10 Things I learned about Sales from Selling Horses
Introduction – Back in the day – I rode my first horse at the age of 3, and by 16 had started showing and training on a professional level. In order to support my very expensive hobby, I had to learn to buy and sell horses from some of the toughest salesmen and negotiators on the planet – Professional Horse Traders
Customer’s Point of Pain – People who show and compete in barrel racing, choose to buy horses for a couple of basic reasons, ranging from boredom with their current horse, a desire for a more competitive horse, a better looking horse, a horse they get along with better, or just a horse that is more fun. Identifying the biggest reason that your customer was looking for a new horse helped me understand how to present the horse I was selling in a way that highlighted how it could potentially fit their needs.
1 – A picture is worth a thousand words – I started buying and selling horses in the 1980’s when the best way to sell a horse was taking an ad out in a horse classified magazine. This was expensive, and you were limited to usually 10 words or less to describe the horse you were selling. You had to hone that elevator pitch, and get a reader’s attention with just a few words, ads often highlighted a major accomplishment, or the horse’s pedigree, age color, breed and price. You were literally working blind. If you found a buyer interested in your horse, now you had to take pictures on a film camera, get them developed ad send photo’s through the mail and hope that your buyer liked what he saw. This would take days or weeks to work through for each individual buyer. When the internet exploded in the late 90’s and early 2000’s I was able to finally put photo’s on the internet along with a description, and now hundreds of buyers could see the horses I was selling. I concentrated on taking quality photos, with good lighting, flattering poses and angles, and clean backgrounds so buyers could see the product, and not be distracted by anything else. At the time most sellers didn’t take the time to do higher quality photography with their sale horses, if they knew how to scan, crop, retouch and upload them at all. This helped me get higher prices for my horses faster than I could ever do it before and made selling horses much easier, even selling many to buyers across the country without even seeing the horse in person.
2 – A video tells a million words – What’s better than a picture? What can reveal the flaws in a horse, and the strengths in a way that shows a customer that I was an honest seller with nothing to hide, and can highlight the quality of the horse I was selling? Video!!! I sold many very high dollar horses by copying VHS tapes and mailing them to buyers that had seen a photo and a description online. I bought much of my inventory of horses the exact same way. Watching a video you can see how a horse moves, get an idea of it’s personality, training level, soundness and more. When selling anything being able to paint as full of a picture to your customers BEFORE they visit to see what you are selling is important. This leads to building value in advance, and an easier sale with fewer objections to overcome later. Think of how many times you’ve read an article vs. looked at a photo vs. watched a video of something you were trying to learn about. Which was more valuable? Which did you most connect with? Which was most lifelike? Video connects the customer with the product they are buying more than any other medium. Use it if you can.
3 – The bigger your name in the industry, the more you can charge – The reason that professional horse traders and trainers show horses isn’t for the fun, isn’t for the glory, or just to build their ego…. Although these are factors… for the true money motivated, business minded professional it’s all about one thing…. Building maximum value in your customer’s mind. A horse trained or formerly shown by, or formerly owned by one of the more recognizable, more accomplished trainers is simply worth a LOT more to a buyer than the exact same horse trained by someone that nobody has ever heard of because he doesn’t have an established successful competition record. The value to a buyer in buying a horse from a champion trainer, comes in several waves. Ego – the brand follows the horse… much the way that the autograph market builds values in signed balls, jerseys, etc… having a horse from a more “famous” trainer carries value to a customer because of the prestige and bragging rights. Confidence – Buying from someone with a great reputation makes a buyer comfortable in their decision, and makes them feel confident that the quality of horse, training, etc… they bought is higher than the price they paid.
4 – Know how much you’ll sell a horse for before you buy it – A common saying in the horse trading community is “you don’t make money when you sell, you make money when you buy”. Buying a horse that fits your target market’s wants and needs, at the right time, for the right price is the secret to being consistently profitable. Buying or keeping a horse based on emotion, or your own personal wants and needs will cost you money instead of make you money.
5 – Know your costs – feed, maintenance, vet expenses, etc… Horses aren’t just expensive to buy, they are expensive to keep while they are in your inventory. Much like a car has a floor plan cost, horses have a monthly maintenance cost associated with them, and if they get injured or sick, your profits go away and turn into losses. It’s important to turn your inventory over fast, and often in order to stay profitable. It’s better to take a tiny profit quickly than it is to hold on too long and watch it turn into a loss.
6 – Sell the dream not the features – horses can be marketed as a description. Size, color, breed, bloodlines, price, looks, etc… While these criteria are important, buyers are using them as a guideline, not their entire motivation. A buyer who wants a tall horse, may buy a short horse if it meets all of their other wants and needs. Knowing your buyer’s motivation, knowing what they are “hoping for” or what their “dream” is will help you focus on how the horse / car / house / software etc… that you are selling meets and exceeds those needs. Ignore the features, sell the benefits.
7 – Ask a high price – you can always negotiate down – Horse trading 101 is your trade is worthless, and the horse you are buying is out of your price range. Old school horse traders would ask an unreasonably high price for their horse, and aggressively devalue the horse you were trading in. Then 2 weeks later your old horse will be for sale for 5X as much, and the cycle continued. This is harder in the days of internet classifieds because buyers can now market their trades, and have more selection in what they purchase… but asking a higher price for an aspirational product is almost always a good idea. It anchors the value in your customer’s mind, sets an aggressive starting point to the negotiation, and if you meet in the middle (which buyer’s love to do) you’ll make more because you started higher, and your buyer started higher in order to not offend you.
8 – Wealthy people don’t buy on price they buy on value – A common misconception is that people don’t buy products, they buy a payment, or buy on price. This may be true if you are selling a commodity – IE it’s hard to sell a gasoline, if the station across the street is selling it for $0.10 cheaper per gallon. But if what you are selling is NOT a commodity, you are selling something that a person wants and needs, then price can be secondary to value. Nowhere is this more pronounced than with the wealthy. Wealthy people can be notoriously hard negotiators, they can be tough sales when concentrating on price, after all, they worked hard for their money, and they don’t want to just give it away needlessly. They aren’t going to overpay for a Big Mac… However…. If you have something they want, something that they perceive high value in they will readily pay what seems like an unreasonably high price to the average consumer. Luxury brands like Rolls Royce, Rolex, Mercedes, etc… are excellent examples of this. The point is, that while a Rolex and a Timex both perform the same function, reliably telling time, there is a higher perceived value in a rolex and there is a robust market for $20,000 watches that perform the same basic function as a $20 timex. The feature / benefit model doesn’t explain this, they both tell time. But the perceived value of owning a Rolex, whether that value is prestige, bragging rights, self esteem, keeping up with the Joneses etc… is different for the Rolex. People aspire to own a Rolex, people settle for a Timex. With horses people will pay $50K, $100K or even more for a proven winner, or even a top prospect, even though the winnings of that horse will most likely never be worth the price premium over a $10K horse. Even the $10K horse isn’t likely to earn its owner back the extra $5K they spent over buying a $5K horse. So why is there such a high differential? It lies in the perceived value, a combination of both quantitative and subjective value. The more expensive the horse, the more likely it is to win more shows, and give the owner more enjoyment.
To make sense of why someone with money will spend such a high price for basically the same thing that they could have gotten for so much less you have to do a little math…. For someone who makes a $1Million a year, a $100K horse costs roughly the same as a $10K horse costs someone who makes $100K a year. And a $5K horse costs someone making $50K a year. In each case the owner invested 10% of their annual income into purchasing a horse that gave them enjoyment. They each valued that enjoyment as being worth 10% of what they gross in that year. And each buyer had to invest the same % of their salary to “feel” that they had invested enough to gain the same enjoyment. So if you have a product or service that you are selling to the wealthy you have to start thinking in terms of what your product or service costs relative to their income in order to believe in the value enough to ask for the sale. Ask for too little and the value won’t be seen by your buyers.
9 – The profit is in the trade ins – If you are selling a product or service in which trade ins are common, you already know that the best way to make real money with consistency is to offer as little for the trade as humanly possible. This allows the selling price of the horse, car, etc… that you are selling to be flexible, and allow your buyer to feel they got a good deal on the purchase while protecting your profits. The worst deals I ever made selling a horse happened when I allowed too much for my customer’s trade in. The best deals I ever made were when a buyer was so desperate to buy my horse that they practically gave me the horse they traded in. The old time horse traders I learned from would aggressively and consistently devalue your horse, finding every fault they could with it so sincerely and effectively they would make you second guess why you ever owned that ugly fleabag in the first place. Once the deal was done, you were glad you had your new horse… but the sinking feeling that you had been taken started to creep in…
My selling style was a bit different, I gave an honest assessment of their horse’s value, never insulted it, offered a fair price that still allowed me to profit when I eventually sold their horse, and I explained how and why I valued their horse the way I did. Then I didn’t negotiate the price on the horse I was selling, because I had a complete and total conviction that my horse was priced fairly. I kept negotiations focused on their horse’s price, and if they felt the offer was too low, I simply walked away from the trade and said they could buy my horse outright. This usually brought the trade back into the picture, and they left happy making the decision themselves without the bad feeling that they had been lied to, cheated, or otherwise manipulated. I operated with transparency, to the point of even telling them how much I would likely sell their horse for, and in what timeframe, and what costs I would incur to get it there, and what my likely profit would be if all went well. I was accepting the risk of taking their horse in on trade, and deserved to profit from it for doing so. It was open, and honest and most importantly effective, because I wasn’t lying, hiding facts, or using tricks. I presented it as a simple math problem and earned their trust along the way while protecting my profits.
10 – Believe in what you are selling, and you’ll never be a liar – One time I had a horse for sale, and a woman called me on the phone to ask about him. She asked me why I was selling him (his sire was the #1 sire in the world at the time) so inexpensively. I answered, “Because he’s a pain in my ass and I hate him”. This was the truth, this horse and I just didn’t mesh well much of the time, and I had to invest a lot more time in training and working with him to get great results than I did with other horses I had. Training and showing him just wasn’t “fun” for me even though I had a good amount of success showing him. I explained all of this and she bought the horse without even looking at him. We met half way between Ohio and Kansas, and she introduced herself as an attorney and spent a fair amount of time talking about the people that she had sued because they had lied to her, mistreated her, etc… Yet I felt safe because I had been completely honest, had disclosed every bad thing I knew about the horse I had sold her, and knew that I had treated her fairly… I don’t know how well she got along with him after buying him, but if he turned out to be a pain in the ass and she hated him it wouldn’t have been a surprise to anyone.
On the flip side of that horse were horses that I sold as partially trained prospects that were ⅔’s of the way through my training program. This was my favorite time to sell a horse because it was trained well enough to show its talent level, was far enough along for me to be able to say it was trained by me in my style (which was well regarded in the industry) and it was far enough along to show it’s potential but not far enough to know what it’s ceiling was. This means that looking at this horse, I could honestly say I believed that it had the potential to be one of the greatest horses I had ever trained. This was an honest statement, and I had trained and shown some pretty famous extremely successful horses so my endorsement carried some weight. At the same time nobody knew how the horse would end up over time – it could be a world champion in a couple of years, or it could be completely average. A lot of this would depend on the skill of the buyer and how they handled the horse, where they chose to show it, their own talent level, etc… but I had a steadfast conviction about the horse, an infectious enthusiasm and a genuine regret over not being able to be the one to enjoy the full potential of each of the horses I trained. Some went on to be highly competitive, some went on to be average, but they were all honestly represented and the buyer’s knew that. By being honest, earning the buyer’s trust, by being transparent and enthusiastic… by building massive value in the buyer’s minds through my presentation from advertisement, to phone call, to demonstration, to closing, I was consistently able to sell horses for a profit and make some lifelong friends in the process.
11 – The person who walks away with a dollar in their pocket won the negotiation – One time I was trading horses with a friend – he had a horse I really wanted, and I had a horse he wanted. They were both relatively equal value, but he wanted to trade and get a couple thousand dollars in cash, I wanted to trade and get a couple of thousand in cash. We were at a stalemate. After riding each other’s horses, negotiating endlessly, wearing each other out, it became apparent that his barrier to getting the deal done was that he had a need to “win” the negotiation. In the end we traded our horses almost even. I gave him a $1 bill admitting that his horse was worth more valuable and that he was the “seller” not the “buyer”. He was a wildly successful businessman, had made millions of dollars, and quite frankly didn’t need the $1 or even $1,000 wouldn’t have registered on his ledger. But the principle of being the “winner” of the negotiation was so important to him that getting that $1 bill was the deciding factor that got a deal done.
Summary – Remember that buyers aren’t always rational, logical, or thinking in the same way that you are. Put yourself in their shoes, and think about how you are treating them. Are you treating them like a number? Like family? Like fresh meat? One term I have always hated in the car business is calling customers “Ups”. While it’s helpful psychologically to dehumanize our customers in our minds so that the rejection and frustration of working in sales doesn’t drive us completely mad, I have always believed that we should start out by calling our clients “guests” not “ups” – “Potential customers” instead of “prospects” or “leads”. The next time you are presenting to a customer, think about them as a potential lifelong friend. Treat them as you would a friend, and see how your profits grow, referrals increase, and the entire business gets easier. I have a saying that my job isn’t done until my customer invites me to Thanksgiving dinner. In every sale I make whether it’s in horses, cars, real estate, or consulting, my goal is not just to make money, but to earn enough trust and rapport with my client to get invited to thanksgiving…. And most years I actually get several invitations for both Thanksgiving, and Christmas.
John Kaufman provides the easiest to learn / most effective sales training in the world – come get a free objection handling guide and learn 10 objection handling techniques to make you more money today at: www.SalesCoachingLab.com
