![]() ![]() ![]() You can still quote an hourly rate for certain diagnostics and repairs. You don’t have to use flat-rate pricing 100 percent of the time. Flat-rate pricing is no excuse to charge more than what your company is worth. Some Flat-Rate Fallacies Contrary to what some might suggest, flat-rate pricing is neither unfair to the consumer or a guarantee of success. ![]() You can sometimes outsmart the competition, but you can never “out dumb” them. Stop allowing the public to compare your hourly rate to that of your most ignorant competitor. It’s impossible to provide high-quality parts, trained personnel, and excellent service, 24 hours per day and still be cheap. In fact, many large cities actually require cabs to provide guaranteed flat-rate pricing to major destinations. And the taxi driver expects a tip! How can they get away with those rates? Simple - they don’t charge by the hour. Taxicabs routinely bill out well over $110 per hour and the cost of operating a taxicab doesn’t even compare to a $25,000 “hardware store on wheels” driven by a tech who is almost impossible to replace. You see, someone will always be cheaper and customers often do not know what else to ask about except price. No one ever got rich being paid by the hour.Īnother reason to flat rate is so you can charge what you are worth (and only what you are worth) and not be unfairly compared to an ignorant competitor that is cheaper. No matter how good you get, that limit still exists. When you bid a job, you have a chance to make a decent living when you do a quality, efficient job. Flat rate rewards the efficient and penalizes the inefficient.ĭo you make more money on T&M pricing or do you do better on bid work? You may have noticed that when you must do a job on T&M, your profits are limited. The faster they get, the fewer hours they bill on each call. The better they get, the more you pay them. Have you ever noticed that your fastest techs bill out the least amount of money and enjoy the highest hourly rates? We call this the “backward equation.” You hire a tech, train them, supply them with tools and equipment, and they get good and fast. Increased Profits Another important reason to use flat-rate pricing is to allow your company to benefit from fast, efficient repair work. Have you ever noticed that most of your complaints come from invoices that were filled out after the tech left the jobsite? Very few people complain about invoices they have already paid! When you quote out of the book, the math is already done, proper spelling is right in front of you, and the customer is assured that he or she is paying the same price everyone else is paying.Ĭollections are a breeze. Having full control, customers can decide what they want done and offer their approval. With flat-rate pricing, your technician explains the options to the customer and quotes a firm price up front. He just quoted them a price of $200, and the customer is timing his every move. Under pressure, your technicians offer the customer a range, perhaps $200 to $300. Customers are nervous of financial situations that are out of their control, so they demand that your techs give them a guaranteed price. The question is “How much?” Technicians attempt to explain their company’s charges using the old time and material song and dance and they look unprofessional at best. Each time you explain to a customer what needs to be fixed, you are interrupted with one question. ![]()
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