Why Price Isn’t Everything

Who here has heard of the price objection?

I know that’s a bit tongue-in-cheek, but price objections can be the bane of existence for salespeople. Customers come in all shapes and sizes (and buying mentalities), but we know a certain percentage is uber-focused on price.

If you’ve taken my training, you’ll know a great deal of energy is spent focusing on overcoming the price objection. The sales process is much more than just your introduction, inspection, and asking for the sale—much more.

But about midway through this sales process, there comes a point where I will address the elephant in the room. Here’s a summary of what that might sound like.

Tech: Mr. and Mrs. Johnson, I’m sure that in a big decision like this, the price is going to have a lot to do with your final choice.

Homeowner: Oh yeah, we have to get a reasonable price; times are tough.

Tech: No, I agree. I want to share some information with you from the U.S. Department of Energy and Consumer Reports. There’s an article they published; here’s the excerpt right here (show them). The first thing they say is your contractor should do a heat-gain heat-loss calculation. That’s what we’re going to be doing here today. Number two, they say finding a trustworthy contractor matters most and to be leery of contractors who base their estimates merely on house size or vague rules of thumb. Mr. and Mrs. Johnson, why do you suppose they say finding a trustworthy contractor matters most?

Homeowner: I guess it’s like finding a mechanic you can trust. The installation must really matter. I imagine honesty matters just as much too.

Tech: Exactly, and these are also complex mechanical systems we’re installing. Let me ask a question. I noticed you had that beautiful GMC Denali out in your driveway. Let’s say you went to the dealership to buy a new Denali and you had two of them side by side, identical in every way. Every option, every color, everything was identical as far as you could tell. The only difference is one costs $60,000 and one costs $50,000. This is not a trick question: which one do you buy?

Homeowner: The one for $50,000, of course.

Tech: I couldn’t agree more. However, what if I told you that the one for $60,000 was assembled at the General Motors factory with GM engineers and inspectors, and the $50,000 one was assembled down at the high school in their student mechanic’s program? Which one do you want now?

Homeowner: We’d want the one put together by the engineers.

Tech: That’s exactly what happens in the heating and air conditioning world. We all have the same components. All the major manufacturers produce equipment that delivers efficiency and warranties, and they’re all pretty much the same.

Tech: The main factor in determining whether or not this system will work properly for years to come is going to be the company you choose for the installation. Who is the artisan or technician assembling the parts and putting them together, just like the GMC Denali engineers? That makes the difference, and that’s why the article brings up that point. The Department of Energy goes on to say that national surveys have shown that half of heating and air systems are oversized, meaning a salesperson will sell you a system that’s unnecessarily too large in order to turn a bigger profit.

Homeowner: That makes sense.

Tech: There’s also what’s called short cycling. It’s kind of like city vs. highway driving. Short cycling is the constant starting and stopping, starting and stopping – basically what’s experienced in the city or on a commute. Wears out the brakes, clutch, transmission, etc.
Meanwhile, highway driving gives us much better gas mileage and much less wear on the brakes and the low gears of our vehicles. You want the great gas mileage and efficiency, so we have less wear and tear on the system overall during highway driving.

Tech: That’s very important in cars, but the same holds true for an A/C unit. If someone sells you a system that’s too large, this short cycling is experienced much more often. I’m not interested in selling you a unit that’s too large for your space. I want you to refer me to others after you experience our installation, service, and follow-up. I don’t want your system going out in the middle of a harsh winter storm or a hot afternoon.

(And then I just ask the question that really only has one answer.)

Tech: So Mr. and Mrs. Johnson, would you agree or disagree with Consumer Reports and the U.S. Department of Energy that a proper installation, proper sizing, a good contractor, and other factors are as important, perhaps even more important, than a cheap price?

And almost every time the customer will say yes. They just read the report with you, and seeing is believing.

Why is it so important that you walk them through this? Because it will come up later in the close. When we get down to the end, they might remind you that your competitor is a little cheaper, let’s say $3,000 cheaper.

This is your cue to make 4 points understood:

1. Remind them that when you reviewed the Consumer Reports and Department of Energy studies earlier, they agreed that price was not the most important thing.
2. Your recommendations are not apples-to-apples comparison with a competitor’s, as their quote is likely a barebones system or one that is too large for their home, and may also contain hidden costs outside of their quote.
3. Your system is not $3,000 more expensive… Your system is $3,000 BETTER!
4. $3,000 over the span of their warranty (let’s say it’s 10 years, for example) is only $25/month. That peace of mind is worth it.

We’ll cover more on this in the future, but this example is to show how important it is to establish (earlier than later) that price should not be the only consideration when it comes to choosing between your company and your competitors.