Pricing jobs by parts and hours of labor is like throwing money out the window.
The cost of most parts in the plumbing, electrical and HVAC worlds are astonishingly low compared to the reliability, safety and health you provide to your customers. Many of your field service techs often get major repairs or replacements done relatively quickly, often within a couple or few hours. Compared to the immense utility and benefit being given, your company collects very little revenue.
You cannot just make up the discrepancy by stating an incredibly high hourly rate, as customers have a ballpark idea of what people charge out there. When your plumbing business charges the same hourly rate as a corporate attorney or top tier computer systems programmer, customers are going to walk away, be resentful or write horrible reviews on Yelp. You need to have a pricing method that makes good sense to the customer and reinforces to them (and to yourself) the considerable value proposition that you offer.
The pricing method that will bring in the revenues and profits you deserve is called flat rate pricing. However, when instituting a flat fee policy, it is easy to stumble on the various pitfalls that exist which will seriously harm your bottom line. The following guidelines are essential to maximizing your pricing policy to run a successful service business. Continue reading “7 Counter-Intuitive Ways To Use Flat Rate Pricing”→
Carol looked at me and said, “Just so you know, we’re getting 3 estimates before we make a decision.” Not to be outdone by his wife, Bob yelled, “Four estimates,” as he turned and walked into the other room. I thought to myself, I haven’t even taken off my shoes yet and this is what I get. I hate these multiple estimate tough calls. Just then Joe walked in the door and introduced himself. “Hi, I’m Joe Crisara, the quality control manager. How are you today, Carol?”
Carol gave Joe that same determined look and said, “I just want you to know that we have 3 estimates lined up this week and we won’t be making any decisions until we hear them all.”
“First, let me say thanks for calling us and for the opportunity to help you and your family with this issue. It’s a pleasure and an honor to be here today and it really means a lot to us that you chose our company to assist you. Carol, can I ask you a question?” “Of course,” Carol said.
“Carol, I really appreciate your honesty about getting 3 prices before making a decision. We don’t go out for dinner these days without seeing the different options available to us and the prices alongside them thanks to social media and sites like Yelp. They’ve changed the restaurant industry.”
Joe wasn’t phased a bit by Carol’s comment and immediately followed with, “We like to think that we are changing the way service contractors do business with homeowners like yourself as well. You said you are only going to get 3 estimates. Our company gives 6 estimates on every call, kind of like that insurance company where you name your own price. This way you have all the possibilities right in front of you at the same time. So why are you limiting yourself to only 3 estimates?”
Carol was a bit stunned and didn’t know what to say but was able to stumble out the words, “We are actually getting 4 estimates.” Joe just rolled with the punches, but I could tell he was wareing her out. “I understand Carol. I’m not trying to make you feel bad. It’s just that if I were to show you my 6 estimates instead of only 4, and you liked one of those options, what would happen next?” Continue reading “Selling On Tough Calls: Multiple Estimates”→
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It seems like one of those weird, counter-intuitive rules, but it’s true. Removing yourself emotionally from the outcome of a frustrating sales or service negotiation is the winning move when confronted with such a conundrum. You’ve probably been there- a wrenching, difficult interaction with someone at work. It could be a superior, an associate or a customer. Afterwards you felt exhausted and also had that electric “fight-or-flight” feeling. It’s not a good sensation, you don’t want this much drama in your life- and especially not at work.
When you feel like you’ve been through the emotional ringer after a work argument, it means that you grasped too tightly to the importance that you assigned to the result. It also means that you closed off your mind to listening to the other person’s point of view, even if it seemed totally incorrect or suspect at the outset. It seems like an impossible contradiction, but it’s not. You should care deeply about your work performance generally, but not care too much about the results of any one transaction.
It’s natural for us to mix our emotions into things that we invest out time and energy into. Even more so when those activities involve making a living and have an element of competition. The big winners in any field, however, learn to divorce themselves from the “scoreboard” as a measure of their value. They also stop seeing others’ actions as being personally against them.
A sales transaction can be emotional for the buyer, but it shouldn’t be for the seller- which is you. Train yourself not to care too much or become attached to the result of any given customer situation. Or even interactions with co-workers, suppliers or whomever. When you “need” a certain outcome too much, that desperation makes you appear as if you don’t really hold power and inarguable quality. Real quality never has to beg and scrape. Real quality can walk away today and will get more than enough jobs tomorrow. Buyers are attracted to that because people generally want to go with a winner.
ContractorSelling.com, a leader in online coaching and live training for service contractors, has partnered with Contractor Leadership LIVE to educate and inspire transformation in service businesses from all trades.
ContractorSelling.com, a leader in online coaching and live training for service contractors, and Contractor Leadership LIVE team up to educate and inspire transformation in service businesses from all trades.
Contractor Leadership LIVE will be held on September 12-14, 2017 in Cleveland, Ohio with the top industry experts to train professionals in the HVAC, plumbing and electrical trades. In one expansive gathering place, attendees will learn vital information concerning the economic outlook, current industry challenges, and explore new technologies. This three-day conference offers best practices from the premier trainers in the world renowned for helping contracting business owners pave their way to success.
ContractorSelling.com CEO and co-founder, Joe Crisara will provide a special keynote along with Rick Picard, the $7 Million Dollar HVAC Salesman, on “Pure Motive Pricing: The Art of Flat Rate 3.0” to educate contractors on the new protocol for pricing and technology in the service industry.
Time is the great equalizer. No matter how big your company is, time is a commodity that becomes very limiting in terms of the ability to be there when our best clients need us. Both large and small companies are basically “closed for business” once their schedules become saturated with opportunities.
Drinking From a Fire Hose
In the service industry, you have to be more than quick on your toes. Especially when calls are pouring in because of some extreme weather or other phenomena causing increased customer need. This tends to happen in the summer months when the weather is hot and many residential AC systems start to fail and need repair. The spring brings flooding season, accompanied by an influx of calls for plumbers. Additionally, electricians feel the rush to fix heating units before the holidays at the end of the year. No matter what industry you’re in, there will be a time when you can’t keep up.
Having enough opportunity can quench the thirst of going through a dry spell. But when it’s TOO busy, it’s like drinking from a fire hose. You can literally drown your company in too much opportunity and then pay the price in unpaid overtime expenses, employee burnout and unhappy loyal clients leading to the ultimate destruction of your business.
The System IS the Solution
To begin thinking about a “systematic” priority system, consider what’s needed as a version of emergency room triage. Just like a hospital, we need to make sure that the more urgent patients get service first, while taking into account whether the patient has the right provider that’s covered in their network. Plus, we’ve got to make sure that all the proper paperwork has been completed to secure the financial obligations that go along with an emergency service like that.