Have you ever had a customer agree to a replacement, then call while your install crew was on the way to the job, and start negotiating with you? That happened to a friend of mine just the other day.
The situation: This had been a service agreement customer for the past three years. He’d bought a 14 SEER compatible replacement indoor coil from them within the past 12 months.
He already knew he needed a condensing unit when he bought the coil, but, like many, he hoped he could squeeze a couple more years out of his old one.
He ran into problems and the service technician running the “no-cool” call sold him a 14 SEER condensing unit for $4,220.
Where it went wrong: After the sale was closed, the customer noticed the picture of the programmable thermostat in the literature and, as the tech was walking out the door, lightheartedly mentioned that it would be nice if they could throw in the programmable thermostat; that it would really look good on his wall.
The technician agreed that it would good nice on his wall and told him those thermostats run $375 when included as part of an installation, and if he wants one, he can add it to the bill. The customer requested that the technician ask his boss about including it at no additional charge.
The technician saw that comment as, in his words, a “Columbo objection.” You may recall that a signature move of the fictional detective, Columbo, was to pause and ask, “One more thing,” on his way out the door.
To his credit, the technician readily admits that he saw the request as no big deal. He said he’d look into it, went on to his next call, forgot about the incident, secure that this was a firm sale.
The next day, as the installers were on their way to the job, the customer called and informed the incoming call-taker that he’d shopped prices and could get the exact same thing for as little as $3,600 and that he wanted them to match prices or he’d go with someone else.
The technician was updated on the situation during a break, and asked for input from the rest of the class I was instructing. The initial reaction was to get defensive, and to call the customer back and have a polite take-it-orleave- it type of conversation.
Don’t hold it against your regular customers if they don’t see the value in doing business with you. It’s their responsibility to spend their money in the best manner they see fit. It’s your responsibility to enlighten them; to help them see the value in doing business with you.
Many people feel that if you give any price concessions, they’ll just keep pushing you and won’t stop. Yes, they’ll usually push you to see how far you’ll go. When you’ve hit your limit, stop. It’s okay to give a little. You should always leave a little room in your pricing for the negotiators.
We talked it over with the owner of the company and decided that we would be willing to compromise on the thermostat, but we would not compromise on the price; that we needed $4,220 for this installation.
The technician and I worked up a step-bystep procedure, wrote up an outline in advance, and role-played it about four times each before he picked up the phone and made the call.
Here’s the procedure we worked up:
1. Establish the need
Say, “Hello. This is (your name), with (your company). We talked about my changing out your condensing unit with a new, highefficiency model that will make you a lot more comfortable, run a lot quieter, save you money on your electric bill, and put an end to your service problems. Do you remember talking to me?”
Always open with the benefits of the product or service. The customer will say, “Yes.”
2. Show a little courtesy
Say, “I’m not interrupting anything, am I?” Don’t say, “How are you today?” That’s the lamest thing a salesman can do on the phone. It’s trite and cliched.
Say, “I understand that you made a few phone calls and that you’ve been told that you can get the exact same installation that I’m going to do for as little as $3,600, and that you’d like me to lower the price and include the thermostat you’d asked about yesterday at no additional charge. Is that correct?”
If you know the situation, let your customers know you do. It has a calming effect.
4. Get on the same team
Say, “I went to bat for you and spoke with the owner of the company. I told him you’ve been a customer for a while, that you’ve got a service agreement, and that you want to stay a customer. I was able to get the programmable thermostat included at no additional charge. We’ve got a crew headed out your way and they’ll do the exact same installation we talked about yesterday, with the exact same quality, and the exact same warranty for the exact same price we originally agreed upon.”
I told the tech to expect the customer to tell him, “Well, there are some lower prices out there,” and to push a little harder. And, that’s what happened.
5. Startle them
Say, “We feel that, for what we do, we’re the cheapest in town.”
We expected the customer to go a little ballistic and say, in so many words, “I just told you that I’ve got prices for $600 less than yours! How can you say you’re the cheapest?” which he did.
Every now and then, say something outrageous to make sure they’re listening to you. It challenges their minds, gets them thinking, and prevents them from daydreaming.
6. Plant the seeds of doubt.
Say, “Yes, we’re charging you $4,220 for this installation, but certainly you know that it’s not $4,220 in pure profit. For what we’re doing for you, there isn’t $600 worth of ‘wiggle room.’ For someone to charge you $600 less than we are, hasn’t there’s got to be some kind of compromise somewhere?
“You talked to people who quoted you ballpark prices over the phone. We don’t know if their quote includes replacing the pad it sits on or not. We don’t know if their quote includes replacing the outside disconnect, or the wiring from the disconnect to the condensing unit. If you don’t replace it today, you’ll have to replace those items before the condensing unit wears out, which means you’ll ultimately wind up paying more for them over the life of the equipment.
“What about the follow-up service the make sure it’s operating a peak efficiency?
“What about the guys who are actually going to do the work? Have they been factory trained? Are they insured? Can they pass a drug test? Has anyone performed a background check on them? We don’t know anything about these people, do we?”
These are all rhetorical questions; they make their own point and don’t require a response
7. Reassure him
Without pausing, say, “We’ve been in business for more than 30 years. Thousands of people buy from us every year. The vast majority of these people get prices from other contractors and decide to go with us, because they know that we do everything in our power to keep their overall cost of ownership as low as possible.
“We provide the follow-up service that you know you need to make sure your equipment is running at peak efficiency and up to the manufacturer’s specifications.
“You know us. You know the quality of our work. All of our guys can pass a drug test, have a clean background, and have had the training to work on this equipment.”
Say, “We’re at $4,220. The lowest price you’ve received is $3,600. When we take the $375 thermostat into account, we’re only a couple hundred dollars apart. You’re already a (company name) customer. Why not stay a (company name) customer?”
The customer started feeling good about the transaction. He’d “won” the negotiation, got to stick with a “known commodity,” got the products he really wanted, and got the company he really wanted.
The “lost” sale was recovered.