How Flat Rate Pricing
Benefits 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 material pricing
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 somethinch it 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.g 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 rate pricing 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 mu
“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.
Not only does flat rate pricing
help solve many customer complaints but it helps retain technicians.
It is common knowledge that it is very difficult to find and
maintain quality technicians. In the “benefits to technician’s”
section in this book you will discover how technicians are happier
working for their flat rate pricing contractor and hence will not
quit. Technicians are also more likely to refer other like-minded
quality technicians to work for a flat rate contractor.
Another great benefit when using
flat rate pricing is the contractor knows their profit on each
repair sold. The contractor can also know how much annual profit
they will earn.
Note: Accu-Pricing™ comes all ready
set up to pay technicians by performance instead of hourly. Refer to
that section in this book for further information.
