Think Big. Big Value. Big Sales. (And Big Savings.)

Posted by:

Share Button

tiny house‘I can’t sell that attic insulation package at $3.50 per square foot. No one will by it.’

This is just one example of contractors coming to home performance from within a single trade missing the opportunity to do more and to do better. Do better for her customer. Do better for her business.

Customers don’t buy a price. They buy something (of value) at a price. If you create sufficient value for the customer—and they have the financial means—you’ll continually be amazed at how far some customers are willing to go. You might be used to selling $4,000 projects and find that your average ticket doubles to $8,000. Or $12,000. Or more.

If you want your average project to be $12,000, you have to accept a couple of things. One is that some projects will be quite a bit smaller. If you push customers hard or hit everyone with a $20,000 proposal, you too frequently won’t get a sale at all (see Home Performance Whale Hunting). Some sales will be at $3,000. But that’s fine if I get to win a customer that I can visit again and again and again.

The flip side is that also means you need bigger projects, too. $20,000. $30,000. $60,000? Yes!  I assure you that you won’t sell many projects that large is you don’t offer projects that large. If you do, you will.

But there is a catch. You have to build value. Few customers understand the importance of air-sealing, duct-sealing, high-efficiency equipment, HRVs or any of the widgets or “measures” that we sell. Few customers come looking for these things.  You have to build the value for them.

You do this in a few ways. First, you do need to figure out what’s going on physically with the house. Here is where the diagnostics and your experience helps. Unfortunately, too many in the home performance world—or through residential contracting—think knowing how to find the physical answer is enough. It’s only the beginning.

You’ve also could to find out what each homeowner cares about. You do this by asking questions and LISTENING to the answer. And sometimes you need to help the homeowner understand what they care about. Get this. You also do that by asking questions! The more someone understands their own problems, the more interested they are in find solutions to those problems. (See this post on who talks more in effective sales calls.) You job is connecting the solutions to the problems and other concerns that people care about. You learn what people care about when you ask good questions and they tell you.

Then you present packages that reflect the value you’ve helped build and the readiness of the custom to tackle the project that you’ve gauged over the course of your interaction.

Here’s a secret: You can build value way beyond whatever the initial call was for, especially if the call was for a widget. Respond to the widget call. But find the underlying problem(s), build the value, and present the solution. More often than not, the widget call should turn into a solution sale.

What this is NOT. This is not simply creating a laundry list of everything that need to be done in the house along with several options for tackling each item on the list.  I’ve seen 50-60 page audit reports that do just that. Audit reports that long are a recipe for confusion and inaction (not to mention unnecessary delay and expense!).

I’m ok with the laundry list as supporting information (especially since I hope to come back again and again and over time do $80,000 of work for the customer). But you have to distill it down based on the value you’ve created and present projects that the homeowner cares about. Some might just want the furnace fixed because it isn’t working right now. Some might want whatever is needed to make their daughter’s bedroom safe and comfortable. Some might want you to help them win the Green Badge of Courage even if it isn’t cost effective. But they almost all want you to tell them what is going to deliver what they care about, with focused and concrete recommendations and proposals.

If you present projects large or small based on your technical findings alone, you can probably close 25% of the time. But you’ll be missing a lot of opportunity not closer more projects, and bigger projects. Create big value. And if the homeowner is ready, present big projects, the biggest projects that customer will buy, whether it’s $3,000 or $60,000.

Share Button
4

About the Author:

Mike Rogers is the President of OmStout Consulting. A nationally recognized expert in residential energy-efficiency, he works with contractors and programs to scale sustainable market approaches to improving homes. More on Google+

Comments

  1. Nate Adams  August 27, 2013

    Mike, I’m working on just this right now. I haven’t always presented everything, and I haven’t presented HVAC at all. I should have the process up and running in the next few weeks, we’ll see what happens. I do want some whales. So far my biggest projects were both $15K, one at one time, the other over 2 years. I know I can do more. Now, if only I could finance that easily…

    reply
    • Mike Rogers  August 27, 2013

      Nate, from previous conversations, I know you’re moving in the right direction. I’ll mention one resource again, SPIN Selling by Neil Rackham.

      On the HVAC front, adding HVAC to the sales mix give you another tool–and sometimes the right tool.

      When you’re ready, the even bigger opportunity with HVAC rests with the easier time you should have with establishing a customer for life. Existing customers should be the foundation of your business, and having HVAC service in-house gives you an excellent opportunity to go back again and again, remind customers about the value you can deliver, and also be at the top of their mind–hopefully as a trusted resource who has done everything you promised and more–when they’re ready to act.

      Thanks for keeping my abreast of what you’re doing. Good luck!

      reply
      • Nate Adams  August 28, 2013

        I just ordered it! It should fit my style well, I’m naturally consultative. I don’t ‘close’ except occasionally when I can tell they are looking for me to ask for the sale. I still run 50-60% close ratios, though. So I’m curious how this can help me polish. Thanks again for the suggestion! We do have a really tough thing to sell – something the price of a car that they can’t see, and never knew they needed. It takes a process to pull that off.

        reply
        • Mike Rogers  August 28, 2013

          Great, Nate! As a sales management side note, I often see the entrepreneurial owner close in your range, only to have the business screech to a halt one she or he starts adding sales people and they close at 25%. As you think about growing, you want to establish systems so that other people can do what you do (so that you don’t have to do it!). I think SPIN Selling might help you formalize what you do well and allow you to build your process and training around it so that your growing team can do as well as you do.

          reply

Add a Comment