Do Homeowners Want the Lowest Price?

Sales Byte®

Do Homeowners Want the Lowest Price?

Your price gets challenged a lot. It seems like it’s gotten worse in the past few years. We can blame it on the economy. We can blame it on the internet. We can blame it on low-balling competition. Perhaps we should just blame ourselves.

Our “bid” driven industry sets itself up to talk about price. We show customers numbers…numbers on equipment, numbers on accessories…prices are strewn about in bids, estimates and quotes. No wonder the confused homeowner challenges the price. It’s all we give them to talk about.

When people spend their money it’s to get something they need and/or want. The measure of what they get for their money is called value. When the value to the buyer exceeds the price, people will pay the money to get it. The sales professional’s job is to find out what the customer wants and show them the total value of what they get from them, from their company and from the solution they are proposing.

So what about price? Show a consumer a single price and they have nothing to relate it to. In their mind it must be high. Show the consumer several prices and the consumer has something to compare. When showing three prices, the highest suggests “top of the line value” while the lowest seems “cheap”. Most people will avoid the “cheapest” and at least choose the middle, the “safe” choice. Both the middle and the top choices will seem to have more value than the lowest price.

Show one price and be prepared to defend it. Show three prices and let them choose one. It’s simple. It works.

Knowing your Closing Rate by Source of Lead for the Ultimate Refinement

Your company’s and each retail sales persons Closing Rate are critical pieces of information. It helps you determine how effective your overall sales strategy and tactics are working vs. your competition at the simplest level. Comparing individual results helps you manage and value retail sales people. Tracking Closing Rate requires that you have:

A system that records each and every lead by sales person
A company policy for lead follow-through and closing. There are several different views on closing a sales lead, but because close rate is just a yard stick, the critical thing is to have a consistently applied policy be it that you keep them open until they buy or require leads be closed after X days.

There are several additional refinements that you should also measure beyond this basic level of Closing Rate that will assist you in managing your sales and marketing resources.

Measure Closing Rate by Time Period – Ideally your lead tracking system should be able to quickly generate results by time period. Knowing how your closing rate for the entire company and by retail sales person changes over time is critical to measuring the effects based changes in sales and marketing strategies or general expected growth of a new sales person.

The ultimate refinement is being able to measure your Close Rate by Source of Lead. This requires that your lead tracking system requires that a lead source be posted for each and every lead. This level of detail is an eye opener. From this level of detailed information you can glean all sorts of conclusions about your sales and marketing strategies, marketing investments and your sales people. These include:

Where are your leads coming from, but more importantly where are your sold jobs coming from?
What is your historic chance of selling a job by lead source?
What lead source generates your highest value per job?

From this you can effectively evaluate your sales and marketing strategies and lead generations investments and fine tune them to generate the highest percentage of optimized opportunities, not just numbers of leads.

Add to this the ability to look at Close Rate by Source of Lead by Sales Person and you can now further refine your assignment of leads by close rate based on source of the lead. I have found that certain sales people handled leads from certain sources more successfully than other sales people. This level of detail allowed us to smartly assign leads based on source of the lead. We were also able to learn from sales people about their higher rate of success with certain lead source so that the entire organization could grow in success rates. This ability to selectively assign leads based on lead source was especially critical during slow times of the year were leads were not plentiful and each success was more critical.

These and many more sales closing rate and lead source tracking features are seamlessly built into TRUST PRO® online. For more information and a free demo of how to use TRUST PRO® online on a tablet in the home log onto www.trustproonline.com.

Mark Sims is President of Chameleon Management Solutions, Inc. and is the creator of TRUST PRO® online, the only fully functional cloud based HVAC contracting business management software.