The Third Sales Step You Can't Skip
Calculating an estimated annual savings amount and showing a return-on-investment is the next step. (Click here for the previous articles.)
Most people are interested in the actual dollar savings that a new high-efficiency system will produce. We typically tell them an approximate percentage, in part because that’s easy and in part because we don’t want to be held accountable if they don’t get what we promise.
Be accountable. You can conservatively estimate annual energy savings with my very basic Estimated Energy Savings form or the much-used DOE Cost per Million BTU Calculator. Please remind your customers that both are “estimates” since you can’t predict weather, their usage or utility rates. Don’t be concerned about the dollar amount. Even a conservative estimate of dollars-saved is enough to make your return-on-investment point.
Return-on-investment (ROI) is an appropriate way show the fantastic value of our high-efficiency replacement systems. Consider a 10-year payback vs. a 10% tax-free ROI…which is better? They are the same but the tax-free 10% sounds much more appealing. Sure it’s true that with a savings account you get to keep your principle investment, but your customers are looking at a choice of spending a little or investing more…and getting a nice return on that investment. Let them have that choice.
It’s simple to calculate ROI. Divide the Annual Estimated Savings by the Total Investment. In nearly all cases you’ll have a 5% or better tax-free ROI, something none of us can get today in conventional investments.
Save your ROI story to respond to objections about value. It’s a deadly closing tool.
But it does Get Skipped – Why?
By Mark Sims
We will all agree that calculating the annual savings a client can expect from their new heating and cooling system and relating that in a Tax Free Return on Investment can be a powerful closing tool. This is information many clients need to make an informed investment decision, especially one as large as we are asking them to make.
Too often this step gets skipped. We are given a limited amount of face-to-face time with a client and we are forced to be selective in what we show them. The quicker, and more professionally, we can get this information across the more effective it will be in helping the customer make their buying decision.
TRUST PRO® online is uniquely dedicated to assisting contractors in quickly developing professional, custom designed, client involved Best-Better-Good Choices® proposals at the kitchen table. This leaves you critical time to spend on supporting why they should invest with you.
So imagine if you could create a side-by-side comparison proposal worksheet to use with a client to assist in their making decision of which Choice® is best for them with all the information they need to make the decision including:
• Full features and benefits of the proposed choices
• Your hidden “Iceberg” Items that that help set you apart
• An investment comparison including monthly payments and available rebates
• Estimated Energy Savings including a Tax Free ROI calculation
The incorporation of potential energy savings into the worksheet only takes a few minutes using either the incorporated tables Tom teaches in his seminars or any other energy savings calculator that suits the situation.
The result is a valuable choices comparison that shows the investment vs. potential savings of each Choice® along with their Tax Free ROI. This clearly illustrates how the added savings will help reduce their monthly investment, thus minimizing the net, out-of-pocket monthly investment difference between the choices. Reducing the gap between any two choices typically results in people choosing the higher of the two.
Mark Sims is President of Chameleon Management Solutions, Inc. and is the creator of TRUST PRO® online, the only fully functioning online HVAC contracting business management software.
Financing, Rates, and Payments: Part 2 of 2
By David Piscitelli
Financing – we know we need it. Low rates or low payments…which is the hot button? The answer will always, of course, depend on the client and what they want. That is why we ask and listen during the discovery part of the call. If we don’t ask, we won’t know. Five years ago most consumer financing used the low payment choices, leveraging the home and stretching out the term. Even today there will be clients who want low payments and we need to offer that as a CHOICE.
Now, most consumers, particularly the ones with good credit scores and money to spend, seem to be more and more savvy. They are curious about the “low payment”, wondering what the terms are. They are aware that a low payment is not always a great deal, especially if they are signing up at a higher interest rate and a longer term. There are plenty of people with money to invest in their homes, but in today’s financial environment they appear to be more protective of their financial nest egg. If we can offer “money” – financing – at a reasonable rate, it can often make sense to them to step to invest in our high-end systems. If they want to hold their money for security, but want the system, we have to offer them money at low cost. It has to be smart.
Let’s give a big thanks to the auto industry for leading the way. How many car manufacturers are currently offering 0% for 60? Almost all of them. We may not be able to match these programs, but we can get close. Muscle cars (Mustang, Camero, etc) are up 13% in sales this last year, and not because they are the best place to invest money. People still want fun and comfort, they just need a good deal. Right now that good deal comes in the way of great financing and the low interest rate. Find a low rate plan you can use, and get in the game.
David Piscitelli is a retail sales professional with a highly sales-oriented HVAC and home improvement contractor in the Pacific Northwest. Over 80% of his sales include financing of some form. He can be reached at email@example.com.
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