You’ve met with the homeowner several times, you’ve spent time putting together the plans, and the project feels good. You know the project is a fit, but then this happens: The homeowner who seemed so confident yesterday is waffling and coming up with objections today.
When this happens, the worst thing you can do is panic. Remember that for most people, making a decision regarding a remodel is major. We may not view the price as significant, but it’s their home and we have to respect why they may be hesitant.
Appeal to Emotion
When a customer objects and refuses to close, the first thing you need to do is restate to them the reason why they want to do the project. It might be the need to make room for elderly parents to live with them. It might be to accommodate their growing family or to bring the home up to standards to sell.
Regardless of the reason, it’s essential for you to never view the project as just a project, but rather as a solution to their needs. When they object, you state the need they’re trying to address. It’s too easy for a homeowner to get caught up in the project and forget about why they’re doing it.
Don’t hesitate to break down the need further by asking questions about it. For example, for the couple that is remodeling to make room for their elderly parents, you might say, “If your parents are like mine, the older they get, the more anxious they become. I’m sure they want to get moved in as quickly as possible.”
A family that is bursting at the seams might compel you to make a comment such as, “Years from now when your children are older, I’m sure they’ll look back on this house with very special memories.” Yes, we’re dealing with emotions—remember that emotions are what drive decisions, and customers simply want facts to back it up.
Let’s look at some facts. A person may challenge the quality of flooring you’re planning to use or the amount of excavation needed and view this as an area to cut expenses. With these types of comments, it’s best to come back and put the amount of the cut into the context of the value of the entire home.
An example might be a cut they want to make that would save $1,000. When we put this into perspective of a $400,000 home, it’s only a quarter of a percent. Don’t make the mistake of comparing the value of what they want to cut to the size of the project. Doing so makes the cut seem much larger than it is.
Another approach to dealing with a price objection is to frame it against the life of the house. If we figure 40 years for a home, then a $10,000 project can be looked at as a $250 annual insurance policy for 40 years. Again, it’s all in how we frame the amount.
Make it Personal
When the homeowner challenges our package against a competitor’s price that is lower, we immediately stress the value of our people. The competitor may spec the exact same materials, but they can’t spec the exact same people. This is why I always have pictures of each of my crewmembers. It’s amazing how much more comfortable a homeowner becomes when you show them pictures of your crew. Back this up by saying that if we don’t sign the project right away, they’ll be working on another project. People always want the best, and when they feel there is scarcity, it’s remarkable how quickly they will respond.
Another approach that plays to people’s ability to feel confident is to share other situations where you’ve had the same conversation about making cuts. As you share this, you then explain that as the project with cuts progressed, the homeowner realized the cuts were not a good idea and they changed back to the original plan. Your objective by telling them this is to essentially compliment them on being aware of what could be changed but also realizing some cuts ultimately aren’t the right idea.
When we take the time to share situations other customers have gone through and the experiences they had, we are allowing the new customer to feel more confident. The result of this approach is that the customer feels they’re in charge and making the decision, rather than being told what to do.
Know When to Walk
There is another approach I like—but you can use it only when you already have a good book of business and a solid reputation in your community. The approach I’m talking about is simply walking away. (For more on when to turn down a job, see p. 52.)
A customer who can’t or won’t make a decision and wants to haggle over everything is a customer who most likely is going to fight you every step of the way, throughout the project. It’s always amazing how the gut feeling we get during the design phase typically pans out to be true.
If a prospect is fighting you on price, then the best approach might be to simply walk away. This is something that should be done politely, for two reasons. First, you want to keep your reputation intact. Second, you don’t want be known as the tough negotiator. The approach is to politely say how you respect their decision, but for your business and the professionals you use, making a reduction in price is not possible.
It’s always amazing how many times they will come back to you and agree to the full terms. Again, I don’t advocate this approach unless you have a great reputation and you can keep your crews busy.