With high HVAC prices here to stay, addressing customer objections with patience, knowledge, and financing solutions may be the key to closing the sale.
We’ve all seen the news dominating headlines lately: current economic conditions have forced price increases on everything from groceries to gas. The HVAC industry, in particular, has seen manufacturer price increases from 3% to almost 20% since 2020 (mostly due to supply chain issues, rising raw material costs, and inflation). These HVAC price increases unfortunately change hands from manufacturers to service providers, all the way down to their customers.
Despite these price jumps, homeowner demand for HVAC services remains high. While this is encouraging news for contractors, customers might react poorly to a higher-than-expected quote. How your team manages customer sticker shock can make all the difference for your customer experience.
WHY MANAGING CUSTOMER STICKER SHOCK MATTERS
Handling customer objections over HVAC price increases is an important part of building and maintaining customer trust.
For someone with a salaried or non-trade job, a steep quote may initially seem like a rip-off. They don’t have the necessary knowledge to understand how much material cost and labor go into hourly or even flat rate pricing.
While it’s tiring as a contractor to repeatedly explain your pricing, mishandled customer sticker shock can lead to lost business, poor online reviews, and, eventually, a drop in sales.
HOW TO HANDLE CUSTOMER OBJECTIONS OVER HVAC PRICE INCREASES
The good news is, you’re already equipped with enough industry knowledge to skillfully manage customer objections. Throw in creativity, flexibility, and some patience, and you might even increase HVAC sales overall.
Let’s dive into some best practices for responding to customer price objections:
1. APPROACH THE CONVERSATION WITH EMPATHY – BUT DON’T LOWER PRICES
We’re all tired of rising costs. We’re tired of hearing about it on the news, customers are tired of readjusting their budgets, and you’re tired of defending your business’s pricing. However, it’s important to remember that, while you may have had this conversation about HVAC prices countless times, your homeowner may not. Moreover, if this is an emergency repair, the homeowner may be especially unprepared, both mentally and financially. You know your rates are fair, but coming across too defensively could turn customers away.
Of course, being sympathetic to your customers’ feelings does not mean offering a discount. You’ve seen it plenty of times: homeowners may balk and walk away when faced with an unexpected price, but they might also try to negotiate. While accepting a lower price to close a deal is tempting, this can lead to a slippery slope of falling rates. Be patient with shocked homeowners— but make it clear your prices are firm.
2. EDUCATE THE HOMEOWNER ON VALUE
When a product or service is fairly priced, most customer sticker shock comes from a misunderstanding of value. Especially thrifty consumers may choose a cheaper product and become disappointed when the quality is lower than its more expensive counterpart. Customer understanding of HVAC prices is no different.
First, many first-time homeowners drastically underestimate the costs of necessary home repairs – sometimes by several thousand dollars. Second, HVAC repairs aren’t as noticeable as, say, a kitchen remodel, so the cost may seem unfair. Educating the homeowner can help them understand the reasoning behind your rates and the value of your work. Making the effort to get on the same page also demonstrates your value as an honest and trustworthy contractor.
3. PROVIDE THE HOMEOWNER WITH ALTERNATIVE PAYMENT OPTIONS
In the end, it isn’t easy to come up with a larger sum of money than you expected. There will be cases when homeowners simply can’t afford your rates upfront. While staying firm on your prices is important for business, so is landing a job. In this case, the best way to avoid losing customers is to offer them alternative ways to pay.
Particularly in the case of millennials, “buy now, pay later” payment models have exploded in popularity. The option to pay in equal installments over time allows customers the ability to purchase big ticket items they otherwise might not be able to afford. In the case of HVAC expenses, customer financing options could lead to conversion even with the most sticker-shocked homeowner. Working with homeowners to finance their HVAC repairs also improves their customer experience, which may boost business over time.
Providing financing options, like all credit, runs the risk of assuming debt. However, working with a third-party customer financing company shields you from bad debt while ensuring you get paid in full. Some companies, like us at FTL Finance, even offer programs without dealer fees. However, be sure to check with your provider about any potential costs associated with third-party financing.