What Porky Pig Can Teach Us about Sales

Price, price, price. Consumers are obsessed with it. And this forces businesses to stress about it more than just about anything. How do we set the price to attract consumers while still staying in business or remaining profitable? Buyer behavior and our response to it can make all the difference.

Statistically, about 25% of people will buy the cheapest version of a product or service. About 50% will buy the mid-tier, and about 25% of the people will buy the high-end. If we use brick-and-mortar stores as an example, think Dollar General for the low end, Walmart and Target for the mid-tier and Macy’s for the high end.

That’s just the natural way that things unfold in the market based on decades of studied human behavior.

But there is one notable exception to that. There’s one notable exception.

When does it make sense to buy the cheapest of anything?

When you walk into someone’s home, they probably don’t have the cheapest car, statistically, that is. They probably don’t wear the cheapest sneakers. They probably don’t own the absolute cheapest furniture.

So when does it make sense to buy the cheapest of anything? The one and only time I can think of this is when you purchase a commodity.

A commodity can be thought of as anything that is considered to be completely equal or the same across the board, no matter where you purchase it.

Step On It

Gas is a good example. We’ll ignore that there may be some exceptions in gas. Certain companies try to differentiate their gas in their marketing by saying they have extra fuel additives that make their gas the best. But for the most part, gas is pretty much all the same. And the basic steps of getting gas to a location near you are also pretty standardized.

Crude oil (“Black gold, Texas Tea”) is extracted from deposits underground. It is shipped or piped to a refinery and stored in tanks. It is then heated (boiled) to about 1100 degrees Fahrenheit, and one of the byproducts is gasoline. The gasoline is then sent via pipeline or loaded onto a fuel truck headed to your local gas station. In a nutshell.

If you purchase the same octane level from one gas station, it’s almost identical as buying from the competitor gas station down the street. By and large, we like to find a gas station near home or work, wherever it’s the cheapest.

Bring Home the Bacon

Take the commodities exchange in Chicago, for example, where commodities of all types are traded. These are everyday raw materials we use in our economy, like gold and silver, rice, eggs, cattle, coffee, soybeans, and pork bellies, to name a few. After they are inspected and meet quality standards, they can be traded. When a large brand makes a commodities purchase, they can then package the product and set the price.

Again, it’s the job of marketing to make you believe “one of these is not like the other…” Or better stated, “Trust me, ours is better.” Take a look at the labels on the shelf at the grocery store to see what I mean. If you shop for a 5-pound bag of sugar, you’ll likely see the generic brand (store brand) and then some national brands (which will cost more). The only real difference is the national brand may be one we’ve “trusted” for generations that hasn’t let us down, so we pay a little bit more for the peace of mind. I’ll bet we can’t taste the difference between two cake recipes, one using the national brand and the other using the store brand.

So, given the choice between 2 identical products, we will buy the cheapest one. And in our industry there is a tendency for homeowners to classify us as a commodity, thinking we’re all the same.

And that’s the main reason they shop for the lowest prices. Now you and I know that’s not the case at all. There’s a huge difference between most HVAC companies – in efficiency, installation quality and techniques, business practices, and so on.

The homeowner doesn’t know that, so that’s why we teach how to address that in the sales process. We have to educate homeowners to show them we are not a commodity. Our company is as different as Macy’s is from Dollar General.

Perception Is Truth

One of the most important aspects of sales is ensuring your homeowner understands that there really IS a difference in our company, and in our choice of materials, for example.

There is a difference between a single-stage and a 2-stage compressor. There is a difference between a variable-speed blower motor and a single stage. They won’t know these differences if we don’t explain. Homeowners will inherently believe the only thing that separates us from the competitor is the price. And the competitor will use the cheapest compressors, motors, and fittings in order to appear the most affordable. But in the end, the homeowner has to trust your installation and materials will be the most valuable in the long run.

The only item we want the customer to buy cheap is a commodity. We sell our service, our installation, our warranties, and our quality, not pork bellies.