Everyone in the HVAC industry has a different opinion on the best sales process for a residential HVAC quote. The “good, better, best” sales process may be one of the most popular choices over the past few decades.
It definitely makes sense why so many HVAC contractors use this method, but is it really the best approach?
Adapt your HVAC sales technique to your customers’ unique situation.
Let’s check out some different ways to think about your sales strategy. Spoiler alert: We’ve seen many HVAC contractors use different sales models very successfully in OnCall Air, so you won’t hear us single out any specific model as “the best way to sell!”
Instead, we’d like to explore some different tips that may just help you make that extra sale.
Blame “Good, Better, Best” On Beer
Offering three “good, better, best” options is not just popular in the HVAC industry. In fact, what made this sales method popular was an experiment conducted by an MIT professor at a Boston bar.
When the bar’s customers were offered two options (a basic beer and a better beer), 15% went with the basic beer, while 85% chose the better beer.
Then, when the restaurant added a third premium option, 10% of customers opted to go with the premium beer. Even more impactful is that the percentage of customers that selected the basic beer decreased by 5%.
The experiment resulted in a key observation. The addition of the third premium option did not only drive customers to that top option. It also drove customers away from the bottom option, which in turn raised the bar’s overall net sales!
Many industries have adopted this strategy for their own sales, from grocery stores to software, automobiles,…and, of course, HVAC.
As you think about whether “Good, Better, Best” model is right for your sales, keep the following in mind:
Reasonable Differences
The differences between your three options need to be reasonable. Having massive differences in price or quality between your options won’t give the results you might be looking for.
Be Flexible
Your basic option doesn’t always have to be the cheapest unit your company sells. For example, your basic option for one customer might be a 14 SEER system, while for another customer it might be a 16 SEER system. It all depends on discovering and understanding what each customer’s needs are!
Test Out Different Options!
As we mentioned, we’ve seen contractors try different techniques in OnCall Air, whether it’s 2, 3, or even 4 options. Each method may give different results, depending on your objectives and the customer’s needs.
The Decoy Option
Let’s take a closer look at what a 4-option strategy could look like.
Introducing a 4th option to your sales proposal isn’t always done with the intention of selling that 4th option. Instead, the 4th more “extreme” option may be implemented to shift your customers’ preferences further away from your basic option.
We’ll use an OnCall Air proposal to illustrate how this could work on an HVAC quote.
Let’s assume that 10% of your customers typically select the 18 SEER, 60% go with the 16 SEER, and 30% end up with the 14 SEER.
Now, let’s see what happens when a higher priced “decoy”, a fantastic option, is added to the quote:
Based on the buying behavior that we saw earlier in the MIT professor’s beer experiment, you can expect that a small percentage of your customers, maybe 3%, might actually select that Fantastic option.
But what is even more impactful is that now the Fantastic option is pulling your customers’ buying behavior even further to the left end of your choices, which means that even more customers are choosing the Best and Better option instead of just the basic Good option!
As you can imagine, this sales strategy can have a profound impact on your sales when used correctly!
To learn more about the sales psychology and science behind offering multiple options, we recommend reading the book “Priceless: The Myth of Fair Value.”
The Paradox of Choice
Hold on. So, if offering 4 choices is better than 3, then why not offer 5, 6, 7, or even 100 choices?
Well of course, there is a limit to this method. While offering more options pulls your customers further away from your bottom option, this also needs to be balanced with not offering too many options. Too many options can overwhelm your customers, which can lead them to not select anything on your quote. Ben Schwarz, author of the book “The Paradox of Choice” breaks this concept down in this TED talk.
Deciding which HVAC system to buy is not a simple decision for a homeowner! It’s easy to understand how too many choices can be overwhelming.
So, how many options should you offer?
On average, when analyzing more than 200,000 OnCall Air proposals, we have found that the average number of options presented was 2.1. So, while many contractors aren’t offering as many as 4 options on every quote, and most are definitely offering more than 1 option.
The answer to how many options you should offer on your quotes is this: it depends.
It depends on your product lines. It depends on your team. Most importantly, it depends on the customer. Understanding the the psychology and the science behind these sales techniques and, of course, testing these techniques with your customers will help you arrive at the best amount of choices for your sales quotes.
Regardless of how many choices you offer, here are a few extra tips that can make an impact on your sales performance:
RECOMMENDATIONS AS CHOICES
Instead of thinking about the choices you offer as “side-by-side”, some systems, including OnCall Air, also allow for the ability to offer additional products or services as upgrades or add-on choices that your customer can select once they have chosen an option. This is a very popular technique among OnCall Air contractors that has helped many to improve their average ticket value:
FINANCING BEFORE PRICE
A general rule of thumb in sales is to discover your customer’s needs and present the value of your products and services before discussing pricing.
However, one other powerful item to discuss before diving into the total price of the system is financing. Showing monthly financed prices to your customer can help ease the mind of a customer that may be worrisome of the total cost of an HVAC system and keep them focused on ethe features and benefits of each system that you’ve presented, making the comparisons between them less extreme.
PERSONALIZATION
Personalizing each option for your customer is another powerful tactic. Instead of labeling your options as the generic “good, better, best”, get creative with fun custom labels.
Check out the image below to see how monthly financing estimates and custom proposal labels can change your customers’ shopping experience on your quotes:
Lastly, it’s important to include items that emphasize what makes your company and your service unique on your quotes. Click here to learn more about how showcasing your brand on your quotes can increase your sales success.
In the end, people buy from people they trust, and you don’t need any sales experiment to tell you that!
