Rethinking the residential contractor sales model: The “Valve Stem” sales strategy

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Corey Philip of HomeProSuccess suggests a timing adjustment about when to present the price/offer when you are conducting a residential sales call can bring about big differences in the closing rate and relationship quality.

He calls it the “valve stem strategy” and the concept is quite simple. Instead of presenting your price/proposal at the end of the call, you drop it in the middle (with a specific, odd number such as $5,328), and then quickly move to telling you story/background about the business and successful similar projects/jobs.

Then, presumably after the client trust has increased and resistance has softened (in a process that could take 30 minutes from the time you reveal your price), you conclude with an assumptive¬†close: “Should we get this written up?”

Philip asserts that this approach reduces the need/risk for high pressure tactics and sales closing tricks — or (much worse), getting stuck at the end with the “I’ll think it over” answer, losing the client for good.

I’m sure it is an effective technique and (I think he’ll agree) ANY thoughtful sales technique and knowledge is better than none when it comes to selling residential services, or for that matter, anything to anyone.

But it may not be the magic bullet, which in fact I think Philip revealed at the beginning of his video, with the key opening question: “Do you know anyone that we’ve done work for before.”

That is the key element here, in my opinion. If your inbound call comes from a direct or indirect referral, then the potential client is naturally predisposed to want to work with you. Then following Corey’s script will help the process, but you are clearly not fighting an uphill battle.

If there is no previous relationship, then you need to work a whole lot harder to build the trust, and any sales techniques can backfire, badly.

I recall personally my most recent encounter with an in-home contractor service representative. We had (perhaps unwisely) locked into a furnace rental plan some 10 years ago and, on checking, I discovered we could buy out the contract. The price the service provider wanted for the well-used furnace was, to say the least, higher than I thought anyone should need to pay (after all, what is a used furnace that has to be dismantled and removed from a home actually worth). I used some simple negotiating techniques and won a $500 reduction in the buy-out price, bringing it to $1,900.

But, I thought — what if we bought new — and could possibly get an upgraded, energy-efficient furnace that would reduce our ongoing costs? Cash is not an issue now; the goal is reliability and long-term savings.

I called three contractors, and truthfully explained the rental buy-out situation. Only one returned the call, initially at an utterly inconvenient time. However, the sales rep followed up (good for him) and we set an appointment.

He followed some good sales techniques, providing details and giving alternative recommendations as he presented a warm story about his company, suggesting significant savings and a cost for the new furnace only a few thousand dollars greater than the buy-out. He almost had me sold (and it is my contract to sign, as in the division of family budget/responsibilities, I pay 100 per cent of the costs here (my wife covers some other household expenses).

Then my wife walked in. And she asked about the UV air filter. It seems that the sales rep had conveniently ignored this filter is part of the high-end furnace system we had purchased and would go with the buyout. He had conveniently forgotten to include a comparable filter/setup in his quote. I asked him the cost of this added item. The price went up $1,000.

That in itself would not have been a deal breaker, but the failure to initially make an apples-to-apples comparison in making his quote/recommendation blew the trust. I decided to just pay the original contractor the buy-out fee and enter into a much reduced service contract with the same company.

Trust is a challenging thing in sales and business development. It is hard to win and easy to lose. Great marketing (branding) can help start the process of building trust, but nothing beats a great reputation leading to referrals and the relationship with existing clients, which can survive even if things aren’t perfect. (I should be mad at our existing service provider for locking me into the bad rental deal, but accept it is business and our furnace is essentially “good” — so can continue with that organization with a service contract.)

Corey’s technique of moving the price to the middle of the sales call I think represents an incremental improvement on standard practices. I think “standard practices” — that is proper sales and business development technique and skills — is far better than a passive “take the order” mind-set. But the very best results always come from the quality of relationships you build, and how well you build and enhance your reputation in the broader community (marketing). That is the sweet spot in marketing and business development success.

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