I received a follow-up from a salesman, to whom we shall refer as Jason. He was featured in the story “Two Sides” in the March and April 2008 issues of Contracting Business. Jason’s problems are shared with HVAC salespeople, so I’ll share them with you and provide my recommendations.
I see I’ve been providing you with a lot of good material for Contracting Business.
Since I started your training program, my sales have improved. I no longer want to bolt from the sales call when things go bad. I’ve closed deals with newly-learned sales tools. I’ve set rules for myself to keep control of the call, and my confidence has improved.
My problem is getting past the price objection. I feel that the customer wants me to do the work, but can’t justify the price. My prices have been set by a highly recommended industry consultant and myself.
Today, during a call, I asked the prospect “How do you feel about what I proposed?” He said he liked it.
“How do you feel about the ability of my company to do this job for you?” He said from what he knew at this point we seemed fine.
“How do you feel about the price?” He said I’m the highest so far, and proceeded to show me a competitor’s bid for $6,000 less. The customer concluded that both quotes were for the same amount of work.
It was not for the same amount of work. I added in duct repair that was needed. The customer didn’t know anything about the ducts needing repair until I pointed it out to him. I also revealed that he could benefit from some Indoor Air Quality (IAQ) products. I proceeded to talk about my installation practices, my 100% Satisfaction Guarantee, follow-up service, etc.
He didn’t care. He just wanted to talk about how his other bids were lower, and he feels they’re just as good as my brand.
I tried to redirect his rant by talking about my company, and I showed him testimonials from happy customers.
By this time I had talked too much and went on to the ‘proposal close,’ then out the door. I did leave it open with a follow- up question. The hard ones seem to always go like this, and I feel stuck in a rut.
Congratulations for sticking it out. One of the most important abilities you can have is “stick-ability.” Just do it. Don’t quit! No excuses!
I hope you realize what an inspiring individual you are. You’ve already inspired two articles in our industry’s most read publication and now you’re inspiring another three. I’ll respond to your challenges in this month’s issue and the next two.
The competitor’s quote
When the customer shows you a competitor’s quote that’s lower than yours, it’s usually the lowest price they’ve acquired from someone from whom they don’t wish to buy. Never let that intimidate you and never act defensive. You’ve always got to project a positive, upbeat demeanor.
I don’t believe they would have showed you your competitor’s quote if they weren’t at least somewhat impressed by you and had at least a small desire to work with you.
The case for testing
You indicated that the $6,000 price difference was due to extensive improvements to the air distribution system and IAQ products that your competitor’s quote did not include. Obviously, you’re inspecting the ductwork, testing the air distribution and the building envelope. You’re also quoting more than the bare minimum, and giving them every opportunity to do what is in their own best interest to do.
You’re doing the right thing.
There’s a sales strategy to starting your recommendations by quoting everything they need (duct modifications, IAQ, etc.) to get everything they want out of their new system:
- It’s in yours and the customer’s best interest to get the entire job done correctly
- If you’re “telling,” you’re “selling,” and people aren’t crazy about being “sold.” When you test equipment, you’re proving their problems to them and establishing the need
- It’s easier to sell “down” than it is to sell “up”
- If you never quote it, you’ll never sell it
- It provides “points of negotiation”
- It’s impressive
- It differentiates your quote
- It “muddies the waters,” making direct price comparisons, even on the same make and model of equipment, difficult.
“Land them” first
Before quoting extensive duct modifications or IAQ, make sure you’ve “landed” the customer on their needs to the point where they say they’re definitely going to get them, regardless of who they choose to hire to do the work. This commitment is normally made well in advance of your quoting them a price.
Ask, “Can you see how you’re wasting money by investing in new equipment without addressing the situation that caused your problem in the first place?”
Then ask, “Can you see how you’re paying for the improvements to your air distribution system in reduced equipment life, preventable breakdowns, and increased utility bills, whether you buy them or not?”
Inform the customer that there is a significant discount in getting it all done at once.
Muddying the waters
When you first quote the price, make it a total, bottom-line price, with everything included.
They invariably will ask how much the duct modifications alone cost. When you tell them the price, tell them the price of your making a separate trip out just to do the duct modifications, with no equipment change out. If you’re priced properly, this will be significantly higher than the price to do the work while you’re there doing everything at once.
For instance, say the equipment installation alone is $6,000. Your quote is for $12,000, and that includes duct modifications and IAQ. Obviously, it costs $6,000 more to do the duct modifications and IAQ when they’re done as part of the equipment change out. Because you’d lose efficiency by going out to install replacement equipment on one day, and making a separate trip to do the improvements to their air distribution at a later date, you’d have to get $8,000 for the exact same work if they were purchased separately. Just answer, “$8,000.”
There’s a good chance the prospect will say something like, “Well, if I take the duct modifications out of the picture, your price for the equipment seems right in line with the rest of the quotes I’ve gotten.”
This isn’t misleading; it’s completely honest. The question was, “How much are the duct modifications alone?” and that’s what you told them.
This might lead to the question, “Can I just buy the equipment for $6,000?” The answer is no. Just like the duct modifications, you’re able to charge them less for the equipment when you’re doing the entire job at once as part of your total comfort package.
All of this helps you reinforce the fact that there are significant savings in the form of discounts to getting it all done at once.
Next month, I’ll cover what you do when they’re just not interested in correcting their air distribution or indoor air quality problems.
Charlie Greer is the creator of “Tec Daddy’s Service Technician Survival School on DVD,” and “Slacker’s Guide to HVAC Sales on Audio CD.” For information on Charlie’s products and speaking schedule, visit his website at www.hvacprofitboosters.com or call 800/963-HVAC (4822). Email Charlie at firstname.lastname@example.org.