The 3 Types of Customers (Part 3 – The Undecided)April 13, 2023
In our business, we generally have 3 types of customers. We’ve discussed the value-based customer, who is mainly after quality, and while he will still ask for a discount, price is not the most important component of the deal for him. We’ve discussed his opposite, which is the cheap customer, the one only interested in the lowest price. He will go for cheaper products and it may backfire on him if the product breaks down much sooner than it should have, making him wish he had chosen quality instead.
And last but not least, there is the undecided customer. The undecided customer can go either way. Sometimes they buy value, sometimes they buy cheap. It really just depends on the product or the service they’re buying.
A lot of people are like this. They’ll drive their Mercedes-Benz to Walmart, because they love their high-end car, but they don’t care as much about something like tennis shoes or sneakers, so Walmart is just fine. They went value on the car, and they went cheap on their shoes.
But here’s the thing. The undecideds are great customers because they are usually willing to listen to you. Why? Because they’re trying to find out whether or not this is the time they should go value or go cheap. And they’re undecided until you give them a reason not to be. The goal is to change them into a value customer.
And when we’re talking about heating and air conditioning, it’s very easy to demonstrate to your undecided homeowner why they should go value instead of going cheap. So they’ll sit there and they will listen to you.
We currently spend far too much time trying to make the undecideds happy by dropping our prices instead of educating them and understanding they may just need a nudge instead of the lowest possible price.
After all, they aren’t actively in search of a cheap price. If they were, you wouldn’t even get the appointment to pitch them. They would have found a way to locate the best price and they would’ve pulled the trigger with one of your competitors. The cheap price guy often makes many calls and does a lot of internet research so he can buy at bargain basement prices. They are the type who often look for the advertisements that show a big holiday sale for most of their purchases.
The undecideds want enough information to tip the scale, and they want kickass service. On the things that are most important to them, they want high quality, high efficiency, and they want it done right. You need to make them realize this is a big decision. It’s not a process you should treat casually. You can’t just drop off a bid and let the price do the talking. You have to be willing to go through your presentation knowing that information is an asset for you, and you will find the undecideds enlightened.
Imagine, if You Can
Again, they seek kickass service, high quality, efficiency and great installs. What if everything we did was designed to attract that kind of customer? Suppose you approach every sales call with the mindset that the undecideds are within your reach. Because if your presentation is done properly, the undecideds can usually be convinced that this is not the time to skimp on price or quality.
And then suppose we do a really good job with the sales process by convincing half of the undecideds that HVAC is a good time to go high end. Imagine your conversion rates and margin with this type of customer. You have to approach the market understanding that you’re there to impress the undecided and the value customers, not the cheap guys. Only one thing will impress the cheap guys and we know it’s a low price.
Not Running a Charity
When you try to make the cheap guy happy, the only way to do that is to make yourself sad in the long run. The only way you’re going to make the cheap guy happy is if you sell an $8,000 HVAC system for $5,000. You take an $8,000 HVAC system, you shove it into a $5,000 budget and he’ll be happy, for the time being.
He’ll still make you crazy though. You’ve already dropped your price $3,000 to get his business. Yet he’ll call you in the middle of summer when it’s 110 degrees outside, 75 degrees inside the house all while wondering why you can’t get the temperature down to 65. He’ll never leave you alone.
The value based guy will pay full retail at a high margin. He’s not a problem, he’s cool as a cucumber and a great customer: “Hey man, when you get a chance, can you come out here and fix this thing? Something’s not quite right.”
You have to understand who your target customers are. Understand that you’re not trying to be all things to all people. Who do you want as customers? You don’t have to try to make everybody happy. You just have to try to make the right ones happy.