Flat Rate Pricing Can Improve Profitability For Your Service Business

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    By Derek Richardson


    It’s time. Are you struggling to turn a profit although your service volume has increased over time? Is your company making adjustments to the hourly rates charged at the time of service, or worse yet, after the service work has been completed? And, do you have consistent pricing for the same repair regardless of which of your technicians completes the repair?

    If you’re like many service companies and haven’t been able to answer these questions favorably, then it’s time to seriously consider a flat rate pricing approach versus an hourly pricing approach because property owners prefer it and you deserve to run a fair, profitable business.

    Flat rate means the price for a typical service repair under standard conditions remains at a consistent rate regardless of time or the technician completing the work. Flat rate pricing blends your labor rate into the overall price of the repair, and it’s not directly known to your customer upfront, only a total price customers can count on when the work is complete. Remember, you’re in the business of providing value to your customer base, not providing the least expensive prices on the market.

    Especially since 91% of American homeowners prefer to know the price upfront.*

    *Research Performed by Decision Analyst

    Now here’s the fun part! Check out the profitability increase you can capture by raising your labor rate. I’d recommend starting with a $15-$30 increase. Surprisingly, the final price presented to the customer does not change drastically even if raising the labor as much as $30.

    For example; An HVAC Contractor increasing their labor rate by $30 will only increase a typical Induced Draft Motor repair by $21! You’ll find customers don’t complain about such an increase, especially if it is presented upfront and in print. 

    It’s important to understand, especially when you’re just getting started, flat rate service pricing is not a set-it-and-forget-it concept. You’re still the boss and fully in control of your pricing. The goal here is to routinely cover your costs and collect a fair marginal profit. A 10-15% net profit will allow you to take a reasonable salary and allow you to re-invest in your business with new trucks, equipment and staff training.

    What if your technicians had a list of repairs giving them a consistent price for an appropriate repair, right at their fingertips, on the go? Coolfront Mobile gives service technicians a database with thousands of repairs accessed through their mobile devices calculated with your labor rates and part markups to assure techs never have any doubt how they should be pricing their services and your business is assured a profit.

    Undoubtedly, Coolfront Mobile is the most affordable way for you to get started with making the switch to flat rate pricing. Our team is dedicated to being your sidekick, making sure you’ll get it right along the way. We’re in the business of helping you create the better future you and your family deserve.

    If you’re new to the flat rate service pricing concept, I’d suggest beginning to familiarize yourself by viewing this video on Coolfront Mobile’s flat rate: 




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