How often do you give a customer a fair market value for their trade-in, only for them to come back with a counter offer that’s much higher? What do you do when they just want more?
I’ll share the typical responses that I believe are not effective. And then I’ll teach you a close that will help you show your customers how sometimes what they ask for is not very reasonable.
In my experience of training sales teams, I find these 2 common ineffective responses to the trade-in value objection:
- “Let me see what we can do”
- “If I can get my manager to do that, would you do the deal?”
Why are these responses not effective? Two main reasons:
- You as a salesperson come across as lacking authority
- You and your dealership lose legitimate profit for no good reason
So what is a better response to a customer who gives you a counter offer that’s significantly higher than the fair market value your dealership is willing to pay? How do you respond when they just want more?
Let me show you a close I call Relative to Value Close. It will help you explain to the customer that their offer may not be as reasonable as they may think it is.
The basic premise is to use the difference between your fair market value and their value and then apply the same percentage to the price of the car they’re considering.
Here is an example. Let’s say you’ve offered $8,000 for a trade-in, and the customer comes back asking for $10,000. The difference is $2,000. They’re asking $2,000 more, or 25% more, than the fair market value of their car. Take the same percentage, apply it to the purchase price of their new vehicle, and ask them if they’d consider buying a car for that price.
It may sound something like this:
“Mr. Customer, I understand that you’re looking to get $10,000 for your vehicle and I can appreciate that. Based on the research that the management team has done, the fair market value of your vehicle is actually $8,000. You’re asking $2,000 more, or 25% more, than the fair market value. It may be problematic for my dealership to offer that kind of price based on our research.
Just imagine that you’ve done quite a bit of research on the best price of a new car you want to buy. And you found out that the fair price is $30,000. Imagine if a dealership then added 25% more, or $7,500 more to the price, and asked you to pay $37,500 for that car. Would you buy it if you know that the fair market value of the car should be around $30,000?”
The customer will probably say No.
Then you respond, “Unfortunately, I feel I’m going to run into the same reaction with my management if I asked them to pay you 25% more than the fair market value based on their research. So unless we’re missing something, this is the fair market value for your car. You have a great deal in front of you and I believe you should do it.”
This is how Relative to Value Close works.
It can be especially helpful on low end trade-ins. If a customer’s car is worth $1,000 and they’re asking for $1,500 or even $2,000 just because they want more, use this close. If you convert the increase to percentages, you can show that they’re asking for 50% or 100% more than the fair market value. And if you asked them to pay 50% or 100% more for the car they’re buying, they will probably agree it doesn’t sound reasonable.
The Relative to Value Close will help you explain to customers that paying a higher price for a vehicle without a good reason is not something a reasonable person or business would do.
Do you want more Sellchology sales training?
If you’re a sales person, sign up for the Automotive TNT Coaching Program.