This article is based on the presentation, “Overcoming Objections,” that Pat McCormick will give at HVAC Comfortech 2003 in Dallas, TX, Sept. 10-13.
Learn from the leaders: this year HVAC Comfortech presents more than 30 speakers providing educational seminars in more than 100 sessions. Mark your calendars to attend today.
To learn more about the program or to register online, visit www.hvaccomfortech.com.
by Pat McCormick
Anyone who sells a product or service knows about the price objection. We’ve all heard it before: “The contractor down the street came in a lot less than you. I can get it for half the price.”
Sticker shock is like a knee-jerk reaction for most people — a conditioned response to hearing what something costs. It has been bred into us. But is price really the most important issue for consumers?
Not according to market research, where survey after survey reveals that people are more concerned about value, quality, and service than price. While everyone complains the price is too high, consumers today are more willing to pay for quality than ever before. For those of us in the HVAC business, that means we need to focus on building value, not lowering price.
How do we work towards overcoming price objection? Start with a value-building process where we sell four things: self, company, product, and convenient financing.
This process consists of the following six primary steps, organized into a well-planned presentation.
Step 1: Launch a Like/Trust Relationship
People do business with people they trust. Trust begins or dies with the first phone call. Was the phone answered by the third ring? Was the caller put on hold too long? Was the initial contact friendly and helpful? Every customer expects to be treated like he or she is the most important person in the world.
An opportunity can also be sealed or scrapped based on whether you arrived on time, parked in a considerate spot, and greeted them cordially with a friendly smile and a handshake.
Missing an appointment is a common complaint about the service industry. Consideration, congeniality, and appearance pave the way for an opportunity based on value, not a low price.
Step 2: Provide Proper Diagnosis
Just as a good doctor would interview a new patient, you must ask a customer the right questions and find out the symptoms before you can correctly diagnose the problems. Performing a proper load calculation, examining the air distribution system, and conducting a comfort needs analysis will allow you to cover all of the bases and provide a solid foundation for a dynamic presentation.
Step 3: Build a Foundation of Credibility
This stage of the presentation transitions from selling ourselves to selling our company. In an Equiguard study that asked more than 10,000 consumers what the most important factor was when selecting a heating and air conditioning contractor, the largest percentage responded that the company’s reputation mattered most.
The best way to reflect your organizations attributes, including reputation, is with the careful construction of a credibility booklet or informational brochure.
Give your customer a pictorial tour of your company. Photos of your workers donning shoe covers and rolling out protective mats goes a long way in helping consumers overcome their fears of doing business with a contractor.
Awards, sponsorships, certificates, and testimonials should also have their place in the booklet/brochure. Just remember to keep it short. It shouldn’t take more than five minutes to present.
Step 4: Demonstrate Strong Features and Benefits
Few customers are interested in the technical aspects of their comfort systems. They’re more concerned whether it will make them feel more comfortable. Be brief with the features and expound on the benefits.
For example, you might mention that the furnace they selected to satisfy their comfort needs has a variable speed blower motor with a continuous fan (features). It cleans the air 24 hours per day, 365 days per year. This should help with any allergy problems and reduce doctor and cleaning bills. These are benefits.
It’s important not to exaggerate the benefits. A continuous fan won’t eliminate allergy problems. A service agreement won’t eliminate breakdowns. What you have to offer is plenty good without exaggeration. Just be honest and enthusiastic as you share your beliefs with your customers. Everyone wins!
Now we need to earn the right to proceed. Have we built enough value to move to the last two steps? Don’t be afraid of the direct approach. Ask if this sounds like a system that addresses all of their comfort needs. Ask if your company sounds like one they’d trust to install and service the system. If you get affirmative answers, you’ve earned the right to present the total investment.
Step 5: Offer Financing Options
Can you imagine an automobile dealership without two or three good sources of financing? Retailers know how to make their products and services affordable. As the cost of labor, equipment, and overhead continues to rise, financing becomes more important.
A good retailer in our industry should design a financial worksheet that displays at least three options: credit cards, unsecured money, and secured money.
Most contractors accept credit cards. It’s no secret that it’s becoming a plastic world. The more credit cards you accept, the better.
Unsecured money is also very common in our industry. It’s offered to us by various lending institutions in revolving and term formats. The buying power of your preferred manufacturer can often result in lower interest rates and promotional discounts. Some institutions offer the added benefit of calling in for a fast approval while your representative is still in the customer’s home.
The use of secured money in our industry is very rare. Only top retailers use it on a regular basis. If you really want to differentiate, offering secured financing is a good way to do it. It has longer terms, which could result in a bit of a wait for credit approval and a little more paperwork. The extra effort usually pays off with lower interest rates, lower monthly investments, tax-deductible interest, a better approval rate and loan consolidation features.
Now use the alternate choice technique to ask for the order: “Of these three options, which best suits you?” Then shut up! If you remain quiet, you may not need step six.
Step 6: Narrow it Down to the Final Objection
Even if you’ve done a good job of building value throughout your presentation, you may still get the knee-jerk reaction to the price. As stated earlier, it is a conditioned response. Price objections may start flowing at this time. Don’t despair; objections are stepping-stones.
First, interpret what the prospect means by his or her statement, “Your price is too high.” It could mean any of these: “The price is fair, but I just can’t afford it,” “The price is more than I’m willing to part with to get the system,” “The price is higher than I would have to pay elsewhere,” or “I’ll just say the price is too high and get rid of this guy.”
The only logical way to narrow it down is by asking questions. The first thing you should do is ask a question to confirm that it really is a price objection. Example: “Is price the only thing holding you back from owning your comfort system?”
Now that you’re sure that you’re dealing with a price objection, develop a series of questions to narrow it down further. Example: “Are you referring to the total investment, monthly options, the value of the system, or the difference between us and the competition?”
You can continue to narrow by asking questions like: “If our competitor is that much less, what does that tell you?” or, “If we were exactly the same price as they are, whom would you go with?” When they say, “You,” ask: “Can you please tell me why you would prefer us?” They will usually feed back the value-added benefits you emphasized in the first five steps. After they’re done, sincerely say: “I think I can see the difference, can’t you?” They won’t argue with themselves.
Most retail sales representatives in our industry could close the sale if they just asked enough questions to arrive at the final objection. Once you’re there it doesn’t take much more effort to obtain agreement.
All of the hard work is done. It’s time to put the icing on the cake with a quality statement — “Many years ago our company made a very important decision. We decided that we would rather explain the price one time, than to apologize for poor quality forever. I’ll bet you’re glad we made that decision, aren’t you?”
Make a habit of using the tools in this six-step process and become an expert at building value to overcome the price objection.
Pat McCormick, of Sales Excellence Training (SET), is dedicated to his systematic, step-by-step, approach to the retail sales/service process and the betterment of the home improvement industry. For information on workshops, seminars and selling tools, call 800/779-8738 or [email protected]