Flat Rate Folly At The Garage

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    By Tom Talbot

    Tom T

    Flat Rate for Auto Mechanics?

    In the “grueling world” of creating content I took a break from the assembly line of wordsmithing and heard one of our sales guys talking to his mechanic on the phone. Is there anything worse than taking that call from the garage concerning your car troubles? I know a little about cars but let’s be honest--they could tell me anything and I would say “OK--the ball joint and wheel bearing you say? Sure that sounds like $800--go ahead and do it.” But the conversation I had with our sales guy got me thinking.

    Our sales guy Sean makes his living selling Coolfront flat rate pricing. He also knows quite a bit about cars and figured the job was going to cost him $400. He was willing to pay $400. That’s all the mechanic would have had to say was--the price for XYZ is $400. Done.

    But that’s not what he said. Instead he quoted him time and materials rather than the flat rate price of $400. “The part,” Mr Mechanic said “is $180, and the labor is $220.” As I said Sean is pretty car savvy and so he did what any logical broke person would do--ho looked up the part and found it only cost $80. Now wait a minute.

    He couldn’t go ahead with  it. Why? He knew he could just go purchase the part, do it himself and pocket the extra $100. He even said if the guy had just quoted him $400 he was all in. That’s the beauty of flat rate pricing.

    Some HVAC contractors are still losing potential customers using this same outdated pricing strategy. They will quote the parts price and the labor and the customer will pause. First they think the hourly rate is ridiculous. $150 an hour to work on my air conditioner? Is this guy a lawyer? Then they Google the parts. If they do go forward with the job they are watching the tech like a hawk to make sure he doesn’t go over the quoted time. The whole process in complicated and frustrating. When customers have their furnace or air conditioner bite the dust they only have two questions: What’s wrong? And, How much? Flat rate pricing answers the question right away and customers prefer the upfront price.

    Why do many auto mechanics still quote you a time and materials price when your car needs work? That’s a good question. Many have converted to a flat rate system. It cost the mechanic a $400 job this time. It also cost my sales buddy a Saturday afternoon to save his hundred bucks.

     

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