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Giving your clients options is an excellent way to differentiate yourself and get your clients emotionally invested in their project. Rather than offering one size fits-all type of roofing system, I would strongly suggest contractors educate their prospects on the different options available to them and letting them choose the options that best supports their vision for the project. Doing this provides a few powerful advantages to the contractor:
I know many contractors who like to offer free upgrades with the hope it will position them as the better value for the homeowner. Rather than upselling the client to better options, these contractors make those options a standard part of their roofing system; and I think that’s a mistake.
As much as I appreciate their desire and commitment to delivering a high-quality project, they must recognize that there's no value in free. The perceived value of those already included options is directly proportionate to what the client is willing to pay to obtain those options. In other words, those options don't mean anything to the client unless they say they want them and they're willing to pay more to obtain them.
By offering the better options for an up charge, the contractor also gives the client something to negotiate, which also works to the contractor’s advantage. Here's an example using synthetic felt as the upsell option.
In this example, we're going to assume that the contractor has decided to offer synthetic felt as a standard part of their $15,000 roof system. Rather than offering the client a $15,000 synthetic felt roof, it's my recommendation the contractor offer the non-upgraded roof for $14,000 and then sell the client on the availability of a better synthetic underlayment for $1,000 more. The client's willingness to pay the extra $1,000 reflects them believing the product has a value of $1,000 or more.
With this approach, the contractor also sets the table for the prospect to negotiate, telling you they want the better synthetic felt roof, but they don't want to pay the extra $1,000 for it. If this happens, the contractor can make their request a condition of sale by saying, “If I was able to make that happen for you, would you be able to get the project started today?” Assuming the prospect says “yes” the contractor agrees to sell the synthetic felt roof for the price they wanted, and the client believes they got $1,000 in value for free.
The most effective way to upsell is to bundle options within a “good, better, best” product offering. It's my recommendation you identify five system upgrades you can offer and discuss those options during the product presentation stage. We're not going to discuss shingle options at this point. It's our goal to get the client sold on upgrading different components of their system and we’ll then bundle those upgrades into our “better” and “best” packages. This is designed to increase the perceived value and the customer’s desire to obtain the “better” and “best” packages.
When discussing system upgrades, I'd suggest you start by showing the client the ProFund Property Report. Use the pictures to highlight the critical areas, such as the skylights, chimneys, vents, dormers, valleys, and low slope areas. Highlighting these areas gives you the ability to discuss their susceptibility to leaks and your plans to ensure a successful outcome. You can also use the ProFund Property Report to show the Code Requirements as the minimum expectation and use the Weather Data to justify why they need consider more than the minimum expectation. I'd suggest you say, for example, “Mr. and Mrs. Homeowner, when you consider the type of weather we get here, which of these two options do you think is the better choice for your project?”
I suggested earlier that you offer up to five system upgrades and it should be your goal to sell them on at least three of them. If successful, you can then bundle those chosen options within your “good, better, best” packages, which increases the perceived value of those packages.
Before I show you how this process works, I want to talk about the power and the importance of showing offering a three-option “good, better, best” system. When you offer only two options, the client has nothing to compare them to, which often finds them settling for the entry-level “good” option. But when you introduce a third option, the client can easily disregard the least desirable option and base their decision on perceived value of the remaining two options. This method is extremely effective, and the vast majority of clients will go for the middle “better” option because it plays on their desire to avoid extremes. In many cases, buyers will see the “best” option as too expensive and excessive; a luxury which would be nice to have but not necessary. In contrast, they perceive the entry level “good” option as risky because the lower price and limited options suggests the quality may be less than what they'd like for their home.
This leads to what seems like a completely logical conclusion, the middle “better” option is the best of both worlds. Good quality, improved performance, and affordability; it's the perfect choice.
The other magic element of the strategy is the way it doesn't just prime the buyer to buy a particular option, it renders them more likely to make a purchase in the first place. This comes from our inherent need for choice. Choice makes people feel empowered. When given a few options, our natural impulse is to choose one of them, rather than just walking away and not choosing anything at all. There are many everyday examples of this. If you're a parent, you might go through the struggle of getting your child to eat fruits and vegetables. However, you may have noticed how your child is more likely to eat healthier, when you frame it in terms of a choice: “do you want to eat a banana or an apple,” for example. When you do this, you’re priming them to act within the bounds of the options you've given them.
When building your “better” and “best” shingles style options, you're going to want to make sure the shingle style options are a good architectural fit for the home. Choose a reasonably priced, aesthetically pleasing style for the middle “better” option, and then choose a high-end luxury product for the top of the line “best” option. The previously discussed system upgrade should be bundled in as “pre-included” options, letting the customer know that if they choose the “better” or “best” package they get to choose three of the proposed five systems upgrades at no additional cost. I suggest offering only three of the five because it gives the homeowner something to negotiate, letting you establish that request as a condition of sale. If the homeowner states they want all five options, for example, you can simply ask, “If I was able to make that happen for you, would we be able to get your project started today?”
I’d also suggest your pricing be focused on the package you want to sell your prospect. If you want to sell the middle “better” option, you should price that package as it needs to be priced for you to hit your target gross margin and then price the entry-level “good” package slightly lower. The top-of-the-line “best” option should be priced significantly higher than the middle “better” option. When presented this way, the client is likely to remove the higher-end option as being too frivolous and then see the middle “better” option as the best value because it's a better shingle style and includes all the system upgrades, they told you they wanted.
Differentiation is critical to the success of every contractor. Your ability to win the sale and protect your profits is directly proportionate to you being seen as different and better than the competition. Educating your clients on the different product options and giving them the power to choose is a great way to differentiate yourself and further position you as the contractor of choice.
If you’re interested in learning more about this pricing strategy or how to escape the price-driven sale, please contact me at: JDeRosa@srsdistribution.com