I Had No Idea It Would Cost This Much!” (How to Handle It) | In-Home Sales
Prefer To Watch: Here’s The Video
Summary
Learn why sticker shock is normal and how to turn it into an advantage
Understand that price doesn’t determine the sale—perception and value do
Discover how to build credibility to reshape what customers think things should cost
Master value-building techniques so customers focus on worth instead of price
Why Sticker Shock Happens in Home Improvement Sales
One of the common questions I get on my training program on how to sell home improvements is how do I avoid sticker shock with my customers. If you do your job right they should be sticker shocked. Shocked at how low it is 😊
When I first started doing home improvements over 35 years ago and before I paid the dues of being in over 16,000 homes I lost a lot of sales because I didn’t know what to do when I got to the home and they said things like if your product is more than x that I’m not doing anything.
I wrongly thought that if they only wanted to spend a certain amount of money, had no idea how much my home improvement was going to cost or thought my product was going to be half of what I was charging that I had no chance of making the sale. And like all self fulfilling prophecies I was right. I didn’t have bad customers I had bad knowledge. I didn’t know that what I thought was a difficult customer was really just the way this business is.
Customers Don’t Know What Things Should Cost
The point is that when selling home improvements most people don’t know how much it’s going to be. It’s usually a once in a lifetime purchase. They have never bought a roof, windows or kitchens before. If I tried to sell you a can of pop for fifty dollars you would know it was wasn’t right.
Now if you have never bought a roof before how would you know if was going to be five thousand or fifty thousand? Now add the fact that there are as many ways to make a window as there are to make a purse and it’s confusing. So expect them to say I had no idea or I thought it was going to be this. And be prepared on how to handle it.
Price Doesn’t Change the Close Rate
Quick story. I’ve sold virtually all home improvements from security systems and windows to swimming pools and bathrooms and everything in between. When I sold windows in 1997 I worked for a high end company that was selling double hungs that were 100 united inches for about $1300 each.
At that time it was one of the most expensive windows out there and nationwide the closing rate was about 1 out of 3. Of course the people who didn’t buy said it was too much money. After that I did some consulting for a company that sold more mid range windows at about $800 each and I noticed that the closing rate nationwide was an average of about 1 out of 3.
And still people who didn’t buy were saying it was too much money. Then I worked for a company that sold only on price . You know the free installation, buy 3 get one free etc. companies where it worked out that at that time the average cost was about $400 each and you guessed it the average closing rate nationwide was about 1 out of 3.
And yes the people who didn’t buy were still saying it was too much money. It didn’t take a rocket scientist to quickly figure out that ever since then anytime I had a choice to work for someone I gravitated to always sell the most expensive products because it meant higher commissions and once I learned what I’m about to share with you could sell them just as easy as if they were the lowest price products. I telling you this so it sinks in that the price really has nothing to do with you making the sale as far as the customer is concerned.
What You’ll Learn to Avoid Sticker Shock
The only difference it makes is in your mind. And if your mind is not right it will hurt your sales. The good part is is that you can change your mind.
And if you want the more detailed breakdown including exactly how I build value and then how I close once the value is built, my training program The Art Of Selling Home Improvements walks you through it step-by-step—from what to say, to when to say it, to how to get the signature without pressure. The links in the description below.
The Real Goal of Your Sales Presentation
The whole point of this article is that it doesn’t matter how much the customer thinks it’s going to be when you get there. What matters is how much they think it’s going to be and what it’s worth after you are done with your sales presentation. With that understanding even if I go to someone’s home and they think a roof is going to be $2000 or they say things like if your kitchen is going to be more than $5000 you’re wasting your time that it honestly doesn’t mean anything to me and is easily overcome. Understand this and you will be rich in this career. Don’t and you will have skinny kids.
Price Is Just a Perception
The first and key thing to understand is that price is just a perception. It is not written in scripture how much an hvac system cost. Nobody was born knowing how much a bathroom costs. The customers perception of price is based on information they have received. That information could be other estimates, what their friends told them or something they found on the internet. I’m sure you know that if you saw it on the internet it’s true. 😊
The key and most valuable thing I can tell you in this artcile is this. Since price is a perception created by information a customer has gotten I can change the perception of price in the customers mind by being more credible than the information that originally created the perception. And if they have no perception I can create the perception of price in the customers mind in a way that they don’t have to look around to compare.
You have to take responsibly that it is in your control and if they still think it’s too much money when you are done that you did a poor job.
You Must Believe in Your Price
So the second thing is that your understanding of the value of your price is just as important as the customers. The price has to be credible to you so you can make it credible to your customer. If you don’t think what you are selling is worth it it’s time to figure it out or get another job. You can’t sell something that you don’t believe in. Sales is a transfer of enthusiasm and if you don’t think you have a good deal how can you transfer that to the customer.
What Actually Creates Value
To build value you have to understand value. Price is comprised of more than just the intrinsic value meaning it’s just not the cost of the materials and labor. There are other intangibles that are just as valuable.
Do you really think the materials and labor for a rolex watch or coach purse are what it makes it costs so much? The cost of materials and labor for a $40,000 car really about $20,000. There are other things you need to understand and learn to sell to justify your cost.
The things that make up the price could be as basic as your company reputation and longevity. Suppose you had 2 companies selling you a roof and both had what seemed to you the same quality of materials and the same lifetime warranty.
The difference being that one was from a company that has been around for 50 years and had a great reputation and the other you never heard of and had been around for 1 year. The established credible company’s roof was $11,000 and the company you never heard of roofs was $10,000.would you pay the difference more to hire the established company . Of course you would.
So in that example the company alone was worth 10% more. Then add things like providing financing, having the right insurance, or having a separate service department to help you 24/7 and there a lots of ways to build the value in what you are selling. To do that you have to mention them and know how to use them in your offering. This doesn’t even include the quality of the materials or installation. The key is that you believe in your value and can transfer that to the customer.
Credibility Is What Changes Price Perception
The third thing is that credibility is the key to changing perception because you have to be more credible than the source that created the perception. To change or create price conditioning correctly they have to believe you. Let me give you an example I don’t care how much you thought a window was going to be .
If I was your best friend and you knew that I was an expert on new windows and you met me for a drink and you told me that you were thinking of buying new windows for about $500 each. What would happen if I said “look you can do that but your really wasting your money.
At that price they will be garbage to get anything really worthwhile and do what you want you need to spend about $1500 each in todays world. “ Now if was your best friend and you knew I was an expert would I have to say or do anything else than that which took me 3 minutes tops?” That’s what you are trying to replicate when you price condition a customer in the home. That type of credibility.
A common way to help build that type of credibility is by knowing how to use third party literature like costs vs value. Not just showing it but know how to introduce it and use it in a way that makes sense and not like you are selling.
How You Present Builds Value
The fourth thing that will help you build value is how you sell. . For example when I am getting commitments I say things like now it’s more expensive to use this hvac system with a scroll compressor and the variable speed but if you could afford it is this what you want.” Now they are thinking omg Ron was telling us the average hvac system was going to be about $14000 now with all this it’s probably going to be about $18000.
Don’t Undo Your Own Price Conditioning
Also you build value in how you talk and how you look. If I do it right they should be thinking “Look how professional Ron is. I know they aren’t paying him minimum wage by how he acts and how he looks. and with everything he has been telling us omg this is going to be 50k ?!” You build value.
People want and will pay for a professional . When you hiring an accountant do you pick the one that looks like you’d like to party with or the one that looks like a professional nerd?
Another tip is that if you are doing your price conditioning correctly they should be getting scared of the price . Don’t undo it. For example sometimes customers will sense that and say things like “omg ron this looks like it’s going to be really expensive” the typical sales person says “don’t worry it’s really not”.
You are undoing their perception. What I say is “ I won’t lie nothing good today is cheap but let’s see if you even want the rest of it because if you don’t want it it doesn’t matter if it’s a dollar right?” your right .. “then when we get to the price if you can’t afford it then you’ll know whether you have to hire someone else or what you have to save up for in the future. I know one thing we’ve installed kitchen in homes half as nice as this and to people on a fixed income so in most cases if the customer wants it we can usually make it affordable them. Ok ?“
Final Thoughts on Closing More Deals
Understanding how to build value and price condition correctly will separate you from the order takers and become a true closer. I hope these tips have helped you and if you have to watch it a couple of times to internalize it. Now if you liked this article, check out these other articles on closing and if you want the full system, The Art of Selling Home Improvementsis linked below. You can find tips on YouTube—this is the complete step-by-step process from value to close. Both are listed above or below in the description.
Happy Selling!
