Six steps to overcoming the price objection
Sticker shock is like a knee-jerk reaction for most people — a conditioned response to hearing what something costs. 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 get off “square one” and work toward overcoming the price objection? We start with a value-building process where we sell four things: self, product, company, and convenient financing.
The value-building process consists of six steps, organized into a well-planned presentation:
- Establishing a trust relationship;
- Providing proper diagnosis;
- Building credibility;
- Demonstrating features and benefits;
- Offering financing options; and
- Helping the customer understand why they have made the right decision.
Six stepsStep 1: Launching a like/trust relationship. People do business with people, and they develop trusting relationships through simple interactions and observations.
The trust relationship begins — or may be doomed — with the first phone call. Was the phone answered by the third ring? Were they 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 be sealed or scrapped on the basis of whether you arrived for your first appointment on time, parked considerately in front of the customer’s home or business, and greeted them cordially, with a friendly smile and a handshake.
Failure to keep appointment times may be the number-one complaint about the service industry. Consideration, congeniality and appearance pave the way for an opportunity based on value, not low price.
Step 2: Providing proper diagnosis. Everyone knows about medical malpractice. In hvac services, delivering a prescription without proper diagnosis is our own form of industry malpractice. Misdiagnosis is rampant in the service industry, so a proper diagnosis goes a long way in distinguishing you from your competition.
Just as a good doctor would interview a new patient, you must ask the right questions and find out the symptoms before you can correctly diagnosis the problem. Preparing a “needs analysis” form with all the right questions and plenty of room for your notes, observations, and drawings helps you cover all the bases, providing a solid foundation for you to build your presentation. An organized approach tells the customer that your company is focused on getting it right the first time.
Step 3: Building a foundation of credibility. This stage of the presentation transitions from selling ourselves to selling our company. Customers want to do business with solid companies. They want to know you have the staff to meet their needs.
Since a picture is worth a thousand words, an informational brochure is a great marketing tool. Photos of your workers donning shoe covers and rolling out protective mats tell customers that you care. Brief descriptions of each department and photos of people at work assure customers that you have the staff to meet their needs.
You don’t need a huge organization to put together a credibility brochure that works for you.
Step 4: Demonstrating strong features and benefits. Now it’s time to sell your products and services. Few customers are interested in all the technical aspects of heating and a/c systems. They are much more concerned about what the system will do for them.
Every feature should include an explanation of its benefits. With a focus on the customer’s peace of mind, the manufacturer’s guarantees and warranties mean more than technical jargon.
Don’t be afraid of the direct approach. Ask whether this sounds like a system they would be happy with and a contractor they could trust. If you can get the customer’s approval for your products, services, and company, the only remaining issue is price.
Step 5: Offering financing options. Informed consumers agree that quality is the best economy. If you have done a good job so far, your price will be a wise investment in top-quality products and services.
Be ready for that knee-jerk reaction to price, because objections may start flowing at this time. But don’t despair; objections are stepping stones to the sale. With the total investment out on the table, it is time to focus on convenient financing options. After that, you have presented the total picture and earned the right to help your prospect rationalize a decision that is truly good for them.
Step 6: Accepting the right decision. There is much truth to the old saying, “You get what you pay for.” If you deal with the lowest bidder, it’s best to add something for the risky run. The price objection is a wonderful opportunity, for it allows you to reiterate the wisdom of making a purchase based upon the reliability of the company and the superior quality of the products and services you offer.
It is always a challenge, but it need not be a barrier. Savvy customers know that buying a new heating or air conditioning system is not the time to cut corners. The secret to your success in overcoming the price objection is increasing the value and benefits of the system you are selling, rather than getting caught up in haggling about price.