• Paper Towel Close Learn Tec Daddys Signature Move

    Feb. 1, 2008
    Before you even worry about what to say when the customer tells you your price is too high, you need a way to present the price to the customer a way
    Before you even worry about what to say when the customer tells you your price is too high, you need a way to present the price to the customer — a way that makes the service agreement mandatory, shows the savings through add-ons, makes the decision easy, and gets you a big “thank you” instead of an argument. I don't bring the price book in when first meeting the customer. After I've completed my inspection, I usually go out to the truck to figure my prices and write everything up. While I realize that the people who sell flat-rate price books say it's better for customers to see that the prices come out of a book and are not "made up," I find that watching me flip through a lot of pages, doing a lot of writing, and hitting a lot of buttons on a calculator makes my customers nervous, so I make every attempt to do it out of their sight. The customer will see the book later when I present the price, but I also don't use the price sheets in the price book as a visual aid unless the customer really wants to see them (which, for me, has occurred one time in 20 years). Using the price manual to quote prices causes me to have to flip through a lot of pages and, if my recommendations involve more than one task (which they certainly will), people will need an impossibly good memory and math skills to be able to follow along. Even I lose my place. Additionally, that technique doesn't allow me to quote a total bottom-line price for the complete job in an easy-to-comprehend format. The Paper Towel Close I don't quote the prices on the company's beautifully designed, pre-printed work order because it's distracting, confusing, and intimidating. I take a simple, easy to read, and less sophisticated approach to presenting the price. I write out everything that needs to be done, item-by-item, on a plain sheet of paper, as illustrated in example No. 1. No company logo, no nothing. I show the customer both the standard rate and the service agreement rate for each task side-by-side. I also show the standard rates for cleaning both the furnace and the air conditioner, when appropriate. Finally I show the customer the price of the maintenance agreement added in to the maintenance agreement price column. If your company has a service agreement program that provides service agreement customers with discount pricing, one way to get additional agreements is to allow technicians to apply the discount pricing to that day's service call if the customer wants to sign up for the agreement on the spot. Getting the Add-ons If there's a discounted rate for additional tasks — and there should be — put the higher, primary rate for that task in parentheses next to the item's description. Put the lower rates for that same task in your two columns. That shows the customer they're saving money by spending additional money today. This helps me to get a higher average service invoice and use my time efficiently by doing more tasks per call than before. That means less driving time, less selling time, less set-up time, less clean-up time, and less time filling out paperwork than I would have by making multiple trips. The more I do for my customers, the happier they tend to be because they receive more benefits from my visit than they would if I did only one small task. When you show a visual representation of the discounts of the additional or secondary tasks, you can often show that the total amount of the customer’s discounts will be equal to or greater than the amount of one of the tasks they were only marginally interested in. That makes the task essentially free, so they often decide to go with everything. All the savings I'm giving the customer tends to make them appreciative of my going to the extra effort to write things up this way and, instead of begrudging me for all the money I'm taking from the customer, they end up thanking me. Incorporating the Service Agreement When you put the standard prices in one column and the service agreement prices in the other column, you'll find that it's impossible for the total amount at the bottom of the service agreement column to be a higher number than that of the standard rate column. This technique proves to the customer that they're not paying extra for a maintenance agreement; they're actually saving money by purchasing one, and ensures a maintenance agreement sale. Only a few dozen service calls, out of my entire career in service, have ever declined the service agreement. An essential component of any sale is establishing the need. Being able to show a savings by buying now is also key, as it establishes a sense of urgency. The cases in which the service agreement was declined were when the equipment either didn’t require cleaning, or the customer didn’t want it cleaned, and they only wanted or needed one task. I couldn't show any savings or build value in cleaning equipment that was already clean. Some of those customers purchased service agreements at a later date when maintenance was required. Don't present the cleaning as optional. It's not an option. Dirty equipment causes failures, shortens the equipment life, decreases comfort, increases operating costs and wastes the earth's natural resources. When you adopt the policy of "I don't work on dirty equipment," and make cleaning the equipment one of your own personal principles and a standard part of every service call, you'll find you'll get the agreement on every call as well. If we're going to worry about following the letter of the law, technically, if your company has service agreements, and you offer it to any of your customers, you're legally required to offer the same discount plan to everyone. Using Subtotals Using little subtotals at logical points as you proceed down the paper towel close helps to make the decision easier. Put the repairs that absolutely must be done just to get the equipment running and cleaning the part of the system you were called out to work on, and the service agreement, in the first subtotal. Make cleaning the other half of the system part of the second subtotal. Next to the cleaning of the second part of the system, I put a dash, then write "when done," because I'm not going to do it now. I'm just putting it there for the customer's information and to give them a look at the bigger picture. After these two subtotals, list everything you're certain will break down and cause unnecessary expense and inconvenience over the next year or two and total it out again. This gives them a very clear idea of their cost of ownership over the next few years. They may have a heart attack when they see their total cost of ownership, excluding operating expenses and depreciation, but they also tend to appreciate being educated on what to expect in the near future. I'm probably the only HVAC professional they've met who's done this for them. It also prevents us from getting into trouble with the customer who opts for the minimum when it breaks down again. They can't say they weren't warned! The Finer Points Skip a line between each repair to make it easier to read. Put two or three bullet points under each task, space permitting. Bullet points build value. Don't use dollar signs unless you're showing the savings; they make the numbers look bigger. I'll also mention that I prefer to use whole dollars. There's a strategy behind your prices including cents, but cents make the numbers larger and unnecessarily complicate the math. This format is called "Charlie Greer's Paper Towel Close," and it's my signature move. It has improved the sales of countless technicians across the country. Just about all the top selling techs I know use this technique. Repair vs. Replace: When I feel they'll benefit by replacing their equipment, I also show the price for the replacement equipment under all the repair prices along with a brief description of the equipment, as illustrated in example No. 2. When it truly does make sense for the customer to replace rather than repair, the figures speak for themselves. Sometimes after totaling up all the repairs, I'll write "Add to replace," and in the pricing column for the replacement equipment, I'll just show the difference between the repairs and the replacement. The bottom line for replacing the customer’s equipment will still be the same as it would be if I'd written it up separately. As an example, this shows people how, if they've got to spend $1,500 to get their equipment in good running order, and new equipment is $5,000, in a manner of speaking they're really only spending $3,500 for new equipment. That $3,500 will show a return on investment, whereas that $1,500 is just money down the drain. Once I've got the okay to proceed with the work, I then write it out on the formal work order and get their written authorization. I also make a note on the work order of any recommendations I made that were declined. Waiting until after the job is sold and at least partially completed to fill out the invoice also helps me to have neater paperwork, which is important. So far, we've covered the paperwork aspects of presenting the price when running service calls. In my next article, I'll cover preparing to the present the price, and in the article following that, I'll cover what to say when you present the price. Charlie Greer is a HVAC service technician, an award-winning HVAC salesman, and the creator "Tec Daddy's Service Technician Survival School on DVD," and "Slacker's Guide to HVAC Sales on Audio CD." He's also the instructor of "Charlie Greer's Four-Day Sales Survival School," held every spring and fall in Ft. Myers, FL. For additional information on Charlie's products, seminars, and speaking schedule, or to request a catalog, visit www.hvacprofitboosters.com or call 800/963-HVAC (4822). E-mail Charlie at [email protected].