Flat Rate pricing for Contractors
If you have been a contractor for a while you are familiar with the following kinds of customer complaints:
“You charge too much.” When you as a contractor charge by the hour, most customers think you charge too much. They see the enormous (in their view) hourly rate you charge and think you are getting rich off of them. This is understandable that they would think this way. Even if you charged only $70 per hour they may earn only $25 an hour at their job. They have no idea what it cost to run a business and hence think you overcharge them. If you use flat rate pricing instead of time and materialpricing they do not know how much per hour you are charging them because your hourly labor rate is not revealed. This is not dishonest on the contractor’s part. Almost every purchase a consumer makes does not reveal a break down on a seller’s costs of doing business.
“I don’t have the money to pay now.” When a customer doesn't know how much some thing costs for the contractor to bring that thermostat to their home on your truck. With flat rate repair pricing the customer does not know how much you charge for the thermostat because it is included in the flat rate price is going to cost in advance, many times they do not know if they have enough financial resources to pay for a repair when it is completed. When using flat rate pricing a customer knows up front how much a repair is and that the full payment is due upon completion if that is what your company policies are. In summary; flat ratepricing helps to lower collection problems.
“The parts cost too much.” If a customer was at a retail store and saw a thermostat being sold at $35 and you charged them $70 for the same thermostat many customers would think you are overcharging them. Most customers have no idea how much the part is.
“The technician took too long to do the job.” When a customer is being charged by the hour instead of a flat rate customers take notice of the technicians productivity. They notice a technician taking a smoking break, a bathroom break, a telephone break, a break to read a schematic or instruction manual and see it as time they are paying for. If the repair is difficult to diagnose and hence takes longer than a customer thinks it should, then they think they are paying for a technician’s training. The customer is correct in thinking this way and doesn’t want to pay for such things. Flat rate pricing eliminates these problems and the longer a repair takes the better the deal in the customer’s eyes.
“The technician charged me for picking up parts.” Most customers don’t like paying for the technician’s labor for picking up parts. A good flat rate pricing system like Accu-Pricing™ solves this problem by having the technician show the price up front for the repair including labor to pick up any parts required.
“My neighbor paid less than me for the same repair.” Flat rate pricing by its very nature insures that everyone pays the same price for the same repair. These are just some of the customer complaints that Accu-Pricing™ solves.
Remember most dissatisfied customers never complain to the contractor but just quit doing business with the contractor.
