Your service technician was just out here and I can’t believe you charge so much per hour for service. Who makes that much in an hour? You’re service company is a rip-off.
Have you ever taken a call like that? I know I have.
In the service repair and maintenance business (like HVAC, plumbing, electrical, and other repair), people will always compare your hourly rate with their hourly pay. The two sound alike but have nothing to do with each other. You’ll never explain that to a customer though. They’ll always see you as a rip-off. Unless you flat rate . . .
Flat rate pricing is simply offering to do a job (of any kind) for a fixed price. You are using flat rate pricing each time you write a sales proposal or make a verbal “estimate”. People expect to be told “how much” before any work is ever started.
The reason you can charge more is that the price is offered as a “package”; one price for everything. This is the same concept used when you write up a sales proposal. If a repair usually costs $200 to $250, you will charge $250 every time. That way you benefit from being fast.
The reason why customers like it better is because the one question all buyers want to know is “how much?” If you can’t give them a firm answer, until your work is done, they’re going to be mad at you.
The reason why technicians like it is because they don’t have to explain your hourly rates and parts prices.
The bottom line is this: customers will always unfairly compare your hourly rate to their hourly wage. They’ll see you as a price gouger because they don’t understand you must charge many times their hourly wage to cover your overhead and stay in business. Flat rate pricing eliminates all discussions related to your hourly rate because you will be charging by the job.
Since 1996, I have been selling software that allows you to print precise flat rate books in about one hour. It’s called Flat Rate Plus® and it may be the most popular flat rate software in America (see www.aptora.com). FRP® uses national average parts pricing. The labor times are the result of many years of research. You decide how much to charge; FRP just makes creating books super easy. Everything is ready to go; right out of the box. You just answer thirteen questions and hit the print button. There is even a DVD included to train your techs and office staff.