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Flat Rate Pricing and HVACR Repairs Part 1

Flat rate pricing for HVACR repairs is good for eveybody. And, I do mean everybody: The customer, the service technician, the service company, and the HVACR industry as a whole. Why am I so sure that this is true? I’ll explain…..

Beginning with the customer…. flat rate pricing is a good thing because it means that the customer will never wind up paying for inexperience or incompetence. If a service company is operating on a time and materials system, and the technician is experienced and competent, that’s one thing. But, if the technician is not experienced in a particular repair and takes and takes 90 minutes to accomplish it rather than 30 minutes it would take for an experienced technician to complete that repair, then the customer is not being treated fairly, simply by luck of the draw. However, when a flat rate price for the repair has been established in accordance with the amount of time it would take for a journeyman level technician to complete it, then it doesn’t cost the customer more money if an inexperienced technician who has not yet developed the skills necessary to complete a given repair in the same manner as a journeyman is the one accomplishing the task.

And, the fact of the matter is, when a customer calls on a professional to provide a service, they expect (and are entitled to) nothing less than journeyman level competence.

When people hire a doctor, lawyer, accountant, or dentist, they don’t expect to be dealing with some one who won’t know everything they need to know about medical care, the law, finance and taxes, or teeth, in order to do the absolute best job they can do for their client. And when people hire a technician to troubleshoot and repair their air conditioner or furnace, it’ s no different. They’re hiring a professional, and they expect to get the same level of performance from any professional they hire.

Moving on to the the technician….Flat rate pricing is better for them than a time and materials system because it takes the pressure off then in regard to the job pricing issue, allowing them to concentrate on their job, which is to get the customer’s equipment back on-line. The very nature of a flat rate pricing system lets the technician simply diagnose the problem, then advise the customer as to the total cost of the repair as shown in a flat rate price guide. One of the undeniable facts about many technicians is that they have a tough time understanding the value of the service they provide, and quoting a flat rate price for a repair is more comfortable for them than calculatng what the final price for a repair will be via the time and materials route.

The more experienced a technician becomes, the more uncomfortable they are in pricing their expertise fairly. It’s just too easy for them to forget the amount of effort, practice, and time they invested in becoming an expert in their field, and when they have figured out how to do something in an extremely short period of time, they only see the minutes it takes to do the work. And the end result of this is underpricing a repair.

Which brings me to the contractor, and the obvious benefit to them….revenue. With the revenue generated from a fair and  professional rate for the repairs their company performs for its customers, they are afforded the opportunity to operate their business successfully; covering their expenses and earning a reasonable and deserved profit.

And, the reason this is good for the entire industry is fundamental…..with contractors able to cover their expenses and earn a fair profit, they can offer technicians a higher rate of compensation and benefits, which serves to attact more young and quality people to pursue the HVACR craft.

Until next week….

Learn from yesterday…..Live for today…..Look forward to tomorrow.