Have you ever wondered why most hvac contractors are leaving time and material pricing system for flat rate pricing model? You think it’s going to be tough and inappropriate to use a general system to estimate the price for a unique fix. This is why I will take my time to educate you about the pricing system.
This pricing system became known in the 1990s. The hvac industry had to make a shift to this system leaving the old “time and material” methods of estimating price. This shift in the method of payment for service has been growing, becoming not only among companies and technicians but also customers as well.
Furthermore, most customers are not aware of the benefit it offers to contractors. All they are concerned about it advantages: upfront price and a chance to be in control.
Advantages of Flat Rate Pricing
Today, many hvac contractors are making you of the pricing system to get more profit and increase efficiency. It is true what you have probably heard personal reasons why you should or shouldn’t make the switch, however, I will be discussing strong advantages of flat rate pricing for your business and customers.
Benefits to your business
First, it very easy for hvac contractors to increase the labor rates and material markup without having issues or argument with your customers. It also provides you with the way to earn more by calculating how long your technicians have to spend on a given job.
Secondly, it helps push your technicians to become more experienced and quick, since they have to complete the jobs faster so you can earn more.
A simple analogy to explain more flat rate pricing helps you save money is discussed below:
If you hired for a job which generally should take 3 hours to completely fix, and you have the hourly rate to be $20 per hour, then we can easily calculate our expected revenue to be 3 x $20 = $60.
However, if using the flat rate pricing system and you charge your customer $60 to get the same problem fixed. So, irrespective of the numbers of hours you spend it doesn’t change the price your customers have to pay. If you could get the job done less than 3 hours then you have actually earned more.
You can also view other examples on flat rate pricing.
This is only possible if you have your technicians skilled and quick.
Benefit to the customers
Most time when customers and contractors fight, it mainly because customers have no idea they would be charge that high for the problem. This is what flat rate pricing helps you avoid incident such as that. After making a proper diagnosis of the problem, then you can give your customers an estimated price upfront.
Sometimes customers believe that up are taking more time just to get more money, this makes them furious and reluctant to make payment for the service you have rendered. However, once they are fully aware of the generally estimated hours it takes to get such a problem fixed, they rather appreciate your service than feel jilted.
Get Start with Flat Rate Pricing Model
Flat rate software companies now provide you with all the help necessary to get started. They also guide you so you are conversant with how to estimate price for any giving job you are hired to do, and perform any more tasks.
Most of these software companies are always up to date on the latest changes in the hvac industry. They keep up with customers pay for services and how to bill them justly and profitable for you.
In addition, you can also make use of your flat rate pricebook which is beneficial to you than software companies who will use over a thousand pricebook to cover all type of services. Using your pricebook gives you an edge since you know the control pricing for your area better than any flat rate software companies. This is crucial if you think using a generic software might put you of your market.
Alternatively, using an existing flat rate pricing package saves you a lot of time and stress while you import the data to customize your own pricing system.
Conclusively, you need to decide what is best for you and your company. A service that is hassle-free, profitable and easy to customize – flat rate pricing system.