two opposing ideas in the mind at the same time, and still retain the ability to function'.
Well either he was wrong or there are no first-rate minds as neuroscience revealed the impossibility of the task.
Early humans had one mind. It was what psychologists call a "reactive" mind. It only exhibited what we would consider higher thought processes when it was presented with a problem. It didn't plan for the future or imagine how to improve things like a dwelling, a tool or escaping a predator. It only reacted to situations that happened in the "here and now." But, according to neuroscience, a sudden improvement happened when the human brain decided to double its efforts in thought processing. Now, although you and I have one brain, each half of it has the ability to act independently at the same time.
Our conscious mind can only focus on data from one side of the brain at a time. We can switch from one side to the other very quickly (with our corpus collosum which acts rather like a biological ethernet cable) but that's not always the most efficient way to act and eventually ultimate authority to enter consciousness is delegated to one brain or the other. In our modern world, this battle is almost always won by the left brain. This left brain is seen as the logic centre the right being more engaged in creative or emotional reaction.
The next time you find yourself entering a business critical negotiation think how impossible it is for you to handle and think about many of the tasks essential to a successful conclusion. Since negotiation inevitably involves conflict, being able to see how the other side see the potential outcomes involves an essential switch between ideas. At Scotwork we have identified at least 28 different tasks which need to be managed by your negotiation team. We don't think you need a team of 28, a good team of 3 will work to tag switch between tasks. Tactically a good team can make all the difference, particularly when the team is clearly briefed and on message.
Good teamwork can buy valuable thinking time in the apparent chaos of the too and fro, can focus and clarify the task, give your brain the time to switch between thoughts and control the potentially dangerous right hand brain from emotionally over heating, on both sides.
Top tips;
- In crucial negotiations go in with a team.
- Have clear and distinct roles.
- Stay on message and within role.
- Use team work to buy thinking time.
- Use a summariser to keep the meeting on track.
Good luck.
Alan Smith
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