matching the customers lower budget with a lower grade product

[huggytree]

I have a new HVAC guy in my networking group...he says he has a 80% sell rate and its because he matches a furnace to the customers budget.

for the most part that doesnt work with plumbing except for water heaters...i am considering a lower priced option. I get alot of price shoppers for water heaters. Right now i sell a higher end water heater which i know is good. I try to discuss quality during the 2 minutes i can keep them on the phone...it does work sometimes, but many times it doesnt.....by giving them 2 prices and having 2 levels of product i may be able to double my waterheater sales. If the new heater only lasts 5-8 years instead of 12 how will this effect me? im not going to sticker the heater. Its a customer i would have never had anyways. they will have gotten what they paid for. will they bad mouth my company when it goes bad early? will most of them even remember me for a 2 hour job i did many years before?....

im just considering that im pushing my version of quality on people and losing customers....if they cant afford what i have to sell maybe i should have an option that they can afford.

here's a good comparison: i own a Toyota dealership, but have extra room on my lot...do i also sell KIA's?...not everyone can afford Toyota, but could afford KIA....its not a good...it will have more problems....but it is what it is.

offering 2 water heater lines will also keep them on the phone longer and while comparing the 2 it will give me more time to discuss quality/service and may result in more sells for my standard line of water heaters. its my way of expanding what i do or in this case sell.

opinions?

[Steve B]

I would offer both and put your stickers on both. If they choose a lower price option, it should be understood it may not last as long - especially if you explain it.

Don't you want to get the replacement business in 8 years also? The Kia people still have their logo on the car. You just install the system, you don't manufacture them. Give them the best advice and let them choose.

[thx4yrtym]

I agree with Steve.

Sold HVAC for 2 1/2 years . Never quoted less than 3 systems. good, better and best.
Different features, efficiencies,warranties and prices. Their choice. I never tried to sell one over the other, all were quoted such that we maintained our margins.

You could do this on water heaters and on other larger items.

If quoting three systems each time seems like a lot of work, it wasn't because I created software that ran on a spreadsheet or on a handheld computer so it was automatic. I just picked the size and added options and accessories.

When people call for a water heater I would guess that they have a problem.
Why would someone buy the best water heater if they only intend to be in the house another 5 years? Why would they buy the best if it's for a rental?

The HVAC guy you mentioned is helping the customer buy a solution to a problem. You're trying to sell the customer something you think he should have. I have no doubt that he closes 80%. He's providing a solution to their problem, rather than trying to sell them anything.


Best of luck,

[huggytree]

just priced the junkier water heater and its actually more expensive than the good one.

maybe i should have done that first before i posted...

thanks for the advice though...it gives me something to think about in the future. Ive always just pushed for the same model of everything that i would install in my own home...something i stand behind...i dont like poor grade products....maybe i shouldnt judge what others want to use

[Aaron Hats]

I do it every day. A customer can buy a wool felt fedora for $50 or a fur felt fedora for $150. Not everyone has the same quality philosophy. Give them what they want...within reason.

[rezzy]

I think its best to offer your customers several lines. Give them the information and allow them to decide on their needs.

Dont be partial to particular product or try to sell towards something, that can come off as pushy and some customers may get turned off.

[Business Attorney]

I agree with the others. There are many reasons why someone might pick another product over the one you recommend. Give them a choice, and I think you will find yourself closing a higher percentage of sales.

[KristineS]

Definitely offer choices, and then explain the difference. It's up to the customer what they want to spend and how much risk they want to take if they buy a less than quality model.

Your job is to offer choices and explain the ramifications of those choices. It's the customer's job to make the choice. Why limit your potential sales?

[cocoy]

I would sell both.

Most people don't buy a new WH just because they want to. It's because they have to. If it's unplanned spending I'd say most people will seek a cheaper option these days. You really have to look at your customer. You're not selling unnecessary luxury items here.

There's nothing wrong will selling a WH in a lower price range. Give them the different quotes and show them the difference between the two WHs. Why is one better than the other. Mention that this better one is what I put in my own home, more energy efficient and would recommend, etc...

You'll be educating the customer and when they do get another quote from the other guy the customer will ask them what type of WH they will be installing and compare it to your quote.

[Dan Furman]

I love the idea of "choice". Because then it turns "yes or no" into "well, which one?"

I wish I could do something like this... but how do I tell someone they are only getting my "good" work, and not my best? :) It's all my best.

hmmmm... maybe offer a "no frills" service. You give me the research, no revisions, no phone conferences, no real input from me on content, longer timeframe - I just take your info and write...

I think this has merit. It's at least worth exploring.

[cocoy]

hmmmm... maybe offer a "no frills" service. You give me the research, no revisions, no phone conferences, no real input from me on content, longer timeframe - I just take your info and write...

--------

I do something similar. When I do floor plans for a client. They have the option of doing the measurements themselves and providing a rough sketch or I personally go to the site and measure myself before putting the plan in CAD.

I tell them if I do all the work chances are it'll be quicker and more complete since I got all the information firsthand and note down details that they might not notice or bother looking for. They get a more detailed and complete plan if I've seen the property myself.

Obviously option 1 is much cheaper monetary wise to the client. but then they also have to realize how much time they will spend measuring themselves when I can do all the work from the getgo.

[thx4yrtym]

Dan,

One of the problems is - will the quality of your work suffer from the no-frills approach. Different levels of customer involvement create a different set of issues I would think.

I would imagine that in your line of work you deal with the fact that people generally don't want to spend much time thinking outside their comfort zone. It's human nature I guess.

If you are working with a larger company and they have internal resources that can handle part of the load and then let you run with it , maybe offering a lower price for the situations where the customer is really organized and have a real good idea what they want would work. Obviously under these circumstances you should have to devote less hours to the project.

Just thinking out load.

Best of luck,

[Dan Furman]

Dan,

One of the problems is - will the quality of your work suffer from the no-frills approach. Different levels of customer involvement create a different set of issues I would think.

Yea, this is the problem. Plus, I'd have a hard time going forward if I knew the client didn't do good research, etc - I really "cant" give less than 100%.

However, I CAN be comfortable with "no edits", and a longer timeframe. For example, in exchange for a month's time for me to do it (so scheduling is easy), and no edits, I'll give 33% off. Obviously, I'd want a prepay, too.

But that could work provided I offered it to people who already said "no" due to price. I might kick this around - only sending it to people who said "no" means, essentially, I have nothing to lose.

[SteveC]

As many have said, offer both and simply sell it on the phone as "do you want a water heater that will last you 8 years and cost this... or do you want one that will last you twelve years and cost. ... " if you let the customer tell you what they want, and you actually listen you will close more sales... have happy customers and well, be more successful.

[phanio]

Try it - see what happens - just disclose that there is a quality difference with the price.

[orion_joel]

Huggy, i think that this is the most common sales area. Where you have to have multiple choice, and move the customer up.

If you offer one expensive option you will loose sales, as i am sure you already know. However if you have two or three water heater options, you can take advantage of keeping them on the phone. to mention both.

Say for example you have two heaters priced at $400 and $600 (just rough figures) you offer the lower priced one first should last 5 to 8 years, will do the job it needs to do. Then offer the higher priced one but offer it as for an extra $200 you can get a better quality water heater, that will last 4-7 years longer. Most people will mentally add $400 and $200 to get $600 but i think you will actually increase sales on the more expensive option. However at the same time i would not push to hard to force them to change their mind to the more expensive if they do go with the cheaper option, as you may just lose them all together.