Understanding the value of scarcity in your negotiation

I’m a huge fan of the adage that selling is all about telling compelling stories.  Inspired by some great storytellers in my LinkedIn network, I thought I’d share my own true story with you.  I hope you enjoy and find compelling too.

A good few years ago, for a number of personal reasons, I was after changing my beloved convertible Jaguar sports car for a Porsche Cayenne.  A strange choice, but the Porsche had just come out and I fancied a change to this, lets face it, pretty ugly but super quick SUV.  Cayenne’s were as rare as hen’s teeth back then – you very rarely saw one on the roads and I wanted one quite badly.  As much as anything, I wanted to be the first salesguy in my company to have one of these monsters (in every sense of the word) in an otherwise dull BMW and Mercedes dominated works car park.

 The car policy at my company at the time was that the lease company we used would purchase the car at their preferred discounted rate if one was available or a price you yourself managed to negotiate with the dealer and then lease it to you at a cheaper rate.  Never one to shirk a challenge, I set about cunningly planning my discounted acquisition at the local Porsche dealer in Reading.

 For those of you who may know it, the dealer in question is huge.  They supply most Porsche dealers in the M25 area and have a huge stock of new cars at the rear of their building. And I mean huge.  Acre upon acre of brand new cars all wanting a new home.  I called the dealer, enquired on the model and spec I wanted and to my pleasure and surprise they had one in stock.  Result!  The day was December 21st – a few days before their end of year and as we know, the time to make or break year end bonuses in the motor trade.  I could feel a negotiation advantage coming my way already…

 I met the sales guy (lets call him Jason, as that was his name), we exchanged pleasantries and he escorted me through their building and past millions of pounds of brand new Porsches in their secure compound at the back of the dealership to the specific model I had enquired about.  I peered into the car, opened the passenger door, took a big intake of that wonderful brand new car odour and turned around to Jason with the immortal words, “I’ll take it.  Lets go back to your desk and cut a deal”.

Unaccustomed to being the buyers side of the negotiating table, and sipping the expensive coffee that was brought to me, I confidently leaned forward to Jason and asked three simple questions.

1. “Do you want to sell me this car in December”
2. “Do you have anyone else who wants to buy this car from you and pick it up in the next 10 days so it goes towards your annual sales figures"
3. “Do you want to buy my Jaguar as p/x”

 The responses were definite.  “yes”, “no” and “absolutely”.

 Sorted.  The deal was in my sights and the power in negotiation for me had strengthened significantly.

 “Great” I said.  “Then here’s the deal.  I want a discount off the Cayenne.  I frankly don’t care what it is but I want a discount.”  I’d had a few friends with Porsches and all of them told me Porsche don’t give discounts on new cars.  Porsche Policy.  It was my task to prove them wrong.  Afterall, I’m better than that.

 “Sorry, but we don’t give discounts on new cars Mr Dimmock.  Porsche policy” replied Jason.

 “You’re not listening” I responded.  “If you want to sell me that car, and you me to buy it and drive away in December so you can your bonus, you need to give me a discount”. 

 It was 11am in the morning.  I told Jason that I was leaving now, and that he needed to have a discussion with his Dealer Principal (the only guy who can authorise the discount) and call me by 2pm today telling me what the new reduced price was.  If he called at 2.05pm there was no deal.  Jason nodded, we shook hands and I left – the grin on my face was ear to ear…

 At 1.55pm my phone rang.  “Hello Mr Dimmock, its Jason from Porsche…”.  I could smell blood in the water.
“I’ve spoken to my Dealer Principal.  I explained your situation in detail.  Would you like me to repeat verbatim what he said as a result of our discussion?” said Jason.

 My heart was racing.  This was it.  I’d won.  I’m just about to get my deal.  The money wasn’t the issue.  The fact I’d beaten the salesguy across the table from me was enough of a victory.  I pressed my phone closer to my ear.

 “Mr Dimmock.  My Dealer Principal told me to tell you that we don’t give discounts on new cars.  Its Porsche Policy.  In fact, he told me to tell you that he’d really rather sell the car to someone who had the right amount of money”.

 What?  Had I heard correctly?  Not only had my less than subtle negotiation come unstuck but I had been given the most polite (and clever) put-downs I’d ever come across in my sales career.  I wanted this car.  Badly.  We’d already agreed a price for p/x on my beloved Jag.  No other dealers had the same Cayenne model in stock and there was a 9-month wait list.  My smile faded quickly.  Then came the hammer blow.

 “So Mr Dimmock” said Jason in a very calm but authorative voice “Do you want to buy the car or not?  If you do I need you to sign the paperwork in the next 24hrs.  Can you pop in tomorrow at 10am?

 “I have a meeting at 10am tomorrow Jason” I whimpered.  “Can I suggest you try to rearrange it Mr Dimmock” he ordered.   “Erm okay” was my feeble response.  “I’ll see you at 10am tomorrow.  Any chance of some floor mats or an umbrella that you can throw in?”

 “See you at 10am tomorrow Mr Dimmock”  

It is here that my story ends.  I turned up the next day at 9.55am.  We signed all the necessary paperwork and I sipped another cup of even more expensive coffee.  Somehow it tasted more bitter than the previous cup I'd enjoyed.  I’d got my new car.  I waved goodbye to my Jaguar on December 29th.  The Porsche as it turns out was quite good fun.  I cant remember every detail of the car now, but the thing that does stick with me is this story.  Not only did I learn a great lesson in buying new cars (I’ve subsequently done a slightly better job on this over the years), but I also took a great lesson away and tried to apply it to my sales career ever since. 

What if the product or service you sold were the only one available.  Would you discount unnecessarily to meet a specific financial deadline under threat of the customer walking away, or would you really rather sell what you have to someone who has the right amount of money???