How to Combat Manufacturer Direct Pricing
This week on ‘Ask the Experts,’ an HVAC Contractor in Maryland asked:
“We need to know how to combat manufacturer direct pricing and selling systems at cheaper rates to our customers over the internet? How are other contractor dealing with this?”
“Get mad. Get mad as hell,” exclaimed EGIA faculty member Drew Cameron.
“Who are you getting mad at? Yourself,” he continued. “The manufacturer sees you as the weak link in the process, since you didn’t give them what they wanted, they decided to marginalize you and squeeze you out.”
Cameron went on to explain that contractors are starting to see this more and more with certain manufacturers, but that this wouldn’t be happening in your territory if there wasn’t a demand for it from consumers.
“I don’t care if this is happening nationwide, I only care about what’s happening in my little corner of the world,” said Cameron. “So I’d go to them and I’d say ‘okay, here are your objectives for my market, how can I help you meet them through our channel? And if we can do that, will you not sell direct in this market?”
“It’s a complicated and explosive issue,” started fellow EGIA faculty member Gary Elekes. “There’s channel conflicts all the time. The manufacturer wants to sell units, the distributor wants to sell units to the retailer which is us. And the retailer wants to sell units to the consumer and the end user.”
Elekes explained that the value proposition of an HVAC contracting business remains the same regardless. While manufacturer-direct units can be purchased by customers at a lower price, the customer service, on-hands duct design process and overall value offering of your business should be enough to combat with the basic price objection from consumers.
Gary Elekes is serial entrepreneur with a passion for helping others become more successful by sharing what he has learned over the past 3 decades working closely with all facets of the contracting industry. During his career, Gary has held senior management positions at Lennox and Service Experts
Drew Cameron is America’s Most Sought-After Sales & Marketing Strategy and Success Advisor to Home Services Contractors and president of both FLOW Odyssey (formerly HVAC Sellutions) and Energy Design Systems, LLC: the premier industry alliance providing leading-edge technology along with complementary marketing and sales consultative support, recruiting, training, and coaching for performance and profit enhancement of Home Services Contactors.
Our faculty members have also answered questions on other topics related to system sales, including Training Service Techs in Customer Service and What Should Technicians Do Before Leaving a Service Call?.
Hear more from our “Ask The Experts” faculty members on “Cracking The Code,” our weekly web series.
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