System Selling Sales Bytes®: Electronically-delivered “byte”-sized bits of information to help
sales people create more satisfaction and success for their customers, their companies,
and themselves.

• HVAC Spells Wealth: You Deserve a 25% Net Profit by Ron Smith
• Helping the Service Technicians Sell Maintenance Agreements Part 2 of 2 by Ruth King
• Brand You by Matt Michel
• Mr. Control Pro: Step Regular Gas Valves by Bill Ribble
• Leads, Leads & More Leads by Patrick Carr
• Service Roundtable "Oldest Appliance Contest Guide F*R*E*E  

• More

 Welcome 
by Tom Piscitelli

Selling with ROI is Better than Ever

Anyone out there NOT lost money on their investments in the last few weeks? Please call me if you haven’t so I can know there is at least one. Most of us are now painfully aware that investments aren’t a sure bet and that, at best, a relatively safe investment will give a very little return.

One of the most compelling, value-adding stories we have today when selling high-efficiency HVAC systems is the solid financial return-on-investment (ROI) we have to offer. As you will see, there will nearly always be a ROI that exceeds other investments such as savings accounts, certificate of deposits, and certainly the recent stock market returns…at very low risk.

So what is return-on-investment? Simply put it is the money returned by an investment, divided by the investment amount. For example, if you invest $100 and receive $3 interest, then the interest (return) divided by the investment is $3 / $100, or 3%. We call this a 3% return on investment, or 3% ROI.

In HVAC terms, the investment is the total amount we are asking them to spend. The interest or return is represented by the Estimated Annual Energy Savings.* For instance, you might propose a package including a high-efficiency hybrid system, high-efficiency air filter, steam humidifier and system control for a Total Investment of $14,000. Depending on the weather conditions, utility rates and customer usage, the annual gas and electric energy savings might be $700. The ROI would be $700 / $14,000 = 5%. Pretty darn good!

It gets even better than this. Try making this comparison:

If you were to invest this same $14,000 in a passbook savings account you might get 1-2%, or a CD might get 2-3%. BUT these returns are taxable! That means that the net return-on-investment will be the initial ROI less the customer’s tax rate. This can be calculated multiplying the ROI percentage by (1- tax rate). For example, a 3% taxable ROI for a customer with a 28% tax rate would produce an after-tax Net ROI of 3% X (1-.28) = 2.16%. Yuk!

But when your customer invests in a high-efficiency system those energy savings are NOT taxable…so the 5% ROI in our example is tax free to the customer!
Wait, you say, in a typical investment you’d get to keep the interest and the principle. True. In this case you don’t get the Total Investment/principle back but if you can shift the customers’ thinking about HVAC as a heavy expense and help them see that the overpayment they are making every month in their utility costs can pay for their entire investment over its lifetime then you’ll have another powerful reason for them to consider your top-of-the-line choice.

How do you know which customers will be interested in ROI? Ask them! “Would you be interested in knowing how the energy savings from a high-efficiency system will produce a better return on investment than almost anything can put your money into today?” These days, who wouldn’t say yes to that?

Here’s my suggested Selling With T.R.U.S.T.® sales strategy for ROI. Save it! Make sure you are first showing the customer how they will get the other fantastic benefits they asked for, including more comfort, quieter operation, more convenience, the peace of mind from longer equipment life and fewer problems…THEN, when you need it, show them that the return on investment is better than almost any investment they can make today. In other words, use the ROI story to as a Closing Tool.

Upselling SEER with ROI

Should you try to upsell SEER with ROI? You can run the numbers but in most areas of the country the incremental savings are small. Besides, upselling to high-efficiency air conditioning is better justified with other benefits including quieter, more peace of mind from better warranties and the other benefits unique to each manufacturer.

Selling Variable Speed with ROI

One of my favorite HVAC features is variable speed blower motor operation in furnaces and air handlers. And it may have one of the best ROI stories we have. If your customers have been running their blowers 24/7/365 for comfort or quiet or the improved health benefits of having the high-efficiency filters constantly working, then the savings from variable speed motors can be $3-400 per year!* To calculate the ROI we would divide the return/estimated energy savings by the incremental investment for variable speed. For example, the $300 Estimated Annual Variable Speed Electrical Savings / $1,000 Incremental Investment for the Variable Speed Furnace/Air Handler = 30% Tax Free ROI!!! It doesn’t get better than that! So if you have a customer running their old system blower constantly for any reason, selling them a variable speed system should be a slam-dunk!

*For copies of worksheets to help you calculate Estimate Energy Savings and/or Estimating Variable Speed Energy Savings send Tom an email request at tpiscitelli@msn.com.


Good Selling!
 

 Service Roundtable "Oldest Appliance Contest Guide"  

One of the recommendations in my home show presentation is to run an oldest appliance contest (e.g., oldest furnace contest, oldest water heater contest, oldest air conditioner, etc.).

I’ve temporarily moved the Oldest Appliance Contest Guide to the Freebies section of the Service Roundtable. Whether you’re a member of not, you can download it now at https://www.serviceroundtable.com/freebies/default.asp.

Using this kit and his own enhancements, Service Roundtable member Juan Cardona achieved the following results:

• 2,500 people attended the show (eliminate exhibitors, combine couples and families into households, the number of prospects was probably no more than 1,000).

• Over 400 people stopped to look at Juan’s booth.

• Sixty people signed up for the oldest air conditioner contest.

• So far, Juan has visited 40 of the 60.

• Juan has made 12 sales, totaling $93,600 to date. He still following up.

• Juan spent $2,689 for booth space, performers, advertising, handouts, and artistic talent.

This will work for furnaces, air conditioners, water heaters, refrigerators, ovens, microwaves, televisions, computers, and any other appliance. For a limited time, download it for f*r*e*e.
 

 Articles by Tom 

READ TOM PISCITELLI'S SYSTEM SELLING WITH T.R.U.S.T.® ARTICLES THAT HAVE BEEN PUBLISHED IN HVACR Business Magazine.

Go to HVACR Business Magazine.

 Thank you! 

Thanks again for your valuable time. There is so much more to come. If you enjoyed receiving Systems Selling Sales Bytes® you can forward this to a friend by clicking "Forward Email" below.