Finding techniques to disarm difficult customers and provide a great customer experience is key to the success of your contracting company.

In this week’s episode of Cracking the Code, learn how to keep your homeowners comfortable throughout the sales process by using third-party validation and analogies they can understand.

Plus, your selling techs will learn to sell more service agreements and how to overcome the “I want to think about it” objection.

All that and more, on this week’s episode ofCracking the Code!

When you only have one homeowner present during the sales process, you run the risk of wasting everyone’s time.

In this “Clip of the Week” from Cracking the Code, sales expert Weldon Long demonstrates proven techniques to accommodate all decision makers and offer the best solution to their problems.

Watch the clip below, and visit EGIA.org/Show to watch the full show for more on in-home sales.

Question: Do you recommend multiple sales tiers? If so, how should I price them?

Drew Cameron; President, HVAC Sellutions & Energy Design Systems, Inc:

Yes, we do recommend having multiple tiers and lots of people wonder how many you should have. We typically like to see somewhere between five to seven. If there are fewer than that, it doesn’t give customers enough choice. Most manufacturers have seven levels of equipment available to you as a contractor, so you should make all of those options available to your customers.

Some people might say five to seven sales tiers presents too many options, but that’s not necessarily the case. There was a study done in the 1970’s on 35mm cameras. When people were offered one option, the majority of them didn’t purchase a camera. When they were offered two options, about half bought. When they were offered three pricing options, nearly everyone bought a camera and the majority bought the middle-tier option.

In 1994, Notre Dame did a study to find out how many pricing options would be too many for consumers and found that six or seven is the ceiling. So, our price book has five to seven options based on the contractor that we work with. The nice thing about having an odd number is that there’s an actual middle to the offerings they have when they lay them out on a page. Tiering that from top-of-the-line down to entry level is very important.

Having that high priced, max benefit package at the left of the page and the lowest priced, entry level package off to the right shows them that you can accommodate their price point. You want to show the customer that they could invest $20,000 to heat and cool your home, but you could also invest just $6,000. More importantly, you could invest as much as $220 per month, or as little as $80 per month.

I would position the monthly payment with some of the financing we offer through EGIA. I would position the monthly payment as the main number you offer, with the total investment under it in a smaller font. I would use some of the financing that takes you out to 10 or 12 years at a low interest rate to really promote affordable monthly payments. Most people in the market today are payment customers. So that’s how you should position these things from top-of-the-line to entry level.

Also, vary the benefits that come with those packages, such as benefits, warrantees, and guarantees. I don’t like to include all of those ancillary accessories like UV lights, humidifiers, and air cleaners with the equipment. I want the equipment package tiers to be sold by themselves. Anything else you should add on after that. So, you want there to be multiple tiers and you want to use monthly payments to show that they’re affordable.

Now, how should you price them? I would reduce the amount of net profit I want to make at the entry level package. Let’s say 10-12% on the entry level solution and 15-20% net profit on everything else. I also might lower the commission I pay a salesperson on the lower level solution. That’s going to make that lower level option very competitive when compared to any other company who’s offering that lower level equipment.

Then you can have a gradual step up in price as you increase the efficiency of equipment. When you get into the higher tiers, the equipment is going to be more expensive and technologically advanced. As you step up in technology, you step up in price as well. So, on your page – from left to right – you’re actually stepping down. Your customers have to give up benefits to get a lower price. You’re going to have a jump of $1,500-$2,000 when you go from standard technology to variable-speed and variable-staged equipment.

If you price these things properly and get the monthly payments right, you’re going to be where your monthly payment is about $1-$3 per day as you step down. This means your customer’s payment will drop $30-$90 per month. That makes sense to people. When you start jumping thousands of dollars from one price point to the next, customers can get intimidated. Representing the price in terms of monthly payments allows you to represent the price difference in a way that customers understand and makes it easier to sell the next highest package.

This is the weekly Ask the Experts free excerpt. To listen to all of this or past calls, or to see the schedule and register for future calls, click here.

The following resources have been added to the Contracting Best Practices Resource Library. To access these new tools, visit the Best Practices Library.

Videos

1.12 – Family Business Dynamics – Dealing with Family in a Small Business: A family business is an amazing type of environment, yet it can often come with challenges that a non-family business will never encounter. The relationships dynamics can sometimes be more complicated due to the familial connections. In this video, learn some of the processes a small business can implement – or at least consider – to successfully navigate working with family members.

Not an EGIA member? – Start your 30-day free trial to access these new items, along with hundreds of other useful videos, templates, and documents to help you achieve success in sales, marketing, training, and much more.

Service agreements are an important tool that keeps business flowing during the shoulder seasons.

In this week’s episode of Cracking the Code, Gary Elekes explains the wide-ranging benefits of service agreements and how to get your technicians to sell more of them.

Plus, your CSRs will learn how to handle the time objection and your sales team will learn how to solve more problems and make more money!

All that and more, on this week’s episode ofCracking the Code!

The decision to purchase an HVAC system is a big one and homeowners are often concerned more about what type of equipment brand they’re getting than who is actually doing the work.

In this “Clip of the Week” from Cracking the Code, HVAC sales expert Weldon Long teaches you how to position your expertise, not the equipment brand, as the key element of a successful install.

Watch the clip below, and visit EGIA.org/Show to watch the full show for more on in-home sales.

Question: Do you recommend giving a gift on a sales call? If so, what works well?

Weldon Long; New York Times Best Selling Author & Sales Expert:

I talk a lot about a guy named Robert Cialdini who’s wrote a lot of books on persuasion and he talks about the “Principal of Reciprocity,” which is basically “You scratch my back, I’ll scratch yours.” He talks about businesses giving small gifts to their customers, such as Whole Foods offering free samples, because it engenders a feeling of obligation to return the favor. Not everyone does it but there is a lot of research that says enough people do to make it worth the effort.

In the home services industry, there’s also research that this is effective. If you do something nice for a homeowner, they will be more likely to buy from you. You have to be careful about being overly gratuitous and obvious. If a homeowner suspects that they’re being manipulated, it can actually backfire. It has to be done in a subtle way that makes the homeowner feel appreciated.

I think the most common thing we see in our industry is acts of service: bringing in the garbage cans, picking up the newspaper, or helping them change a light bulb. So many of those things are built into the sales process because they leverage the idea of reciprocity and create a feeling of obligation for the homeowner to do something nice for your company in return.

To answer this question, I would say to be cautious of providing a very obvious gift up front. I would focus on small acts of service that are more authentic. For example, I was running a call with a young salesman and 10 minutes into the call, the elderly homeowner informed us that her garbage disposal was broken. I don’t have any plumbing skills – if my disposal was broken, I’d absolutely call a plumber.

But because of the principle of reciprocity, I thought it was a good opportunity to teach this young salesman about the benefits of doing things for people. So, I got under the sink and took the thing apart, found out there was a small fork lodged in it and fixed it in about an hour. It was really messy and dirty, and of course she was extremely apologetic. But I was essentially selling for the entire hour. I did my whole sales presentation with my head under the kitchen sink. I put it back together, got up and washed my hands, sat down at the kitchen table with her and within 15 minutes, the deal was closed.

The crazy thing was, the homeowner told us that her plan was to just have us out for an estimate and talk with a few other companies to get prices from them. But after we spent an hour fixing her garbage disposal, she felt like she needed to go with us. And I thought to myself, “Yeah, that was the whole point!”

So, know that the reciprocity principle is real and you have to be authentic and sincere with it. There are many items you can give, but be cautious of providing any gift that may come off as overtly manipulative. Think about simply going the extra mile with your homeowners and provide acts of service.

This is the weekly Ask the Experts free excerpt. To listen to all of this or past calls, or to see the schedule and register for future calls, click here.

In the July 2019 Snapshot Survey, we asked contractors about their short-term business goals. Here’s one survey question and its results from the summary report, which is now available in its entirety to EGIA members.

Question: Do you have short-term business goals?

Whether you are looking to expand to a new market, add a vertical, or acquire new leads, short-term business goals can help you sustain momentum and achieve success over the long term. 88% of contractors that responded to our survey actively set short-term business goals, whereas 12% do not. Without setting goals and putting them into writing, it may be difficult to track, evaluate, and optimize your business operations. EGIA has created vast resources to help you set and reach goals – Visit the EGIA Best Practices Library to access these valuable tools.

Here’s what Ellen Rohr, The Business Makeover Expert®, has to say:

“Short-term goals set more specific milestones that we can achieve as we pursue our long-term mission. They need to be specific, they need to have a time frame, and must support your big-picture objectives.”

Login to access the full research report on Short-Term Business Goals.

For a deep dive into leadership and related topics, access training materials, recommendations and education pieces in the Contracting Best Practices Library, available in your EGIA Member Dashboard.

Having a transparent conversation with your homeowners about price considerations can help you close more deals.

In this week’s Cracking the Code episode, learn how to use third-party validation to strengthen your brand value and overcome the price objection.

Plus, your CSRs will learn how to prevent one leggers and your selling techs will learn how to sell on trust.

All that and more, on this week’s episode ofCracking the Code!

There’s no way to tell how a service will be fulfilled until after it’s paid for, so getting 3 bids really doesn’t protect your homeowners.

In this “Clip of the Week” from Cracking the Code, learn how providing money back guarantees can help convince homeowners to trust your company without 3 bids.

Watch the clip below, and visit EGIA.org/Show to watch the full show for more on in-home sales.