9 Tips to Make Estimating Less Disruptive, More Productive
Can Agile Project Management Help Streamline HVAC Contracting?

At the end of the day, what HVAC contractors really want is to make life better for their customers. They want to provide the best quality systems and create the most comfortable indoor climates. But naturally, potential customers have their bottom line in mind, so sometimes they balk at the price.

To maintain your profit margin and still win the sale when a potential customer plays the price card, try these strategies. Some are “heat of the moment” tactics and others are long-term commitments to an overall pricing philosophy. The key is to stay positive and always listen to the customer. Often the best tactic a Salesperson can use is to ask questions to help pinpoint the prospects true needs.

  1. Know what “too high” means. Sometimes potential customers cut off a salesperson by announcing the price is too high just to stop the pitch. But if they’ve listened to your entire proposal with interest and “too high” is the last hurdle, you need to interpret what they mean by “too high.’’
    • Too high could mean more than they can afford. In this case work with them on financing or an alternate payment structure. Suggest extending the payments out over a longer time. Remind them that if your proposal would result in lower maintenance or energy costs than they’ve had with their old system, they could budget those savings to cover what they deem the “too high” price.
    • If by “too high” the customer means they can get the same thing somewhere else for less, then you need to find out if they are comparing apples to apples. Try to find out what the competition is offering and point out the differences in what they would actually get for their money by purchasing from you. This is an opportunity to talk about value. Maybe the initial upfront cost of the system you are proposing is higher, but what they can expect to spend on maintenance or energy usage will be drastically lower than what the competition is proposing.
    • The third possible meaning of “too high” is that what you are selling is not worth the price to them. Sure, a Rolls Royce is a well-built automobile and probably worth it’s $200,000 sticker price to some, but for someone with a Chevy Cruz budget who just needs a car to drive 20 miles to work each day, the luxury car is not worth the price … to them. Likewise, if a customer says your price is too high but means not too high for what it is, but for what they actually need, it’s time to backtrack and determine more accurately what exactly they do need. Say something to the effect of, “Let’s go back and make sure I’m giving you an accurate price for what you need.” And, of course, clearly explain why you believe the prospect needs what you are proposing. Point out both the features and exactly how they benefit this particular customer.
  2. Reduce to the ridiculous. Let’s say your price is $1,000 more than the potential customer says he’ll pay. Over the course of a year, that’s less than $84 a month, $20 a week, or $2.74 a day. Ask if it’s really not worth the price of one cup of coffee at a nice coffee shop to have XYZ (here is where you reiterate what sets your product and service apart).
  3. Build from a foundation of credibility and transparency. Today’s consumers feel like they are being ripped off at every turn. Try to compare cellphone plans or buy a new car. You never know if you are getting the best price because companies make it nearly impossible to compare apples to apples. Your best friend claims she’s getting the same thing for less. Your neighbor paid more. What’s the true price of anything these days? Who can you trust to give you a fair price? These questions apply to someone buying anything from a pair of shoes to an industrial HVAC system. There are just more zeros on the end of one purchase.
    • Become that trusted seller everyone is looking for by being as transparent as possible about your pricing. Have a pricing structure and stick to it. Make it a company policy that the price is the price. Have a price list in black and white that you can show the customer. If you have such a policy, giving Ms. X a “special one-time reduced rate because she is a preferred customer” won’t be thrown back in your face by Mr. Y who heard what Ms. X paid and wants to know why he isn’t a preferred customer too.
    • Show each customer how you’ve come up with the price quote. Make it clear, but also show how you struggled to get the number as low as you did. It may make the customer sympathetic to you if they see how slim your margins are. Tell them how long these prices have been in effect or how long you’ve gone without a rate increase despite increased costs.
  4. Only say the big number once. If you’ve quoted a price and gotten resistance, don’t keep repeating that number. Ask what price they had in mind or could afford. Then, as stated above, talk about the rather small difference. Or propose a payment plan and stress the (affordable) monthly payment amounts. And reiterate the numbers that refer to any savings on maintenance or energy that will result from this purchase.
  5. See the price objection as an opportunity; not the end. It’s easy to be insulted when someone objects to the price you just quoted. Do they think you are a con artist? Do they doubt your integrity or your intelligence? No. They are just doing what our “buyer beware’’ culture has taught them and looking to protect their interests. Put yourself in their shoes, saying, “I know it seems like a big investment, but …” and then reiterate the value. Take price objection as an invitation to further educate the customer on the features and benefits of your products and services.
    • Value is the most important selling point when dealing with a price-conscious customer. Without value, every price is too high. In other words, on a sunny day the price of an umbrella, whether it’s $1 or $100, is seen as too high. When it starts to pour on someone walking to an important business meeting in a new suit and freshly pressed shirt, a $100 umbrella may be worth every penny.
    • In 1892, writer Oscar Wilde defined a cynic as someone who knew “the price of everything and the value of nothing.” This quote may bring a specific customer to your mind. The key to winning that cynical customer over is the same as it was in 1892 … getting him or her to appreciate the value of what you are selling. And doing it with a respectful, positive attitude will go a long way toward a long-lasting mutually beneficial customer-contractor relationship.