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“Let’s meet halfway” or “Let’s split the difference”: AKA The Worst Closing Technique Ever!
We’ve all witnessed the following negotiating technique one way or another. A Seller is selling an item for 20,000 dollars. A buyer offers 18,000. So what’s the next natural move? 19,000 dollars, split the difference, right? WRONG! The “Let’s Meet Halfway” negotiating tactic is one of the most common logical pitfalls of any sales process. Maybe at first glance it sounds or seems fair, or even logical, but it is truly the worst closing technique… ever!
Here is why.
First and foremost, it’s “bad” for profit. Let’s say a manager wants to sell a car for 340 dollars a month and a customer offers 300 dollars. A salesperson proposes to “meet halfway” by settling for 320 dollars a month, thinking it sounds reasonable and fair. This kneejerk logic just gouged the potential payoff big-time. Worse yet, this cognitive “shortcut” is often proposed immediately, without even putting any effort into a more persuasive or logical arrangement. Even if the Customer agrees, which is highly unlikely, and the manager approves, which hopefully he/she wouldn’t, we just blew away 20 dollars times the number of months of profit. That’s 720 dollars for 36 months, 960 dollars for 48 months, and 1,200 dollars for 60 months! Where is all of that money going to come from?
Secondly, it’s terrible for your credibility and reputation. When a salesperson suggests to “meet half way”, falsely believing they’re showing flexibility and fairness, a potential buyer gets an immediate feeling that they’re dodging a huge bullet. The “they were trying to stick it to me!” sentiment immediately surfaces. After a while, buyers just start assuming everything is marked up to be sold at some mystery halfway point. The manager would look like the “bad guy” trying to take advantage of buyers that weren’t as vigilant, and a salesperson would compromise the “agent” role, knowing that $320 is possible.
Additionally, it’s truly counter productive for turning a buyer into a shopper. A potential buyer can’t help but think: “If they are willing to “meet half way” (coming down to 320) just like that, I bet they will come all the way to $300 if I stick to it! In fact, I should have started lower...” $250 becomes the new target at their next stop. Buyers becoming paranoid, doubtful and combative is hardly a sign of progress.
Consider an alternate approach.
Rather than focusing on two large numbers, isolate the difference between them. Remember the first example? What sounds more daunting, 20,000 dollars, or a 2,000 dollar difference? Shifting the paradigm from the large numbers to the relatively tiny, impeding gap number shifts the entire thought process. Back to the car payment example, rather than jumping to the halfway point, ask the customer: “So it looks like we have a 40 dollar gap. Is that it? Let’s work it out.”
Next, you need to properly address the two numbers. Using logic and reason, explain the logic (or more likely, lack thereof) of their stance. Using honest and real facts throughout, walk the buyer through the manager’s position. Build up an ethical and professional case for your stance. Soon, you will identify a moment where a buyer realizes your position is grounded in fairness and fact.
As the buyer becomes more aware of the reasons behind your number and becomes (even a little) more visibly comfortable with your position, buttress your logical appeal with “goodwill.” Emphasize the roles of everyone involved: the salesperson as the agent, the manager as a true professional and “good guy” (remember EMI?), and the dealership’s everlasting commitment to service.
Next focus on reemphasizing the value. Shine the spotlight on the new car they’re taking home, the expectations you’ve exceeded, and the amicable relationship you’ve forged. All the while, the customer is viewing the aforementioned gap as a minor obstacle between all of these things.
Finally, Seek agreement through facial expression, A persuasive eye-to-eye direct look, and then move confidently into a close. Praising the manager’s efforts, extending a confident handshake, and ask for the sale: 340 is more than fair, let’s do it!
Let’s all agree to leave the “splitting differences” and “halfway meetings” to yard sales and flea markets; in this industry, you need professionalism, strategy, and innovation to succeed – not an “old school” consolation “one-liner”.
Comments
Hello Manny and thank you for taking the time to read and comment.
I don't think we have a disagreement at all...
The objective is have the "buyer" come up (to the half way point & beyond).. in fact that is precisely what I am offering in the "alternate approach".
The point of the article is for the "seller" not to propose/offer/suggest/use the "can we meet half way" or "split the difference" techniques.
By the way, some people do buy for logical reasons, some will buy solely on emotions, and some will do both!
Danny, I have to disagree with you on this one, each customer speaks a different language.
I don't ever assume that splitting the difference means dividing down the middle. The difference between the market value you want to sell at and the market value the client want to own at can be split down the middle.
What salespeople don't realize is they just shifted the power over back to them. What market value range are you negotiating now? $19,000 to $20,000. And the kicker is, you didn't give up a dollar yet. Where before your negotiating range was $18,000 to $20,000 because the client was willing to split the difference and we did not accept or confirm the offer we narrowed down the range to negotiate by a THOUSAND DOLLARS in our favor.
"People don't buy for logical reasons. They buy for emotionalreasons." -- Zig Ziglar
Always happy to contribute, grateful for being able to do so, and truly honored by your feedback.
Thank you so much Jerry, Zack, Steve, and Sean!
Danny - when you look at those numbers in the delta amortized over the year, now you have a value based number; logic that slows the customer from reacting to that feeling they are getting gouged. Love it. I was doing the meet me halfway tactic and I thank you for a whole new perspective. Thank you D. Also, please use 'buttress' in as many articles as you can:)
Terrific post! Thank you. This moronic attempt at closing is manager driven in most cases. It is weak, ineffective, and yet another tactic that makes sales people look buffoonish to the public. The only point we differ on is asking the sales person to "walk the customer through the manager's position." We teach sales people to take ownership of the numbers (which they receive from management). Presenting the proposal as "our" numbers puts the sales person in position to defend, justify, and re-close. Trying to defend or justify someone else's numbers (the "manager's) effectively emasculates any sales person's ability to negotiate and reinforces the consumer's belief that "getting to the manager" is the quickest route to the lowest price. (Odd isn't it, that most buyer's perceived strategy to get the lowest price is through the manager? Makes you wonder why the manager exists.) Presenting any number, price, trade, payment, or cash, that seem to come "from some higher power" negates the sales person's ability overcome the predictable objections and re-close. This is one of the reasons they use the "split the difference" tactic - it's all they can do and it's all they are taught to do. Again, thank you for your spot on observations.
I agree, great post. I've heard it a lot in my dealership. I like to look at it this way. Say you're using this tactic. 8-10 cars a month should be about it, right? Giving away $1,000 gross on say 6 deals would cost you $1,500 from your paycheck plus maybe some bonus money! Why not work in $100's if you must give up money and focus on building more and more value each deal you work?
GREAT Post Danny! I like it, I love it, I want more of it!!