Last month we looked at selling used cars and how that relates to estimating. Both are unique transactions. One is selling a unique vehicle, the other is selling a unique repair. Both have a "book" or "guide" to determine beginning values. Both must balance a buyer's needs and expectations with a seller's needs and expectations.
It sure would be easier to simply use a list of rules or a menu of prices, but when every repair is unique in a competitive marketplace, there are too many variables for such an approach. Procedure pages, DRP agreements and company guidelines cannot answer every question in every situation, including: "That isn't necessary." "You are the only one asking for that." "We don't pay for that."
With differing points of view, needs and expectations, buyers and sellers must come to an agreement by working out their differences. Let the negotiations begin!
We know there are some interesting discussions out there on a wide range of negotiable topics: included operations, needed operations, environmental charges, shop supplies, blending, color match operations, texturing and many more.
We also know most folks would rather have a root canal than do face-to-face negotiations. Usually focusing on vehicle repairs and technical concerns, we generally don't think of this as a special skill to focus on. However, it is a skill to develop and practice just like any other skill.
The book, Negotiating for Dummies, is an easy read and may be a good start. It summarizes six basic elements for successful negotiations: preparing, setting goals and limits, maintaining emotional distance, effective listening, speaking clearly and knowing how and when to close.
The most important element may be preparation, which would include researching your market, finding authoritative substantiation for your position and identifying the decision maker. First, know your competition in order to make sound decisions ("You're the only one..."). Second, use all available resources for documentation, including information providers, paint companies and Inter-Industry Conference On Auto Collision Repair (I-CAR) ("That isn't necessary"). Finally, know who makes the decision ("We don't pay for that").
That last argument moves responsibility to a higher authority. If so, that's where the discussion needs to take place. Invite that decision maker to your association meeting ... or invite yourselves to the claims office. There is no sense arguing with a local appraiser if he or she cannot make or change that call.
Setting goals and limits would include defining what you want as well as what you could live with. That also means there is a chance of walking away — some jobs may have to be passed up. Are you willing to do that?
The most difficult negotiating element may be detachment: keeping your ego out of it, staying flexible and being willing to walk away. Keep it impersonal — this is about getting a job done and growing a business relationship for the future — not about who can talk the loudest or who can win.
Other negotiating elements to consider:
- Effective listening — We learn little by talking, we learn most by listening. If you are forming your response before the other person is finished speaking, you are not really listening.
- Speaking clearly — Can you counter an objection with a valid argument? Does your response have a clear opening, body and conclusion that sticks to the point? Can you clearly get your point across?
- Knowing how and when to close — This is simply getting to yes. It may be several small steps, simple agreements along the way and a bit of give-and-take. Keep your eye on the end game.
Look to future business. Short term, you want this repair estimate to be a profitable one. Long term, you want this relationship to be a profitable one. Set your limits and make your decisions accordingly.
Developing and honing negotiation skills is important to reach your short- and long-term business goals and, you never know, but they may help you sell a used car some day.
"Success isn't permanent and failure isn't fatal."
Bruce Burrow, AAM, started writing estimates over 30 years ago, has worked for most of the information providers and, as an independent instructor for the last 10 years, has trained estimators all across North America. He is ASE Master certified and an instructor for the Automotive Management Institute. Send questions, ideas, and comments that you would like to see addressed here to [email protected] and stay tuned.
