What do you do when the competition suddenly starts undercutting your prices? It’s often difficult to gauge just what the impact is on your company’s customer base but getting out ahead of the possible ramifications is a smart, strategic move that can improve both your HVAC business and its bottom line.
These 5 strategies will help you deal with a price war in a way that “winning” doesn’t translate into cutting services, reducing product quality, or lowering your prices to where profits and income suffer.
Don’t Engage in the Battle
Every HVAC business has competition and where there’s competition, there are price wars. You may be tempted to quickly match the other guy’s reduced prices, but there is another way. Don’t engage in a price war at all! First, it can quickly drain your cash reserves and force you to turn to lenders. And unless your competitors have access to cheap funding sources, it will eventually do the same to them. Instead, combat those lower prices with strategic maneuvers.
Emphasize Features and Benefits
Price matters to everyone, but what people want are results that live up to what they spend for them. It’s a distinction that matters and one that can best be explained by the old saying, “you get what you pay for.” When you show customers where and how your HVAC business provides value, you’re giving them the realization that cheaper is not always better. Regular follow-ups, checking in every so often, and offering something valuable to reward customer loyalty all make slightly higher prices worth it.
Get Comfortable with Hearing “No”
There are a lot of HVAC companies out there and you’re bound to hear more than your fair share of no’s from potential customers. Try to remember that not all people buy on price; you will find the ones who understand value and are willing to pay for it. And don’t let the fear of no keep you from suggesting higher-end equipment because you think the customer can’t afford it or won’t pay for it. You can always negotiate down, but it’s not always easy to do the opposite.
Educate Your Customers
You’re the HVAC specialist, so it’s your job to educate the customer. You can do this by showing them what they have, what you’re recommending to fix their problem, and why you think it’s their best solution. Emphasize points that emotionally connect with people such as air quality, being comfortable, and remote operation. All these features are of value to most people and they’ll long remember that you made them feel cared about on a personal level.
Improve Customer Relationships
A better customer experience almost always springs from a more convenient one. And people typically don’t mind paying more for something that is convenient and/or meaningful to them. Pre and post-sale customer service matter equally and one of the best ways to make sure you’re delivering is to look at what the competition offers and then going the extra mile. Do they offer 24/7 support? Do they keep customers informed of current rebates and special offers? Do they have a strong marketing strategy? Whatever they lack, make sure you have it in abundance.
You may have noticed a common thread running through these low price war strategies: they’re all about keeping your customers happy, something no one can put a price tag on. While the HVAC business is a fiercely competitive one, a positive customer experience coupled with high-quality, reliable products can be hugely helpful in combating the competition’s attempts to undercut you, allowing you to capture the customer and “win” the war.