A Lost Sale – What Could I Have Done Better?

A Lost Sale – What Could I Have Done Better?

How I handled a job estimate and what I could have done better

I recently quoted a big 3,500 sq ft home in Granite Bay, an upscale part of one of the counties we serve.  The project was going to be a big one: two systems, a 5-ton and a 3-ton with ductwork and possibly insulation blown-in.  Of course I wanted the job, but if I don’t get it, I don’t get it.  I want to talk about how I handled this job estimate and what I could have done better.  Let me know your thoughts about this lost sale.

The Customer

The customer wanted two new systems with a Trane CleanEffects filtration system, plus ductwork, and a way to get one guest room air when it would be occasionally occupied.

When I went on this call, I noticed it was in a prominent area of the county where homes are enormous and expensive.  This house had an upstairs and downstairs, and as I said before, it had about 3,500 sq ft of conditioned space with very little insulation.  We talked about his project, and he seemed set on variable speed systems, which for those of you who might not know is the premium technology currently used in our field.

The customer did tell me that he liked us when we quoted a system for another property of his.  He ultimately didn’t choose us because our price was too high.  He found another company that gave him a mid-tier system for less money that would suit his rental just fine.  And he let me know he was getting “quotes from other companies too.”

The Work

Unphased, I did my usual routine of measuring the house, and checking insulation levels.  I took note of the windows in the house, checked the ductwork, and discussed another way to run the ductwork to one room that was on two different zones.  I checked with the customer for areas of the house that might have hot or cold spots.  Then I checked the return sizing and other possible ways of setting up his HVAC in the attic.  The ductwork could be run closer to the attic floor.  It could be buried with the potential new insulation for more energy savings.

I went out to my truck and wrote up the quote.  I provided several options, but he continued to focus on a variable speed system and possibly the 2-stage system.  So those are the numbers I gave him.  I also quoted him on a one-to-one Mitsubishi wall mount or ceiling mount in the guest room.  All in all, with two variable speed systems, ductwork, and insulation, the quote totaled at around $40k, give or take.

The Offer

When I came back in, I reviewed our sales book and system options and showed him our prices for his project.  He let me know our price was already higher than another company’s, and did I want to see their quote for the job?  I respectfully said no, I didn’t need to know the pricing because I was secure in my numbers for the job.  If another company could offer him the same things we were offering for the job, I understood if he chose them.

On a side note, I feel like with the extras we throw in on our jobs as well as the warranties and preventive maintenance we include, not too many companies can match our price apples to apples.

We finished up our conversation at the table, and I told him I was willing to work with him on the price a little.  I said I was confident that the difference in workmanship would show once that job was done.  We parted ways, and honestly, I didn’t feel too hopeful I’d be contacted by him again.  He seemed to be all about price and nothing else.

The Response

A couple of days later, he emailed me.  He asked questions about mixing systems furnaces with air conditioners, how much to change one of the systems to a 2-stage, and a couple of other basic questions.  I promptly answered his questions that night after work.  I was even able to get his new price down to below 40k for the whole job. It’s a slow time of the year, and I was willing to cut down on profits to win the job and keep my guys working.

The next day he asked me if I could just give him a quote for the 5-ton system, and he’d do the 3-ton later.  I was able to get him a smashing deal.  It meant I’d take a meager but still reasonable profit for doing the job.

Following Up

That was March 19th.  On the 23rd, I dropped him an email asking him how the bidding process was going. On the 30th he wrote back.   (Mind you everyone’s been going through the whole coronavirus lockdown, so it’s a crazy time for anyone to be thinking about replacing their system).  He said:

“As you know, we had several companies provide estimates for the HVAC.  Your estimate was very similar in equipment and price to two others.  The fourth estimate was several thousand dollars cheaper than the other three.  I have gone back and forth with the estimate and the company to make sure I am not missing anything because it was that much cheaper. I’m still waiting to decide because of this pandemic, but I am likely to go with the lower bid.  I hope you understand.  I appreciate your taking the time to discuss with me all the options. I’ll certainly keep you in mind for the other HVAC unit and the attic insulation.”

Sleeping On It

When I get news like this, I never want to respond with my initial feelings.  I’ll usually make sure I sleep on it before replying.  The next day I wrote back:

“Hi Mr. Jones, I can certainly understand why people want to go with the cheapest bid all the time.  It’s like going on Amazon because you know the price is going to be lower than retail stores.  But in the case of HVAC and what is involved in your job, I would seriously consider using the middle price as long as it’s a reputable company you’re comfortable with.  I know the numbers on this job, especially if you’re using Trane or American Standard.

Someone who is several thousand dollars less than us other companies aren’t netting anything.  I would be leery of a company like that. Consider the service after the install:  warranties, workmanship, and if the company is licensed and insured.  Any of us other three companies that are close in price are there because we want to be around for our customers next year when you need us.  From my experience in the industry, the companies low balling like that are here today and gone tomorrow.

I don’t mind who you go with.  Still, for the sake of us other three companies who are at typical market value for your project because of our reputation for quality workmanship, I wish you would reconsider.”

His Decision

The next day he clicked “Decline” on our electronic estimate on Housecall Pro, which I like.  It’s easier to know which jobs we’re still in the running for and which ones we’re not.  But this one came across a little bit like a door shutting in my face. I’m not upset with the outcome.  Honestly, it’s a huge job with lots of foot traffic and lots of ductwork.  I’m somewhat glad we don’t have to do it.

How Would You Handle This?

Is there anything you would have done differently on this? I’d genuinely like to know your thoughts, whether it’s positive or negative.  I want to take something away from this to gain knowledge.  Was my final response back to him too harsh?  Perhaps that’s why he didn’t respond further.

Let me know your thoughts down below.

Thanks for stopping by and we’ll see you on the next blog post.

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