Selling HVAC Without Federal Tax Credits

Sept. 1, 2011
A friend told me about taking his 8- and 10 -year-old daughters fishing for their first time on a stocked lake where they caught fish after fish until

A friend told me about taking his 8- and 10 -year-old daughters fishing for their first time on a stocked lake where they caught fish after fish until they couldn't hold their rods any longer. They had a fantastic time, he said. Once in a lifetime, I replied. Sure, it was fun to hear about the fabulous experience, and I was happy for my friend's time with his daughters, but I couldn't help thinking that it was a bad way to start since now they will expect that every time. We have taught them that fish will bite within seconds and they can catch more than they can count.

I've often mentioned how our business's dependence on the weather and the success that hot and humid summers and cold winters brings to us is not such a good thing. While it's nice to have the sales come knocking on our door, it trains us to wait for a knock. When the knocks don't come, we don't know what to do. Except complain.

The recent federal tax credit program did the same thing to our industry. When the program ended, our industry seemed unable to sell high-efficiency products. For those of you living in the United States, you may not know that Canada had a similar program and a similar business turndown after their program ended.

In my travels and conversations with contractors all over the continent, I found some who seem unaffected by all of this. What they were doing will not surprise you. Here's what wholesalers might coach their contractors to consider and, better yet, help them implement.

Some decided they would not participate

There are time-worn adages that tell us that the results we will get (in life) depend largely on what we expect. If we expect that people won't buy high-efficiency products, then they will behave in a way that fulfills that expectation. At the kitchen table, this translates to us backing off at the first sign of resistance to high-end systems, or worse, not even showing them at all.

Some looked for new opportunities

I recently conducted a series of sales training workshops for a distributor client who wanted to help their dealers be more comfortable and confident in selling ductless, mini-split products. As always, I learned a lot from the participants, and it seems that the ductless market is growing even without the federal tax credits and even in our declining economy. Ductless products offer many benefits and have many applications that the “ducted” mind-set most of us have simply doesn't let us think about. In some situations, a combination of ducted and ductless provides a terrific solution to a long-standing problem, and offering it makes you different from all of your competition.

Some looked outside our industry for ideas

What are the car dealers, furniture stores, orthodontists and other high-end retail businesses doing to make it easy for their customers to buy their products? They have been emphasizing alternative financing programs. Financing companies want to sell their products too, so they've created new programs to make it easier for your customers to get what they want. For example, GE Money, who works with several equipment manufacturers, has a 1.25 percent payment factor program that translates to $1.25 per $100. Using this, you can offer a $10,000 system for $125 a month … and the utility savings will often pay for half or more of that.

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Some have taken control of their sales process

The old saying, “In order to change the pain of staying, the same has to exceed the pain of change,” fits this example. My guess is that less than half of all contractors have any management checkpoints on what the salesperson does with a lead and most contractors don't track the leads at all. There must be a defined expectation for the sales process and certain tools that you must use on every call. The only way for an owner or manager to know the process is being followed and the tools are being consistently used is to measure them in some way — either by having them turned in or automatically reported by software.

Some now follow up until they “buy or die”

I'm working with a local contractor, and last night we discussed what happened to the “old bids” that were made and not sold. To answer my question, he took me upstairs to a storage area and there, in a nice row, were file boxes full of bids-not-sold. No one had ever called to find out. It's fair to say that your overall close rate will double from your first-call close rate just by calling or emailing until they buy from you … or someone else.

Some have made themselves different by offering higher prices

Higher priced? Am I crazy? Nope. This has always been a good tactic, but the easy tax credit sale made us forget what has worked in the past. Most people want information about what's available, and very often we “block” some of that information because we're afraid of being seen as “higher priced.” That's all in our heads, not our customers'. Frankly, I don't see how it's fair to our customers to not let them have all of the information they might need to make the right decision for themselves and their families. Today, we can offer geothermal, ducted inverted systems, ductless mini-splits, high AFUE/SEER/HSPF conventional equipment and a host of enhancements that will solve a myriad of problems. How about offering a $30,000, a $18,000 and a $12,000 CHOICES proposal instead of trying to “match the low bid?”

Recommended Coaching for Your Contractors:

  • Use software or pre-printed proposal worksheets and require all sales consultants to show high-end choices in every call.

  • Offer information about all possible solutions, not limiting the discussion to like-for-like product replacement.

  • Learn from other successful retail companies. If Low Monthly Payments are being advertised, it's for a good reason. No matter what, always include financing choices on every proposal.

  • It's crazy to spend hundreds of dollars for a lead and not track it until it's sold. Use software or even a simple spreadsheet to keep 100 percent accurate records, and hold the sales consultant responsible to follow up and keep it up-to-date.

  • Never judge what the customer will or won't want and what they can or can't afford. Offer the top of the line with confidence and honor the customer's ability to make the right decision for themselves and their families.

Good Selling!

Tom Piscitelli has 35 years HVAC experience as a manufacturer, wholesaler and contractor trainer and consultant. Contact him through his