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For years many HVACR contractors have used the good-better-best process to sell new and replacement equipment. A typically good-better-best HVACR offering could be 10 SEER as "good," 12 SEER as "better," and 17 SEER as the "best." This process works because each increase in SEER yields measurable energy savings. The greater the savings, the more money buyers can logically justify investing in the next level of comfort.
By moving from a 10 SEER to a 17 SEER, the buyer receives an additional $3,050 in energy savings over 10 years.
The Greatest Opportunity So Far This CenturyOn January 23, 2006, 13 SEER becomes the minimum efficiency allowed by law. This mandatory industry-wide requirement will create fear for some and huge opportunities for others. The group earning the highest profits is the one who understands the three major flaws in the good-better-best model and does what's needed today to ensure it is using the best sales process tomorrow.
1. Significant differences in energy savings won't necessarily exist. As 13 SEER becomes the minimum efficiency, the financial incentive to move from low-priced, low-SEER to a higher-priced, higher-SEER is too weak to create much of the excitement, logic, and inertia required to move buyers from one level of benefits to the next.
Fortunately, the energy savings that drives good-better-best isn't what matters. People buy comfort systems to be more comfortable, not necessarily to save money. If they only bought units to lower energy bills, they'd never own an A/C or heating system! The greatest energy savings is always o-f-f.
2. Comfort can't be sold like a basic product. Basic products come fully assembled and ready to use.
Comfort systems must be installed one-at-a-time by highly trained professionals in the field under, sometimes, adverse conditions. The installation, more than any other factor, determines the final value. With good-better-best, the focus tends to be on what's different instead of what's important.
3. Consumers want more than three choices. Three choices work when selling sodas, but not when selling comfort to demanding consumers.
Many buyers already know their choices, and they know they have more than three. They use resources like the Internet before buying big-ticket items. If they feel forced into one-of-three boxes, bad things can happen. Buyers either feel they're not getting exactly what they want or overpaying for things they don't want.
(Note: The buyer's confidence in the seller closes sales today and brings referrals tomorrow.)
Remember that comfort means different things to different people. Everyone wants something special from the most vital system in their home. Instead of three choices, buyers want unlimited options customized around their requirements. With good-better-best, most sales fell in the magic middle called "better." As each buyer's needs are met with customized comfort, expect to sell many more two-stage, variable-speed, accessory-enhanced, top-of-the-line comfort systems than were ever sold using good-better-best.
Individual Buying RequirementsTry this little test. Ask questions to determine what benefits your customers want and how much they want them. Give your customers the form pictured in Chart 1 and ask them to fill it out.
Now, imagine that a homeowner has marked the chart, making one number in each row bold. Think of each bold number in the example chart as a weight on a scale. The higher the number, the greater it weighs.
The combined weight of all benefits determines:
Know this: Profitable, top-of-the-line sales can grow 20 percent by offering unlimited choices and customizing comfort around each buyer's requirements.
The Clock Is TickingNoted consultant W. Edward Deming once proclaimed: "Change isn't necessary be-cause survival isn't mandatory." How true!
Business success is fueled by sales success. A flawed sales process can't deliver full profits and customer satisfaction.
The most important thing that HVACR business management can do to ensure full profits tomorrow is to start implementing the most customer-focused sales process it can find today. The best sales strategy is one that uses customized comfort, not energy savings, as the foundation for success, profits, and long-term customer satisfaction.
Steve Howard is president of The ACT Group Inc. He can be reached at 800-515-0034 or steve@NoPressureSelling.com.
Publication date: 03/07/2005