Is your HVAC company pricing the job correctly? (Part 1)
How many times have you seen this happen? You get a call from someone who needs an expensive project done: a furnace, boiler, or water heater replaced, or maybe a remodel of their home that includes a new heating or plumbing system.
You go to their home to meet them and see what exactly it’s going to take to get the job done. You measure, figure, take some notes, and leave promising to be in touch in a couple days with a bid.
You call back in a day or three with a price or email it to them. They reply with a thanks for your time and then bid, and that they’ll be in touch when the rest of the bids come in. You call them back after another week or so to see what they’ve decided. They inform you they’ve decided to go with someone else who was “cheaper” than you.
You wonder again why people make decisions like this based solely on which company was less expensive. Don’t they know there are several very good reasons why your services cost more?
Many people always pick the lowest bid. It’s often from the company that does shoddy work, and after four callbacks and possible legal action, many customers finally realize they’d been better off just paying an extra 25 percent up front and had a real professional do their work.
It’s not the customer’s fault they do this. It’s yours.
Why people choose a contractor
First, ask yourself why and how customers make their decisions on whom to hire for a project. Assuming they aren’t the customer who only looks at price, they look at three basic things:
- Trust. Will you show up when you promise? Will everything work like they want it to when you’re done? Will you keep your mess to a minimum and clean up after yourself? Will you be nice to their dog? Will you charge them exactly what you said you would, and not add unforeseen costs?
- They feel listened to. Will you ask them what’s important to them? Will you address their concerns? Will you explain why you are doing what you plan to do?
- Price. Will you give them a decent deal?
All things being equal, if they don’t have any other information, you can guess what their automatic reason to choose a contractor is: price.
Sending someone a detailed list of what you’re including in your price, while important, is not enough.
If you were to need knee surgery and the doctor explained that he would need to do a “left knee arthroscopy with partial medial meniscectomy,” would you be any the wiser? This is what it sounds like when you write “Replace all zone valves and thermostats reusing the existing wiring.” To any self-respecting hot water heat technician, this makes sense. To your average customer? Not so much.
The two sales
In my friend Arne Raisanen’s book Don’t Miss That Sale, it’s explained that when you make a sale, there are actually two sales being made. The first sale is convincing customers they actually want to go ahead with the project. The second one is convincing them they should choose you to do it.
In the process of making the first sale, you’re doing a large part of the work needed to make the second sale.
In the sales world, the first sale is called the discovery process. This is where you ask tons of the right questions. Then you actually listen to their answers.
If you do it right, you’ll create trust and show them that what they think, want and need in getting their project completed is important to you. If you do those things, a low price carries much less weight.
Contractors tend to be technical people who understand the HVAC market well, so many forget that other people don’t have a clue what they’re talking about. They fail to explain terms in a way that’s understandable.
Many consumers aren’t choosing a contractor; they’re choosing a price. As far as they can tell, everyone’s offering the same basic equipment with the same basic results.
And if they’re choosing a price, they don’t care about anything else you have to offer. They’re not dream customers. Unless you’re dying for work, be very careful about agreeing to work for them. They are always the ones who expect more. Because you gave them a cheap price, everything extra they demand from you will take every bit of your profit. It’ll end up being one of those jobs you’d have been better off not doing in the first place.