Even if people can afford what you are offering will they agree to spend it?
Some will. Some won’t. I don’t know of any studies about this, but I often hear sales people say that those with the most money seem to be the stingiest when it comes to heating and air conditioning. They might have a Lexus in the driveway, Boston Whaler in the garage, $30,000 home theater, but want to go with an 80 percent furnace and 13-SEER air conditioner. I’ve also heard the story about the seemingly low-income customer who buys the best — and pays cash. Go figure.
Both stories reinforce that our job does not include making any judgment of what the customer will or won’t want, and can or can’t afford. Just give them choices and ask for the order.
When customers object to the amount of money, they are questioning the value of what you are offering. Value is the sum of all of the benefits the customer will gain compared with the cost. A terrific value is one where you receive more than you would have thought you’d get for the money you spent. Remember the key benefits that build value: saves money, more comfort, peace of mind, quieter, improves family health and convenience. Repeatedly point these out when discussing products, and your company and you will have far fewer price objections.
Our industry does a great job training us about the products. We learn all kinds of facts and data including things like voltage, cfm, dimensions, voltages, SEER, AFUE, coatings, decibels, and so on. How much does this mean to most customers? Not much. I think all of that data confuses most people, and it actually drives some to get other bids just so they can learn more and better understand what they are buying. I recommend you leave all of your technical jargon at the shop and learn how to translate the facts and features of the products into benefits.
The six benefits I mentioned earlier are all you need. Every time you say a fact or feature, simply follow it with the transition phrase “and what that means to you is ________.” Before you know it you’ll be skipping the features and going right to the benefits, building value along the way.
One of the most compelling, valueadding stories we have when selling high-efficiency HVACR systems is the excellent financial return-on-investment (ROI) we have to offer. As you will see, there will nearly always be a ROI that exceeds other investments such as savings accounts, certificate of deposits, and certainly the recent stock market returns, and at very low risk.
Simply put, ROI is the money returned by an investment, divided by the investment amount. In HVACR terms, the investment is, of course, the total amount we are asking them to spend. Typically, it is called the “price” or “cost”. I suggest you start calling it the “Total Investment.”
The interest or return is represented by the Estimated Annual Energy Savings. For example, you might propose a system including a high-efficiency variable speed furnace, high efficiency air conditioner, high-efficiency air filter and programmable thermostat for a Total Investment of $7,000. Depending on the weather conditions, utility rates and customer usage, the annual gas and electric energy savings might be $350. The ROI would be $350 / $7,000 = 5%. Pretty darn good!
But when your customer invests $7,000 in a high-efficiency system and gets a $350 annual energy savings, those energy savings are NOT taxable—so the 6.7% ROI is ALL NET to the customer!
Can ROI be an effective objection handling tool? Absolutely! Let’s say the customer says the $7,000 system might be nice but they thought they would get by with only spending $5,000. In addition, the other two “bids” were around $4,000 for basic efficiency, but good systems. It’s time to again make your points about the incremental benefits of the high efficiency system: more comfort, quieter, more peace of mind from better equipment — and an overall 56.7 tax free ROI. For some customers that will be all it takes to convince them.
There’s another way to look at the excellent utility bill savings today’s top-of-theline systems produce. Consider the lifetime energy savings from a system that will save the customers hundreds of dollars a year — perhaps up to nearly $1,000 if their system is really old, oversized and poorly maintained. Then factor in the inevitability of increased natural gas, oil and electrical costs. Over a 15 to 20 year life of the properly maintained system, the energy savings will often pay for the entire investment. I challenge\ you to name one thing that provides so many benefits, for the entire family, 24 hours a day for 15 years — AND pays for itself! Nothing compares. Now THAT’S VALUE!
When you are offering highend systems, as I hope you are, I expect you to hear “That’s more than I want to spend,” a lot. They might not spend that much, but then again they might. Just ask. If they say no, then start taking things away. It’s okay—it’s their home, it’s their family, it’s their money —let it be their choice. Good Selling! n
Tom Piscitelli is president of T.R.U.S.T.® Training and Consulting. For more information on how his System Selling In-Home Sales Call Training DVD, CD and Self-Study Workbook can help you sell more jobs at higher margins and higher prices go to www.sellingtrust.com.
>> To pose a question to Tom, go to www.hvacrbusiness.com/forums
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For an illustration and explanation of how customers view price and value, go to: www.hvacrbusiness.com/downloadcenter (located under January 2009) or view Sales Scale
