How Valuable Is Your Service?

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    By Jim D'Amico


    Many Don’t “Get it!”

    Through the years, I have had hundreds, maybe even thousands of discussions with service companies about service rates.  And, I have always been puzzled by the lack of understanding by service business owners about the value they provide their customers.  Even more concerning is the reluctance they have regarding raising service rates to a level that allows for covering expenses and turning a reasonable profit.

    But rather than writing a dissertation about the efficiency of field personnel and non-productive, non-billable time, (I have written about that over and over) I would rather discuss the value of your service as it relates to another profession...the legal profession.

    What About Lawyers’ Rates

    For the record, I won’t be bashing lawyers here.  I believe that we need lawyers to assure that our interests are protected in personal, business and civic matters.  I also believe that a few unscrupulous lawyers give the entire profession a bad name. Besides, my older brother Ed is an attorney, and he has always been great to me and my family.

    My focus here is on value and how the value provided service companies involved in the trades is not only intertwined but imperative  to the service provided by others.

    But first, some facts.  Researching the legal profession on the internet brought me to an article written by Jay Reeves of Lawyers Mutual, an insurance company that educates and insures lawyers against claims surrounding professional liability.

    In his article, “Top 10 Lawyer Hourly Rates by City,” Reeves provides the following:

    “Don’t mess with Texas when it comes to hourly rates. Law firms in the Longhorn State – mostly big firms that represent corporations – are hiking their rates as much as 10 percent, with dozens of firms smashing the $1,000 per hour threshold."

    “Scores of Texas lawyers now charge $1,000 or more per hour for their legal services,” reports the Houston Chronicle. “Another 200 business attorneys in the state are likely to cross the $1,000-an-hour threshold over the next three years. Businesses across Texas received letters during the past few weeks from the law firms that represent them delivering news of the higher rates.”

    Nationally, rates are rising as well. Here are the Top 10 average rates by city:

    1. New York City $344
    2. Los Angeles $324
    3. Chicago $312
    4. Miami $310
    5. Washington DC $304
    6. Dallas $300
    7. Atlanta $293
    8. Boston $278
    9. Houston $276
    10. Philadelphia $245…”

    Now if your like the typical wage earner in America you probably said, “Whaaaat!...$1,000 per hour!

    From my own experience, ten years ago, I had a discussion with an attorney in Dallas and he quoted his hourly rate at $695 per hour.  So, I do believe what Jay Reeves has shared.

    Us and Them

    The point of my discussion is twofold.

    1. To open the eyes of HVAC, Plumbing and Electrical service companies to what is happening in other professions, and,
    2. To ask this question.  “How well will a lawyer perform his/her services if he or she has no heating or air conditioning, a stopped-up plumbing system and no electrical service?”

    Obviously, the answer to the questioned posed above is, “Your lawyer won’t perform well without the vital services that keep him/her comfortable, healthy and safe.”

    The bigger question is, “How can a lawyer charge $300, $600 or even $1,000 per hour?  Remember, the client has to go to the lawyer. Yet, a service company places a trained technician in an expensive service van, equipped with tools and parts valued at tens of thousands of dollars to make a house call and then charges hundreds of dollars per hour less than the lawyer who sat in a comfortable office. Does that make sense?”

    It doesn’t add up in my book.  Again, I’m not bashing attorneys here.  I’m questioning the thought process of service company owners involved in the trades.

    Education, Experience and Value Matters for Everyone

    Now if one wants to use the argument that attorneys have advanced college degrees, that fact carries only a little weight with me.  A good, technician, plumber or electrician has likely attended trade school and then spent a least 4-6 years working in the field to be really valuable to employers and their customers.

    If a service business owner argues, “Lawyers can get that kind of money, we can’t!”  I question the validity of that argument.

    In my opinion, there are six factors that stand in the way of charging a comparable fee with other professions:

    • Self Esteem
    • Confidence
    • Customer Perceived Value
    • Education of the Customer
    • Professionalism
    • Recognition of Value

    Of the six above, perhaps the most important factor is Recognition of Value.

    Recognize Your Value

    One must understand the value that customer receives in order to justify higher rates.

    When the value that a service company provides is recognized by the company owner and employees, only then can the customer be educated to become accepting of higher rates.

    Change your pricing strategy and increase service rates by using Flat Rate Pricing

    Increasing rates without a negative reaction from customers is much easier if one subscribes to flat rate pricing and then uses flat rate pricing on every service call and repair.

    For more information on flat rate pricing, mobile dispatch and maintenance agreements visit


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