Chances Are You’re Not Charging Enough
By Tom Talbot, Digital Content Specialist
Think about this… the average hourly billing rate for our Coolfront® Service Price Guide Book customers is $61 dollar per hour HIGHER than our mobile customers. And the overtime rate is $79 higher. That’s a ginormous difference in pricing strategy, considering they’re basically the same size companies providing the same services in the same cities and towns.
Makes you itchy to bump up your rates, huh? No? Well here’s the deal: you probably could (and should) be charging more money for your service. How do we know this? For close to 20 years, we have been a leader in the flat rate business model. We have seen lots of customers successfully use our service price guide to raise their rates resulting in growth as indicated by their increase in flat rate book subscriptions.
Our book product and mobile products are basically the same (one’s paper, one’s digital). One big difference though has to do with how often billing rates are reviewed. For Coolfront Books we consult with the contractor before we print and ship their service price guide. As a result we recommend a rate increase from the start. Coolfront Mobile is self-sign up with no upfront consultation. So, pricing strategy is left up to the customer to set during sign up. Mobile customers aren’t pushed to increase their rates, so they usually keep them as is.
Plus, we encourage our book customers to print new service price guides every year and raise their hourly rates at the time of printing. Mobile customers are free to change their hourly pricing strategy any time they choose. We don’t typically push their rates so guess what? They keep them steady.
I can tell you this: mobile customers can probably bump their rate by $15 today and get little or no pushback from customers tomorrow. So go ahead and raise your rates.
Changing your pricing strategy always comes with some hesitation. You are not sure how your customers will react. Understandable. To cover your costs and overhead, and make a decent profit, you have to charge the right price—whatever that is. If you’re not completely convinced try this: raise your rates for one tech in your company and look at the numbers and the complaints in a month or so. I’m betting that you won’t see much difference in how your customers react. Most of them probably won’t even notice the change in the price because it isn’t that significant to them.
How much does raising your rates by $15 per hour affect you and your company’s bottom line? Let’s take an average tech who runs one thousand calls per year, at one hour per call. That’s an extra $15,000 per year—for each tech. That’s a big change. And it really comes with little effort on your part. Change your pricing strategy and see what happens. You’ll be glad you did. Don’t forget that you are in business to make a profit, so don’t hesitate to increase your chances at success.