Good-Better-Best!

Through the years, equipment replacement pricing selected from a book has been known as “cook book” pricing or “good-better-best” pricing. We like to refer to it as “good-better-best” because it sounds more professional and we believe when presenting equipment pricing in this format offers retail customers choices to meet their budget and lifestyle. In addition, since everyone understands “good-better-best” it seems logical to stick with that terminology.

“Good-better-best” pricing is nothing new. Most products related businesses market and offer different models and different brands to satisfy customers’ wants or needs. The HVAC industry certainly is no different. However most contractors pull out their “creatures of habit” hat and place it on their heads when they offer a comfort system to a customer. We have found contractors or their sales people continue to sell the same brands and models sometimes forcing those brands and models to fit every application.

As a distributor, we know you’re happy when your customers continually recommend your brand of equipment. Certainly brand loyalty is what you strive for in business. However, improved product mix or selling an ever increasing number of high efficiency models is also of great importance.

Unfortunately, some contractors never give a customer the choice of an upgrade when proposing a comfort system. The result is your dealers may never achieve their full financial potential because of their pre-determined or “locked up and locked out” mentality when it comes to equipment offerings. At the same time, your high efficiency systems in inventory tend to “hang around” a bit longer than they should.

Equipment Sales through Good-Better-Best Pricing

Here’s the important point. A well designed “good-better-best” pricing guide always places equipment choices before the customer. It takes away the bad habit of only offering one piece of equipment when there is more than one choice that will do the job. It allows the retail customer the opportunity to choose what will best satisfy his or her needs for comfort, health and efficiency. It provides three price quotes to the consumer from your contractor customer and may satisfy the consumers desire to shop for other price quotes from other contractors offering other brands of equipment. It also allows for pricing add on components to the total system price making those components a part of the system rather than an after thought.

Good-Better-Best Expands a Contractors Sales Force

Good-Better-Best Improves High Efficiency Sales and ROI

In addition, contractors using a “good-better-best” pricing guide generally sell more high efficiency equipment and more ancillary products with each system than those that don’t give the customer a choice. The result is a higher selling price for each system sold and a higher profit margin for the contractor. It’s also good for energy savings.

Perhaps most important is the pricing established in the good-better-best system for each contractor is based on all costs associated with the installation and the contractor’s desired net profit. Hence, adhering to the pricing guide will guarantee the needed return on investment to the contractor proving his installation crews work efficiently.

Offering a Good-Better-Best Pricing System

So how can you offer a “good-better-best” pricing system? There are systems available whereby you can pre-load the brands and models that your company sells. Your customers then determine the labor rates, equipment and materials mark ups and desired net profit to be entered into the system to determine their customized equipment installation prices.

Once again, your territory managers will play a key role in explaining the benefits of a good-better-best pricing guide to your customers. They will serve as the catalyst to move the program forward within each contracting company.

Your territory manager can also coach your customers on making a professional presentation at the consumer’s home so that each sales person will have a greater opportunity for success in using the good-better-best presentation method.

With all the emphasis today on professionalism within the contracting industry, a good-better-best equipment pricing system for your dealers makes a lot of sense. When coupled with flat rate pricing for service and service agreements, your customers will stay ahead of the competition.