It’s important to remember that in sales, no one thing will work 100 percent of the time. Succeeding in sales is all about doing the very best you can on every call. An important key to this is understanding your homeowners’ concerns and minimizing risk for them, without giving away price discounts.
One third of your customers is the Value Third. A member of the Value Third expects high service and quality, and she is willing to pay for it. Yet even the Value Third will most likely ask for a price concession at some point, but here is the thing: The Value Third will still buy from you even if you don’t drop the price IF you are able to show them reasons, like your service guarantees, quality materials, highly-trained technicians, etc.
The Cheap Third: These consumers base purchases on PRICE ALONE. The customer in this group cares about one thing and one thing only: price. They don’t care about quality. They don’t care about service. They don’t care about anything except getting a cheap price. And the Not Sure Third are just indecisive. But all three groups will ask for a discount.
You never know initially if a price objection is a real price objection or is just being raised out of habit, or on a lark, or, in some cases, as a joke. If you automatically drop the price to get the deal, you will give away precious margins to Value Third customers when it isn’t necessary. And it won’t help the Not Sure Third make a decision.
When someone asks you for a price concession, hold your ground, probe a little bit, and find out if it’s really necessary to close the deal. What the prospect is really trying to evaluate is the amount of risk she might incur by making the wrong purchasing decision.
Lowering risk for your prospects makes it easier for them to buy from you. Perceived high risk makes people start worrying: I want to think about it. I want a cheaper price. I want more bids/proposals.
THREE SIMPLE WAYS TO MINIMIZE PERCEIVED RISK
1. Use your company’s guarantees and/or warranties.
2. Use signature stories as the foundation of your sales process.
3. Build a high level of trust.
Develop a company guarantee if you don’t have one. You know you can always fix it to industry standards. And if you can’t, you would refund their money anyway. So, if you would do it on the back end in a worst-case scenario, why not promote it on the front end in your sales presentation to minimize risk and close a ton more business at higher margins?
The Signature Story is a vital component to separate your company from the competition and their guarantees. Signature Stories define the character of your company and provide a way to “prove” how your company responds when the chips are down.
Early in my first HVAC business, I did two things which later formed the basis of our guarantee and provided our signature stories. When my techs could not repair a new system to work properly, I said to yank the first one out and install a higher-priced system at no additional cost. Another customer, an elderly lady, could not express exactly why she was not happy with her system, but wanted it removed and her money refunded. Though we had done nothing wrong, I obliged her and refunded every penny. It turned out she just needed the money rather desperately. In both cases, I asked the customers to write a letter when they thanked me, and we used those letters in our sales presentations.
I viewed each of them as opportunities to prove that my company was willing to do what my competition would never do.
How many millions of dollars’ worth of systems do you suppose we sold by sharing those letters with future prospects? I can tell you. It was exactly $20,000,000, because those Signature Stories became the foundation of our entire sales process.
So, I strongly urge you to consider the amazing things your company has done for customers and get those stories in writing. All too often I see companies do great things for customers but they fail to ask for the proof that comes from a simple letter.
Other times, companies get the letters but keep them in a file cabinet collecting dust. It’s crucial for you to get the letters out into the field and integrate them systematically into your sales process.
Building trust is the third vital component to minimizing risk and making it easier for your prospects to say yes. Being an honest person is not enough to succeed in sales. You must also have the skills to deliver results and do the job right.
Earning trust is not random. You can earn it by presenting a confident and consistent sales process. And the more skilled you become at earning it, the more income you will earn. Period.
“Will You Trust Me?”
Everything you ever needed to know about sales and creating financial prosperity is contained within those four simple words. Yet many sales professionals seek to convince, cajole, and connive prospects into becoming customers in a way that resembles conflict rather than harmony.
I found that previous salespeople had not even measured the home for an HVAC system; instead they merely asked the homeowners the square footage. Previous sales people had not even looked at the home, its rooms, attics, basements, and crawl spaces. The fact that I did these things built immediate trust with the homeowners.
After all, you can’t walk into a sales call, hastily offer solutions to problems you have not thoroughly diagnosed, offer your prospect a cheap price, and comfortably ask, “Will you trust me with these recommendations?” It wouldn’t make sense. It wouldn’t feel natural. You would look and sound like a pushy moron. On the other hand, if you go on a sales call and gradually and systematically build a relationship with your homeowner, take the time to identify their problems and the appropriate solutions, and demonstrate your integrity and competence, you will have earned the right to ask that simple question: “Will you trust me with these recommendations?”
While minimizing risk is a crucial strategy in the selling process, it’s far from the only thing salespeople need to know. To download a free sales training package complete with online course, industry research, how-to documents and other powerful resources, visit EGIA.org/CBS-Sales.
Weldon Long is a successful entrepreneur, sales expert, EGIA Contractor University faculty member, and author of the New York Times bestseller, The Power of Consistency: Prosperity Mindset Training for Sales and Business Professionals (Wiley). In 2009, his HVAC company was selected by Inc. Magazine as one of America’s fastest growing privately held companies.