Good Money After Bad
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”