I started one of my recent seminars on in-home selling by having participants read an article about a Midwest contractor complaining about lowball pricing.
All the contractors agreed that they should be more realistic with their prices. They agreed that prices should be based on contractors' profit needs. That night, one of the people attending my seminar went home to find a message from a prospect saying that he was going with another company.
He called the prospect and was told another contractor had offered a much lower price. It turned out to be the same person who brought up firm pricing at my seminar. The experience demonstrates how market prices get set and why they are often the lowest price in the market.
But if you are giving away jobs at the lowest price, you are not selling. Price is never the main reason a customer chooses one company over another.
Let me give you an example of a situation where a low price is not as important as your perception of the value. Say you are in the market for a car. You spent a lot of time looking at ads and buying reports on which cars are the best deal, but you cannot decide. You visit a car dealer and are shown two new cars for the same price.
Which one would you choose? Both have similar engines and fuel-economy ratings. The images people have in their minds about different brands are established by our own experiences, along with years of automotive advertising.
Where's the value?Why can't most HVAC contractors sell consumers on the differences in the value of their products and services?
Only HVAC manufacturers have had much success selling the differences between their products and others in the market. But manufacturers don't make many finished products like the auto industry. Window air conditioners are one of a few products that can be easily installed by consumers. They can buy a unit, take it home and put it in a window, plug it in and it will work. But 98 percent of the products produced in the HVAC industry must be fitted and installed by professionals so the combination of components will operate efficiently and effectively.
I recently read an article that said 27 percent of consumers only care about price. That leaves still 73 percent who are open to hearing about the value and benefits you add to basic equipment when you install it in their homes.
Are all installations the same? You and I know this is not true; yet many contractors allow the work of uninsured moonlighters to be compared to their quality jobs. They let these people control prices and profits. This causes contractors to think they're putting too much into jobs instead of selling quality installations.
It's time to stand up for and begin selling jobs for the price they're worth and creating value in customers' minds.