start making money in 2011 using flat rate pricing …..a key to contractor profitability. mike...
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Start Making Money in 2011 using Flat Rate Pricing
…..a key to contractor profitability.
Mike Hajduk, President
Jeremy Lowe, Database Administrator
CALLAHAN ROACH and
dESCO
Long Relationship – dating back to the early 1990’s
Flexibility of flat rate usage. Books or mobile.
It works!
Who is Callahan Roach Business Solutions?
Started flat rate in HVAC in 1989.
Segment leader.
Sold over 5,000 dealers CAP™ flat rate.
Trained hundreds of contractors.
Who is Callahan Roach Business Solutions?
Consulted with industries largest and most successful dealers.
Recognized as having the most robust database of flat rate repairs.
Serves 3 industries.
Why flat rate as a linchpin?
91% of all American homeowners want to have their service company offer flat rate.
25% of service companies go out of business each year…
Low Net Margins should not be fixed by beating up suppliers about pricing.
Many HVAC contractors set their service prices to lose money.
…Pricing errors are easy to fix with flat rate.
So what is flat rate pricing?
Flat rate pricing is the technician offering the customer a no surprises single price to make repairs on their HVAC system, before the job is started.
What we know it is:Way to get enough for your labor and parts to make a profit
Allows you to take the focus AWAY from your price and place it on your SERVICE and company QUALITY
Show the customer that you have the capability to repair and install complex systems
Matt Michel’s“The Power of Positive Pricing”
Published by ServiceNationPress.com
Flat Rate Myths
Matt’s Flat Rate Myths
Flat “Rape” Myth
Technician Resistance Myth
The “Perfection” Myth
The “One Long Job” Myth
The “I can do it better myself” Myth
Theatrics
It is a tool to show that your company is head and shoulders better than the competition.
Merchandising of Your Service
You compete with Macy’s, Kroger, Target etc., for your customer’s “eye”.
How to Merchandise your Company
Uniforms
Work Orders
Booties, drop cloths, cleaning work area
Flat Rate Manual or Mobile Device
Pictures of equipment and/or parts
Your Truck
Building Value in Service Invoices
Database Administrator, Technical Training, CTO, etc, etc, etc.
Jeremy Lowe
Highlights
1. What the customer wants and perceives as value.
2. What an improperly completed invoice is.
3. What a correctly completed invoice looks like, why it is important, and how a properly completed invoice builds value
4. How to explain multiple repairs so that a customer understands the need to invest in their equipment now rather than later.
Service Tickets
All Service Companies Need To Increase The Dollar Revenue Of Their Service Tickets to Remain in Business
No Company Wants To “Gouge” Consumers Or “Take Advantage” Of Them
Many Consumers Need Multiple Repairs Yet We Fear The Price May Scare Them Away
How Do We Deal With Customers That Have Want
The Cheapest Price?
Repair Under the Diagnostic ?
It Is a Diagnostic Only Charge
We Are Not Giving The Customer a Break
We Are However Breaking the Company!
Bad Mojo
WHY CHARGE SO MUCH?
Running a business is EXPENSIVE!Labor drives overhead thus unapplied time
means we must charge moreOther hidden expenses must be covered
so our company makes a profitNo profit, no jobs!List cost of business.......
Other Expenses
Insurance For Employees
Business Insurance
RentUtilitiesAdvertisingTrainingWorkers
Compensation
ConsumablesToolsCommunicationsTaxesFuelLicensesWarrantiesEmployee Benefits
DIAGNOSTICS
Not a profit centerA charge customers understand if
explained properlyCan’t make repairs under this chargeDoes not cover the expense of getting you
to the door!Devalues our service if we make repairs as
part of diagnostics
DIAGNOSTICSHigh liability when we “Diagnose”Always finish a diagnosticYou touch it you bought it!Failure to do so is a liabilityFailure to do so is costing you
customersFailure to do so can be laziness!
How Do We Deal With Customers That Have Multiple Problems
When We Do The Diagnostic, But Only Want The Cheapest Price?
We Must Understand What Customers
Really Want!
Understand Your Customer
“I Want A Fair Price!”
“I Want To Trust My Repair Company!”
“I Want It Repaired Right The First Time!”
“I Want To Understand What My Servicer Is Doing To My Home”
All People WantBasic Human NeedTime Is Valuable
and Multiple Repairs May Indicate Inexperience
Consumers Fear What they Do Not Understand And Can’t Explain Well To Others
Flat Rate Service Pricing
• Giving Customers a Fair Price that is in Black & White From a Printed Book
• Customers Feel They Can Trust a Servicer Who is Thorough
• Doing a Complete Diagnostic Allows us to Recommend all the Repairs Up Front
• Using Tear Off Pads and Detail on our Invoices Builds Trust in us and the Company!
Flat Rate Builds Trust And If Used Properly Reduces Post Shopping Complaints
About Price
Neat And Thoroughly Completed Service Tickets With
Good Diagnostic Procedures Reduce Callbacks And Increases
Consumers Understanding Of Recommended Repairs
Perceived Value
What Value Does Your Diagnostic Hold?
Understand Your Customer
“I Want A Fair Price!”
“I Want To Trust My Repair Company!”
“I Want It Repaired Right The First Time!”
“I Want To Understand What My Servicer Is Doing To My Home”
All People WantBasic Human NeedTime Is Valuable
and Multiple Repairs May Indicate Inexperience
Consumers Fear What they Do Not Understand And Can’t Explain Well To Others
A Service Scenario
Bad start Capacitor on motorLeaking service valve capSafety is by passedNeeds refrigerantOld mercury thermostatContactor seriously pitted
What to Do?
Always recommend all legitimate repairsLet the customer decide what they
want to doGive your professional opinion if askedDO NOT REPAIR ANYTHING AS PART
OF A DIAGNOSTIC!!!Offer discounts on multiple repairs
Observe!
Leaving an item that “Still Works” but is obviously going to fail or is broken is bad business
It is not what customers want even if we feel we are “saving” them money by encouraging the unit to RUN TO FAIL.
When A Customer Understands The Value Of Making Multiple Service Repairs At One Time
They Will Make The Investment In Their Home Heating System
Did The Customer Perceive Any Value In The
Diagnostic Procedure?
TECHNICIANS PERCEPTIONS
Not Enough Time!“I can’t do a good diagnostic because the
office gives me way too many calls!”“There is way too much stuff to check!”“We have no where to mark what we
check on our invoices!”
A Completed Service Ticket and a Thorough
Evaluation Reduces Complaints
To Build Value
TAKE the time to lookBe thoroughShow the customer the price in your
book.Look for predictive repairsLook for preventative repairsBe prepared to suggest upgradesUnderstand what customers want!
What Does The Customer See?
Summary Explanation
Bad Capacitor2 Pole Contactor1 Lb R22Tighten FittingO- RingDiagnostic
Total
$118.00$102.00 $29.00 $24.00 $16.00$209.85
$498.85
$118.00 $92.00 $26.00 $22.00 $0.00 $69.95
$327.95
$100.00 $78.00 $22.00 $18.00 $0.00 $69.95
$287.95
What Does The Customer See?
$498 expense verses a $287 investment with an agreement
Perceived Value
For A Small Investment Now The Customer Has Peace Of Mind For The Future
They Can Enjoy Their System With True Peace of Mind
Being Preventative Reduces Future Expenses Leaving More Money In Their Pockets In The Future For Other Uses
Perceived Value
What Do You See?
Value building starts at the door!
Perception
What is the customers perception of you?
The Company?The service the received?The value?
PERCEPTIONS
People make multiple assumptions about us in the first few seconds!
We either prove their assumptions right or wrong
Visual clues are important to perception as is voice and tone
Perceptions can be changed!
Make What They See Valuable!
Questions and discussion regarding our alliance?
Desco – Callahan Roach worksFlat rate as a merchandising toolThorough DiagnosticsBe proactive with recommendationsComplete and neat work ordersValue building starts at the doorContact us for consultation1-800-528-0212
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