How to Use Buyer Psychology to Increase Your Average Ticket Price
Most home improvement contractors assume that price is the ultimate determinant for homeowners when choosing a company to service their home. The reality is quite different. In fact, most homeowners only make the mistake of hiring the cheapest home improvement contractor once before they learn the tried and true concept of 'you get what you pay for.'
Virtually every buyer, whether they’re purchasing a car or services, needs to believe they are getting the appropriate value for their money. And, just like with cars, very few choose to buy the cheapest thing they can find. The same consumer behaviors apply to the home services industry. For the exact same service in the same metro area, prices can vary wildly. Why is that?
First, it’s important to understand that your services aren’t a commodity. You’re not selling oats or hay. You’re selling a service, and the value of that service ultimately depends upon your ability to create value for the work you’ll perform. If someone calls and asks ‘How much does it cost to fix my air conditioner?’ and you respond with a price...congratulations, you just commoditized yourself! You’re now simply a dollar amount and nothing more. You gave the potential customer no other reason to buy from you, and chances are, they won’t.
So how do you de-commoditize your services and build greater value in what you do to extract higher ticket prices?
To fully understand how to create greater value in your services, it’s important to understand the psychology of homeowners when choosing to buy your services.
At Service Direct, we work with almost one thousand home improvement contractors across North America to help them grow their business. In our role, we're able to peer into the messaging and methods used by our clients to win business. What we've learned is that the best in each market use psychology to earn customers' business and build greater value in their service.
Here's some of their tricks!
BUYER PSYCHOLOGY TRUISM #1
Buyers are naturally suspicious so build trust immediately.
Remember that homeowner that hired the cheapest plumber they could find? That negative experience is seared in their memory. That’s a hurdle you have to overcome, but also represents a huge opportunity for you as a company to differentiate yourself from that experience and build more value.
Forget selling something for a higher price, a homeowner isn’t going to let you into their home if they don’t trust you.
So how do you build trust (and value) before even meeting the homeowner?
Build out a solid About Us page on your website.
Personalize your company, and your services, by telling the story of your people. Buyers trust real people. So, if they go to your ‘About Us’ and it’s a generic paragraph about ‘offering the best plumbing service' along with a stock image of a technician, you’ve just missed out on a HUGE opportunity to create more value by telling the story of your company through its people. Answer questions like...
Who are the founders?
Do they have a family?
Who are the employees that help customers every day?
What are they like and what do they enjoy?
Personalize your company, and your services, by telling the story of your people and sharing pictures of those people. While we’re naturally suspicious while hiring a (service industry), we’re also social beings. We seek some sort of relationship with others, and in your case, that compulsion can drive higher ticket prices. not a faceless or nameless website.
Prioritize getting your customers to leave you Google reviews.
If a homeowner can’t find reviews of your company online, again, HUGE red flag! But what happens when they can read the story and share in the positive experience another homeowner had with your company? They naturally imagine themselves having the same experience. Psychologically, you’ve begun the process of removing their trust barriers and getting them comfortable with building a relationship with your company.
Answer your phone consistently with a standardized professional greeting.
The next interaction you (hopefully) have with a potential customer is when they communicate with your company, typically through a phone call. The average phone call with your business is probably around 5 minutes. That’s not a long time, but there are some great opportunities in that limited interaction to build trust and increase the value of your service.
Greetings matter! For example, which of these would you appreciate more as a homeowner
B) ‘XYZ Service’
C) ‘It’s a beautiful day at XYZ Service, how can we be of service to you?’
Remember, even though you’ve hopefully help to build some credibility with your website, the homeowner is still entering that phone call with a trust barrier erected. A simple greeting can break down that barrier immediately, laying the foundation for a more productive and trustworthy conversation.
BUYER PSYCHOLOGY TRUISM #2
People buy based on emotions.
Any sales person will tell you that you should ask as many questions as possible during the sales process. Why? Asking questions and listening intently conveys to the other person that you care about what they are saying and feeling. Not only does it show that you are empathetic to their situation, it gives you an opportunity to learn more about what problems they are facing and gives you a great window to understand how you can position your company’s services as the solution to their problem.
BUYER PSYCHOLOGY TRUISM #3
People buy based on (perceived) value, not price.
It’s not unusual for conversations to involve pricing...most homeowners are price-conscious, but what’s really happening is they want to know that they are going to get the value for their money. The goal is to build value and get an appointment scheduled while without having to assign an exact dollar amount in that moment.
Speak confidently about the value adds your company offers to help them justify the cost. Here are some tips for navigating a phone conversation around cost:
Years of experience. We’ve been in business for 30 years and we’re here to stay. What good is a 5 year warranty on parts and labor if the company you choose might not be around in 5 years?
Trusted Employees. Our technicians are trustworthy - we do background checks and random drug screening because we want you to be safe and our people to be reliable and trustworthy. If we wouldn’t want them in our home, we definitely don’t want them in your home.
Certified technicians. Our technicians are trained on the most up to date techniques and we only use the best products - many fly-by-night contractors will put in the cheapest parts possible and aren’t willing to spend the money to be trained on the latest techniques and equipment. We invest in these things because we want you to be as safe and comfortable as possible and for our work to stand the test of time.
Let’s examine two phone calls. Which would you be more inclined to book with? And most importantly, which conversation builds trust, conveys concern and helps build value that can equate to more money in your pocket?
Phone Call #1
Homeowner: “Yes hello, this is Cindy Smith and I’m calling to see if you offer after-hours air conditioning repair service?”
CSR: “Yes ma’am we do. Our after-hours service charge is $259 for the first hour and $189 for each additional hour, plus the cost of whatever parts are needed for the repair. Would you like me to dispatch a technician?
Phone Call #2
Homeowner: “Yes hello, this is Cindy Smith and I’m calling to see if you offer after-hours air conditioning repair service?”
CSR: “Yes ma’am we do. Can I ask what you’re dealing with?”
Homeowner: “I came home and my AC unit is blowing air but there’s no cold air coming out.”
CSR: “Oh goodness, I’m sorry that has happened. And is today the first time you’ve noticed this problem? Do you know how old your unit is?”
Homeowner: “It is, and it’s so hot right now and I’ve got a 4 month old baby and my husband is out of town. I have no idea how old it is...he usually deals with this stuff.”
CSR: “Well we definitely need to get that cold air back on ASAP so you and your baby can get a good night’s sleep. What’s his or her name?”
CSR: “That’s a beautiful name. I have a daughter myself so I know what you’re going through.
Cindy, our technicians are fully licensed and accredited by NATE, which means they’ve undergone the highest level of training and certifications in our industry and can troubleshoot any issue you may be experiencing.
Not only that, but they show up in fully-stocked trucks so it’s almost always the case they have whatever parts will be necessary to fix your issue. Lots of companies have to diagnose the issue and then go to the hardware store to get the parts they need, meaning they can’t get it fixed right away and they’ll charge you for the time spent running to and from the store. Our goal is to diagnose your issue quickly and provide recommendations on the best and most cost-effective way to fix your problem.
Let’s see, I can have Dave out there within the hour, will that work?”
Now that you’ve earned their trust enough to book the appointment, there’s still more work to be done to instill more trust and build more value in your services.
BUYER PSYCHOLOGY TRUISM #4
Buyers will pay more for convenience and pleasant experiences.
Think of the experience around your services in 3 phases: Before, During & After.
Before the appointment
How can you create an enjoyable experience prior to the customer’s appointment that will show you care about them? One of the best things you can do is proactively communicate with the homeowner in 2 ways:
Let them know who their technician will be - send them an email or a text message with a picture of the technician, his or her name, and perhaps a little bio about him/her. Personalize it, and give them a chance to feel comfortable with the person coming to their home.
Let them know the timing of their appointment - by proactively communicating when your technician is headed their way and how long it will take him to get their, you’re letting the homeowner know you care about their time. Often times, they themselves are having to leave work to meet you, so if it’s the case you’re costing them money by not being on time and not communicating your delay, how likely is it you’re going to be able to build greater value in your service once you get there? You’ve already upset them and given them a reason to not trust you when you said you’d be there between 12-2PM.
During the appointment
This is your time to shine and really put your best foot forward. The companies that are able to extract large ticket prices understand the importance of this phase of the process and relentlessly train their technicians on the in-home experience. What are some things you can do to improve the homeowners experience?
Show up in a clean vehicle that is brand consistent - what happens if you show up in a beat-up pickup truck with dents in it and a cracked windshield? Homeowners will naturally assume that you don’t treat ‘things’ with care, and that lack of care will translate into shoddy service. If you roll up in a truck that’s wrapped with your company’s logo and is clean and well-kept, homeowners interpret that positively and will subconsciously assign greater value to that.
Put on shoe covers - they cost nothing, but the simple act of putting shoe covers over your shoes before entering their home has a huge psychological effect: “Wow, he/she actually cares about my home and making sure it’s kept clean.” That’s an emotional response (remember, they’re buying on emotion!) that you can assign greater value to.
Communicate often - most homeowners are in the dark about what’s actually going on with their problem and the process for getting it fixed. That creates uncertainty, which creates fear, which builds mistrust. You can diffuse those negative emotions by clearly communicating with them what you’re going to do (“I’m going to spend a few minutes diagnosing the issue and then I’m going to let you know what I’ve discovered and explain to you the options for getting it fixed, along with any costs associated with those options. I’ll be happy to answer any questions you have as soon as I know what’s going on. Does that make sense?”)
After the appointment
Upon completion of an appointment, whether or not they decided to use your service, is a great opportunity to get feedback from the homeowner. Again, what you’re doing is making a sincere effort to understand what they experienced and how they feel about that experience. The implication is that you want to know how you did and you want to know ways to do better. You want them to know you care. Why is that important? Because they’ll be even more inclined to use you later? But caring doesn’t need to stop a couple of days after your service call. Check in months later to see if they’re still happy, and use it as an opportunity to remind them of any seasonal promotions you have running for existing customers!
As you can see, many of the tips and tricks you can utilize to build more value in your services require an investment from you. Whether it’s maintaining or upgrading your vehicle fleet, utilizing 3rd party software tools, or even training your employees, these costs can certainly add up. But over time, these investments, if done correctly, will add up to more booked appointments, higher average ticket prices, and a higher lifetime value of a customer. Not only that, but you may be able to reduce your advertising costs as a percentage of overall revenue. Taken together, investing in these resources to capitalize on buyer psychology can have a huge impact on your company’s bottomline!