ECN Forum Forums General Topics of the Trade Business Related Discussion Flat Rate Pricing vs. T&M

LK,

I like your way of handling this. That is probably the way the tv repairman would have handled it if it would have taken him longer than expected to diagnose.

A-Line,
There is no secret to it, the auto repair industry has been operating this way with sucess for years, why try to re-invent the system if it works, there are many, we will show you how to suceed companies out there, and they are using tried and tested methods of operating, but none of this will work unless you apply them to your business.

And the auto repair shop, does not come to you, we have to support a truck along with all it's expenses, including a trained techinical person, so before we get there the meter is running.

So the guy charging a higher rate for service work knows all his expenses, no dart board or what is the area getting misinformation.

LK,

I was in the auto industry before. Some places didn't charge to "look at things". They would pull the car in. Figure out sometimes shortly what the problem is. Price it out. Then the customer says that's what it needs and does it him self. Shop makes $0. The mechanic did not want to spend much time to conferm the suspect part is the cause so the wrong things got repaired. So then they went to a dignostic fee to look at it which included the first hour of dignosis and customers were told most things are descovered in the hour. It it took 2 hours they were never charge more. But if was a big mystery then the customer is called and told something like "There is a problem with this system. It could be a bad this, this, or a bad connection. We need more dignostic time and $200 to find the cause and get you a repair estomate." The customer allways went for it cause they were allready $80 into it. After that they still fix it for more $ cause they got $280 into it.

I sould do that with my customers.

Not exactly a good way to keep customers though. The referrals would go through the window in my opinion. Drives me crazy when people do that to me.

LK,

Maybe I did not explain it well enough. I thought I was agreeing with you about maybe charging a dignostic fee. Also I'm saying once you are there you probibly have the repair work.

A shop would charge a standard dignostic fee included in that was a list of tests and up too 1 hour time. Even if it took a few hours to find the problem nothing more would be charged. Once in a while you have a nightmare vehicle. What makes cars difficult is because of movement, vibration, tempitures, and the lower voltages the problems can be very intermitant. It can take a lot time for a problem to act up before anthing will test bad. For these cases the customer would have to be called to get more $. Dignostic laber was never the money maker. The money is in the repairs. The customers never seemed to have a problem with this. If your asking where I worked I can give a long list of dealers and independant shops.

I can't say that is how every place does it. I'm willing to bet if you called some shops and said my car stalls sometimes on cold days how much to fix they would give you one number but they will not look at it all day or longer for that number.

Tom

This topic and others on this new forum are making me rethink entirely how I am doing things. Thanks to you (electrical)veterans.

LK,
How would you diagnostic quote a call like this: "I have some lights not working in my foyer. There was a lightning strike in the driveway and it hasn't worked since. Then while your here, I'd like you to look at some other things too, a doorbell and a door buzzer, and some other things when you get here"

Do you insist on an itemized list before you dispatch? Then what happens when you get there and they still remember "this" or "that"? Is it $139 for each item?

The more I read these and think about it the more I agree with these ideas. I think I used to bid T&M out of laziness. I just didn't want to think through the job, or I was too busy to think through it. Recently, with this and other posts in mind I have been quoting everything. donr pretty well. The key is to not quote too low, and not be afraid of them saying I'm too expensive.

LK,

Sounds like you have been using flat rate pricing successfuly for quite some time. I just started using it about 3 months ago. So far it has been working out much better than T&M. I still have a lot to learn about using it properly. My prices are in a book that I show my customer. They see the price right in the book making it an easier sale. Do you show the customer the price in a book? If you do how would you add the extra diagnostic charges to the repair price listed in the book. Seems you would not be able to show them the price in the book.

Thanks

Okay, what about this scenario:

You are called to troubleshoot, and it takes a few hours. You open every box. You find something very simple to fix like a broken wire or bad splice. To “fix” the problem is no more than a minute. Do you quote to repair it at a price then that covers your extra time that it took to find the problem?

Does this diagnostic fee only apply to resi work? An industrial machine could take a lot longer and require changing certain parts to really narrow done the problem.

Okay, another case: “I have a new two story foyer fixture I’d like you to install. Also I have a fixture lift to install as well. How much?” We just told them T&M. from our experience these lifts require a dedicated circuit, and we didn’t know what it would take to get it up to the second floor. How would you flat rate this? Les, do use actuals instead of a book, or combination of the two? A-line, where do you get this book you use?

A-Line,

Our price book has two level pricing, on a service call that requires more trouble time we use level 2 pricing, your price guide should show you this method, it recovers the additional time.

I use Flat Rate Plus software. It can be purchased at www.flatratesystems.com It costs $2,500 and you print your books from the software. It is geared for the residential and light commercial market. I haven't used it for industrial machinery. You could create a new catagory in the software for industrial machinery. The software lets you choose what you want included in the book when you print it so you could print a seperate book with just the insustrial machinery catagory in it.

LK,
What flat rate system are you using?