The Psychology Behind Buying HVAC: Part 1

What really makes homeowners say “Yes,” when making HVAC purchasing decisions?

It’s not always about the price — it’s about the feeling behind your purchase. Even when homeowners trust the contractor and want a better system, that initial sticker shock can trigger doubt and stall the sale. So how do you keep customers engaged without racing to the bottom on cost?

On this week’s episode, New York Times bestselling author Weldon Long unpacks the psychology behind HVAC buying decisions. Learn how to use tiered pricing to ease objections, rebuild confidence, and give homeowners the power to choose comfort levels that fit their needs and their budgets.

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Audio Transcription (in beta, please be wary of typos)

00:00:00:00 – 00:00:09:09

On today’s show, you’re going to learn all about the Hvac buying psychology.

00:00:09:12 – 00:00:30:20

And selling at the kitchen table is one of the most important things we do. But we have to understand the buying psychology that goes hand in hand with our selling psychology. On this week’s show. I’m very excited about having this conversation, and the reason I’m excited about having this conversation is because it’s so important to our business today.

00:00:30:23 – 00:00:50:17

And, you know, I’ve been in this contracting world for for a long, long time, about 20 years now. And the contracting world, the residential Hvac, plumbing, electrical, it’s just given me a lot of amazing things in my life. And, you know, at this stage in my life, as they mentioned, I’ve written several books, including, The Power of Consistency, a New York Times bestseller.

00:00:50:19 – 00:01:12:23

And so I speak in a lot of different organizations, a lot of different industries. But it’s important to know that I come from this industry. Everything I know about making money, everything I know about growing wealth and prosperity, I learned in the residential heating and air conditioning business and so on. I’m extremely grateful to the industry. It’s a wonderful business, a wonderful industry with a lot of really great people.

00:01:12:29 – 00:01:31:26

And I’m very excited to talk to you today about one of the most important things that I have found in growing my company. I’ve had about six, 6 or 7, maybe eight Hvac and plumbing companies over the course of the last 20 years. And as Dave mentioned, I started the new one just four years ago, and we’ve had an enormous amount of success, which I’m going to share with you.

00:01:31:29 – 00:01:53:15

But it’s because we understand the psychology of compromise choices. We know how to sell. In fact, I tell folks in our companies, we are not a heating and air conditioning company. We are a sales and marketing company that happens to install air conditioners and furnaces. So because we have that kind of that different mindset, I think it really helps us scale our companies quickly and profitably, as we would hope.

00:01:53:15 – 00:02:12:29

So when we talk about sales. I took this, about an hour ago from my service titan. This is my rolling 12 months, 365 days. And you can see there the number is just over $13 million. This is our fourth year in business and our year to date so far this year 12.69. So we’re right there again. By the time we finish December we’ll be just over 13.

00:02:12:29 – 00:02:34:16

And so people ask me like, how do you do it? How do you grow these companies so quickly? You know, I talk to folks who’ve been in this industry for 20 years and they’re struggling to hit 5 million or 2 main or 7 million or whatever the case is. And the reality is you have to focus on the sales process and elevate the sales process to the same level of importance as the operations.

00:02:34:19 – 00:02:52:05

As an example, if you had a really, really busy day, you had 100 service calls stacked up. You would probably never go to your accounting department and say, hey, can you guys run some service calls for me today? We would never do that, right? But when it comes to selling, we find somebody with a pulse and a heartbeat and we’re like, hey, you’re the sales guy, right?

00:02:52:06 – 00:03:10:26

So, you know, we gotta elevate the importance of the sales function. That is what I do. And this is why I had the success that I have in this industry. And a huge part of that is understanding the psychology of buying the compromise choices philosophy. And if you’re going to see a little bit old school, a little bit retro with price cards, right?

00:03:10:26 – 00:03:30:08

I know everybody’s gone high tech these days, but I’m telling you, I have learned there’s a lot of value in the high touch part of this business as well. So let’s talk about the power of compromise choices and using price cards to quickly scale your business and to dramatically increase your sales. So I want to talk to you about two little stories that give an example.

00:03:30:10 – 00:03:48:21

Kind of what this compromise choice is, is this is a philosophy I’ve lived for 20 years, in the Hvac world and even before that. But, as there’s a couple of great stories here, I think really illustrated. So there’s a, a chain of high end kitchenware stores in the malls all across the country called Williams-Sonoma. You’ve probably seen them.

00:03:48:21 – 00:04:07:28

You may have shopped in them, but they sell high end kitchenware and knives and, you know, plates and pans and all the kind of stuff that, you know, a gourmet chef would want, right? All high end stuff and a number of years ago, they decided at Williams-Sonoma that they wanted to, to offer a bread baking oven for their customers.

00:04:08:03 – 00:04:28:27

Right. Because I guess people are getting into baking their own bread these days, whatever it is. So they went out and they sourced a line of bread baking ovens that they thought was going to sell like hotcakes. It was very reasonably priced. It was very high quality, great reviews, that type of thing. And so they went out and put them in every store across the country, and they could not give them away.

00:04:29:02 – 00:04:50:11

Right. Nobody would buy these bread baking ovens. So after a while they got to thinking, you know, maybe, maybe our customers expect a higher quality, a more expensive bread baking oven because it was a medium priced of it. You know, it wasn’t like one of those super high end ones. And so what they did, they found another supplier of these ovens, a higher quality, a more expensive one, a fancier one.

00:04:50:14 – 00:05:10:05

And they started swapping out all of the the inventory in the store. And what happened, though inadvertently, is that some of the stores kept both of the items on the shelf, the old one, and then the new, more expensive one. What do you suppose happened to the less expensive one? The one they couldn’t sell before they started selling them lights out?

00:05:10:05 – 00:05:35:25

Right. And they learned a very important lesson about compromise choices, because when you give your customers, your homeowners, only one choice, you’re giving them a choice of all or nothing. You’re giving them a choice. But the second choice is to do nothing, right? When we offer multiple options, we have the choice of the, you know, the the high end, the mid range or nothing, or maybe even maybe even a basic option.

00:05:35:28 – 00:05:58:17

My point is, people, as we all know, tend to kind of align down the middle. We don’t want the cheap guy, we don’t want the high end guy. We want the just right guy. Now, to do that, we have to incorporate some things in our in our sales process. There are certain ways we can set this up and make sure that we’re capitalizing properly on this psychology.

00:05:58:17 – 00:06:26:07

Now, this is not just about having three options or five options or whatever. There’s a lot more to it than just having a number of options. You have to to to create your process around this concept. Let me give you another example of a manufacturing client. This is a client of mine. The client shall remain nameless. But about ten years ago, this client called me up and they said, hey, we are looking for someone to develop a sales training program for our 2000 dealerships, 2000 dealerships.

00:06:26:09 – 00:06:39:29

And I said I’d be happy to do it. So we got to talking. And, the guy eventually. I never asked budget, by the way, we’ll talk about more of that later. Why that’s important. One of the biggest mistakes you can make on a sales lead is to qualify your budget on your home. So I’ll explain it more later.

00:06:40:02 – 00:06:56:18

So I didn’t ask budget, but this guy tells me at some point their budget for the program is half $1 million, 500 grand. So they asked me to put some, proposal together and send it to them, so I did. I spent the entire weekend with my staff. We put the proposal together and we sent it off on on that next Monday morning.

00:06:56:21 – 00:07:18:21

And my first proposal, the first number in the proposal was $10 million. Now, I had no delusions whatsoever. They were going to spend $10 million, but I was pretty sure they could spend a couple of million if I just approached this right with a compromise choices philosophy. So they get the proposal for $10 million. They just about have a heart attack, $10 million.

00:07:18:23 – 00:07:35:28

Didn’t hear a thing we said. We said our budget was half a million. And I said, well, half $1 million isn’t going to solve your problem. You got $2,000 going to cost at least $5,000 per dealer per year, right? $5,000, 2000 clients. That’s $10 million. Do you want the problem solve that? They said, well, you’ve lost your mind.

00:07:36:00 – 00:07:51:04

And so then they invited me down to their headquarters to have this conversation, and they want me to explain this $10 million. And I’m going to say, I had so much extra stuff packed in there, like tons of live events and a television show every week for their for their dealers. It was just over the top, and I knew they were going to spend that kind of money.

00:07:51:04 – 00:08:11:03

But again, I’m practicing compromise choices. So I go down there, takes 2 or 3 meetings. They had a whole committee and it was a Japanese owned company. And so my final meeting was actually in front of the Japanese decision makers, and I’m presenting through interpreters, which was a whole bizarre experience. But I end up closing the deal for $2 million.

00:08:11:06 – 00:08:30:21

Right. And we go out to dinner the night of, after we sign the agreement, we go out to dinner, and there was just one guy whose name was John. That was one I’ve been dealing with primarily this whole cerebral couple of month period. And we’re having dinner and John turns to me, I’m sitting next to him, and he turns to me and he says, he says, Mr. Long.

00:08:30:23 – 00:08:48:18

He says, you know what we were all thinking when, when you came down to $2 million in his mind, I came down from 10 million. It didn’t occur to him that he came up from half a million, right? Four times our original budget. And I turned to him and I said, no, John. I said, tell me what you were thinking when you got me down to 2 million.

00:08:48:21 – 00:09:13:04

He says, well, we were all thinking, who least it wasn’t 10 million, right? That is the essence of compromise choices. Hi, I’m Daryl, you shouldn’t ski. Hey, I’m Bob Larkin. Many of our contractors meet with us monthly. And you? Chances are I’ve met with us monthly. We found that members have deeper and greater needs. So we came up with next level coaching, which is we meet a lot more often.

00:09:13:11 – 00:09:34:22

And there is accountability to deal with some of the issues of money growth, finding employees, having an exit strategy to get off this roller coaster. These are the issues the contractors want answers to, and we can provide those answers. The next level coaching. When you join next level coaching, you’re going to find solutions that are easy to implement and logical.

00:09:34:29 – 00:09:57:06

Most importantly, we hold you accountable to specifics. We’re going to meet twice a month and have specific to do’s. And with those specific to do’s, we’re going to discuss and dive into your financials in a very granular way. You’re going to have a clear budget. We’ll be able to establish pricing. We’re going to help you create leadership programs to build your people.

00:09:57:13 – 00:10:22:24

We’re going to help you find people. You may think of differing ways to engage employees that will keep them more involved by joining next level coaching. So if you’re interested in making more money, growing your company, finding good employees, and developing an exit strategy, give Dale on our call. We’ll be happy to talk to you about next level coaching, and we’re going to see you on the next level.

00:10:22:27 – 00:10:44:10

That is the essence and a prime example of compromise choices, right? People want to settle in the middle, but you got to hit them high. You got to hit them high with the shock value. Right. And so I want to talk to you about how this affects us in our business and the residential Hvac, plumbing, electrical world. So let’s say, for example, that you have solutions for your homeowner.

00:10:44:10 – 00:11:05:15

I just made these numbers up anywhere from 5000 to 15,000, up to 25,000. And you’ve got this range of solutions for your homeowner basic systems, maybe a furnace only up to more complex systems, higher efficiency, and so on. Well, obviously, let’s say you set your target for your average ticket of 15,000, which is what it happens to be in my company, our target is a 15,000.

00:11:05:15 – 00:11:26:02

Our average ticket on on a replacement opportunity. Right. Well, if I’m going to hope to get my homeowner at 15,000, I got to have them comparing that to 25,000, not to 5000 for obvious reasons. Right? Because when they see 15,000, you know what you want. I’m saying who at least it wasn’t 25,000 right now. The question is how do we get there.

00:11:26:05 – 00:11:51:01

And this illustration kind of helps us understand that. So let’s say my target is $15,000, which it is. And those two blue circles are giant boulders and they’re on a hill. And I got a choice. I’ve got to get that boulder to $15,000. Got a choice? I can start at the bottom. And using brute strength and trying to fight the forces of gravity and try to muscle that 5000 on a boulder up to 15,000.

00:11:51:03 – 00:12:09:07

It’s going to be exhausting. It’s going to be very hard to do. But then I have an option of having a helicopter come in at the top of the mountain and put the big boulder up there, and I can use gravity and leverage in my favor and lower it down to 15,000. Obviously, that’s going to be easier. So this is the strategy that we have to use, right?

00:12:09:11 – 00:12:27:27

Again, when this manufacturer came to me, they had a budget of 500,000. I wanted to get them somewhere around a couple of million. So I had to hit them at 10 million. Right. It’s all relationship. It’s all, relational. Rather, it’s all contrast. Right. So the key is I got to get my homeowner looking at that 25.

00:12:27:28 – 00:12:43:26

Seriously, not just showing it to him and saying, oh, no, nobody ever buys this one, Mr. homeowner. That is the lamest thing I’ve ever seen somebody do. I’ve seen sales guys do that. I’ve been doing this for 20 years. I’ve done thousands of ride alongs and guys will pull out the price cards. Whatever they’re looking at, they’ll say, well, nobody really buys this one, right?

00:12:43:26 – 00:13:05:19

And they completely undermine their own ability to leverage compromise choices because basically they eliminate that one like it didn’t exist. Now they’re looking at 15 to 5000. Guess where they end up? Around 10,000. It’s common sense. Ain’t rocket science right. So this is the strategy I have to pursue. The question then becomes how do I get my homeowner to even consider a $25,000 system?

00:13:05:19 – 00:13:25:17

This is the critical thing because the $25,000 offer, or in my case, that $10 million offer has to be legitimate. It can’t be some throwaway offer. It has to be seriously considered as a possible option. And this is where people really screw things up, right? You have to know how to position this to make the 25,000 actually work.

00:13:25:17 – 00:13:42:05

So there’s three key steps that you have to take to do this. I mentioned the first one already. Do not qualify. Total budget qualified monthly budget. In fact, when I’m on a call I say Mr. and Mrs. Homeowner without taking any sharp off the pancakes. What can you guys afford to invest on a monthly basis in this new system?

00:13:42:11 – 00:14:00:22

I want a monthly budget because they’ll tell you 200 bucks, hundred and 50, 200 bucks plus their energy savings. They can qualify for any system we have, right, with the 200 $200 a month budget, but don’t qualify. Total budget. Why? Well, number one, there’s about a 99 chance out of 100. They’re going to lowball you. They’re going to give you a ridiculous number.

00:14:00:25 – 00:14:18:00

They may be thinking 1214 15,000, but what are they going to say. They’re going to say, oh, my neighbor got one for 8000. And now you’ve boxed yourself in a corner. How in the heck are you going to offer a 25,000 system? And remember, we have to be able to offer that not because they’re going to buy it, but because it puts the 15,000 in perspective.

00:14:18:03 – 00:14:41:00

But I got to be able to offer that 25,000. If they tell me their budget is $10,000, how in the heck am I going to recommend a 25,000 option? They’re going to think I’m crazy. 25,000. We told you 10,000. So I don’t qualify budget. I think it’s one of the biggest mistakes that we make in our industry because you limit yourself, you box yourself in a corner and you box yourself in the corner of a lower number because they’re going to lowball you.

00:14:41:06 – 00:14:58:13

Even if they’ll spend 14, they’re going to tell you 8 or 10, right. So that’s a big part of this. When you’re doing your survey, however you go about your process, you do not want to say so, Mr. Homeowner, how much you’re looking to spend today, right? It ain’t going to work. You’re going to lowball yourself into a corner, and you’re never going to be able to offer high end systems.

00:14:58:16 – 00:15:21:20

And if you can never high end, offer high end systems, you’re not going to sell the nice 15 to 17,000 mid-tier systems. That’s just the reality. Been doing this a long time. So, you know, I’m speaking from experience. I know what I know. All right, so that’s number one. Number two, you got a price condition. You want to create the expectation throughout the course of your entire process that, hey, you’re not going to be the cheapest company, right?

00:15:21:21 – 00:15:39:02

Let me tell you something. When you get to the end of a sales call now, just before or just after your homeowner sees your prices, you know what their first thought is. Their first thought is, how much can I get them down? How much can I, how much, how much can I get them down off that price? That’s what people are always thinking when they’re dealing with contractors.

00:15:39:02 – 00:15:56:03

How do I get them down? If you follow a value based sales process like I’ve developed and we’ve developed here at, at EGA, you’re going to have your homeowner asking a whole different question. The question you want them asking at the end is, and I hope I can afford these guys, I hope I can afford these guys.

00:15:56:07 – 00:16:13:20

If you build that kind of value through your process, where they expect you to be more expensive and they’re hoping they can afford you, you have dramatically increased your probability of selling a higher end system. It’s just that simple. And one of the ways we do that, there’s a lot of different ways we do that. We have our entire sales training.

00:16:13:22 – 00:16:29:26

Courses are hours long. I can’t go through every, every concept in this little brief webinar, but the overall strategy is to increase value and create the impression you’re going to be expensive and have them think of themselves. I hope I can afford this guy, but I do want to give you one very powerful way to do it, and that is with the product demonstration.

00:16:29:29 – 00:16:52:03

A product demonstration is where in my company and my clients companies, we take the actual components of an Hvac system. I’ll use a gas flex, a filter dryer, hard start kit, maybe a piece of heavy gauge sheet metal. A float switch, anything I can, I’ll take two pieces of line set. This is my favorite. Take two pieces of line set and have one about six inches long.

00:16:52:05 – 00:17:14:23

Just a beautiful piece of copper, pure as a driven snow. I take a second one and lay the brazing torch to it. Right. And you know, when it has that oxidization, all that black carbon forms when the brazing gas is interact with the carbon and the oxygen. Right. And so it turns the whole thing black. And you put that brazing torch up inside that, that line set where you get all that black carbon and let it cool off and drop it the sandwich bag right, and then flake all that stuff off.

00:17:14:23 – 00:17:32:03

It looks like black sand. Right? So I explain to my homeowner, this is what happens when nine out of ten companies not do a nitrogen purge. Here’s what it should look like. And I talked him about putting putting sand in their motor oil. They would never do it. But that’s what they’re doing. And I talking about a lot of companies skip the step on the on the on the nitrogen perch.

00:17:32:03 – 00:17:46:00

Right. Because it adds a couple hours of work and people don’t want to mess with it. They just braise the hell of it. Don’t worry about it. Right. So we show them these things. But the key is every time I show one of the components to one of my homeowners, I will tell them, hey, does this increase the cost of the installation?

00:17:46:05 – 00:18:02:02

Absolutely. And if I was trying to be the chief guy, I could probably eliminate this step. But I don’t want to be the cheap guy. I want to protect your investment and protect your family. Right. So the whole time to this product demonstration, six or 7 or 8 different products, every time I show them one, they’re thinking, oh, this guy is going to be more expensive.

00:18:02:04 – 00:18:15:01

But you know what they’re also thinking? They’re thinking, man, this is the company I want. I hope I can afford these guys. Right. You see, you got to think about these things to people all the time. What do you do when people come up with the price? Objection. Hell, I was dealing with a price objection an hour before it came up.

00:18:15:08 – 00:18:30:28

Right. You can’t wait to. The problem comes up. You have to head the problem off. We do this 2 or 3 times a day. They do it 2 or 3 times in a lifetime. We ought to be better at it than our homeowners. So you got to condition them for price, and you got to get them to the point where they expect you to be more expensive, and they see why you can’t just say we’re more expensive.

00:18:31:02 – 00:18:54:21

You got to show them why. The product demonstration is a very effective way of showing them exactly how a system should go together, and how many companies will cut corners to lower the price right. And then also you have to kind of position yourself again, we want to have the ability to offer a high end system when we get to the end, not necessarily because, you know, we’re going to sell the 25 or 30,000 system, but you will sometimes, which is great.

00:18:54:29 – 00:19:15:15

But mostly I’m offering it to my 15 to 17 to $18,000 systems in perspective. Right. Here’s another tool. You can do it. All of you, at some point in your process should be doing a home comfort survey. It’s just where you go through and ask about hot spots and cold spots. Indoor air probably airflow problems. You know you’re trying to get a handle on the mechanical situation in the homeowner’s house, right?

00:19:15:17 – 00:19:33:03

So anytime you find a problem, let’s say, for example, you say, does anybody in the home have allergies, right? Oh yeah. Little sister’s got allergies. And I’ll ask about what the symptoms are. And then I’ll say at some point, Mr. Homeowner, is that something I should keep in mind when I design your system name and a hundred times out of order, they say, oh, yeah.

00:19:33:04 – 00:19:49:03

Keep in mind they’re not agreeing to buy it. They’re just saying, keep it in mind. Then I’ll go to airflow. Hot and cold spots. Yeah. The master bedroom is really uncomfortable. Well, is that something I should keep in mind when I design your system? And I’m sure. Right. Well, I can solve that with variable speed. Maybe a ductless system, maybe some some ductwork modifications.

00:19:49:08 – 00:20:11:26

My point is, there’s lots of ways I can solve the problem. What I’m trying to get is permission from my home owner to keep those things in mind. And guess what? At the end of the process, I’m going to keep it in mind, and I’m going to design a system that addresses Susie’s allergies, the hot and cold spots, their concern for efficiency because one of the questions you must always ask your homeowner always, always, always ask your homeowner, Mr. or Mrs. Homeowner.

00:20:12:03 – 00:20:29:03

On a scale of 1 to 10, how important is it for you and your family to minimize your carbon footprint for future generations? You got to ask that question. I guarantee you they’ll say eight, 9 to 10, right, everybody? I don’t care if it’s like a the executive at a Texas oil company, he’s going to say 9 or 10 because everybody’s concerned about the environment.

00:20:29:03 – 00:20:50:10

Right. So once they say eight, 9 or 10 it’s important I’m going to say, well, is that something I should keep in mind when I design your system? Yeah, I guess so. Well, they just told me to keep in mind high efficiency, variable speed, indoor air quality just by virtue of keeping all those problems in mind. When I design the solution, it’s going to be at 25,030 thousand solution.

00:20:50:12 – 00:21:04:08

Just the solution to those problems are expensive. Now that doesn’t mean they’re going to buy it. That just means I want to hit them with the shock value, and then we’ll bring them down to a number they’re comfortable with. Right. We got to get them to the top of the mountain first, and then ease them down into a number they are comfortable with.

00:21:04:08 – 00:21:19:20

But here’s what I’ve learned. If you go back to this drawing right here, I’ve been doing this for 20 years. I can’t even tell you how many thousands of leaves I run, but I guarantee you, if I start at 5000, start pushing that that that boulder up versus at 25,000, letting it come down, it will always stop at a higher number.

00:21:19:20 – 00:21:35:23

When I start high versus starting low and trying to upsell, which is just lame to begin with. Right? So you got to make sure that you are not qualifying total budget, leave that door open. Even if that’s all your number. Just kind of ignore it, right? Just like my guy at the manufacturing company, he threw out the half $1 million number.

00:21:35:23 – 00:21:48:02

I just ignored it. I didn’t say I can’t do it for that. Just like, okay, you know, what? Do we get the end. They don’t know what they don’t know, right? You got a price condition, right? You got to create the expectation. You’re going to be expensive. Everything you do in the house should communicate. High value product demonstration.

00:21:48:02 – 00:22:03:03

Super important. Right. And then I’m going to go through my survey. And I’m going to find 3 or 4 of the problems in the house that the homeowner has, including efficiency, indoor air quality, airflow, whatever it is. And I’m going to say, is that something I should keep in mind when I design your solutions? And they’re going to say, yes, well, guess what I’m going to do?

00:22:03:03 – 00:22:21:22

I’m going to keep it in mind and design a solution for their whole set of problems. And just by virtue of being so comprehensive and addressing so many problems, it’s going to be expensive, right? It just is. So that’s how I set all this up. Awesome content right there, as always. Now, if you like this content, please share it with your friends on Facebook.

00:22:21:29 – 00:22:43:08

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