Diagnostic Fees
If you are using time and materials pricing now you are probably charging a “service call” fee to have your technician go out to a job with your truck and tools. Then you are charging an hourly rate to do the repairs needed. You of course explain this to the customer when they call and they are never happy to pay your technician for driving out to their home or business. You can’t blame them for thinking that way because they do not get paid themselves for driving to work. Most of them however don’t complain even though they don’t like paying for travel time.
Flat rate pricing usually works a little different than time and material pricing. One thing nice about using flat rate pricing, is that it adapts to many different ways of running your business so the contractor can be more able to meet local market conditions.The following are some ways that flat rate pricing is commonly used.
Typically the service call fee or ½ hour diagnostic fee is included in the first repair task that is being done. If more than one repair task is being done the additional tasks do not include the travel time fee because it was paid for in the first repair task. When a customer calls for service they are told there is a diagnostic fee of X amount of dollars to troubleshoot the system.
Some contractors do not like to use the term diagnostic fee because some customers will say “I already know what I need done so why should I pay a diagnostic fee.”
Some contractors will call it an initial inspection fee or a service ordering fee or a minimum ticket fee or by some other name. After the technician has diagnosed the customer’s problem, they show the repair price in the pricebook and get the customer’s approval before the repair is done. In the rare event the customer doesn’t immediately approve the repair the technician collects the diagnostic fee and goes to his next service call.
How much should you charge for the diagnostic fee? The lower your fee the more customers will choose you to do business with. Some technicians are so experienced that they could afford to go out to a customer’s house for free because they could diagnose 99% of problems in less than 15 minutes. They could then talk the majority of customers into going ahead with the repairs. The free diagnostic fee would be recouped in the repair selling price.
The lower your diagnostic price the more “cheapskates” you will run into. These are probably people you don’t want for customers. The higher your diagnostic fee the more you weed out the cheapskates however the fewer the new customers you will get.
Contractors need to experiment with a happy medium to discover what works best for them.Some contractors will have a lower diagnostic fee when they are slow and need more business. When they are very busy with work they increase their diagnostic fees. Some contractors will offer different levels of service like standard or premium. The premium service costs more but includes service within a certain time period such as one hour, two hours, same day etc.
