Everybody wins with flat rate pricing.
When it comes to HVAC, electrical, or plumbing repairs, homeowners want fair, professional service. Contractors on the other hand, want a tension-free, profitable day on the job. So, how does everyone win? Flat rate pricing.
Flat rate pricing – A.K.A. upfront pricing – rolls the cost of the tech’s hourly rate and cost of parts together into one price that’s presented to the homeowner before any work begins. It’s a tried-and-true pricing model that’s been around for decades, but many people don’t realize that both contractors AND homeowners prefer flat rate over time and materials pricing. Don’t believe us? Consider the following:
Why Homeowners Love It:
#1: There’s no surprises
For homeowners, getting repairs done can be just as nail-biting and terrifying as watching a horror movie. Though, the scary part isn’t a ghost appearing or a monster on the loose, but rather receiving a higher-than-anticipated bill for the work that was performed. Luckily, flat rate pricing eliminates the element of surprise, as the homeowner is agreeing to a price upfront before the job starts.
#2: They can focus on the quality of your work, not your hourly rate
With flat rate pricing, homeowners aren’t paying more if you take longer on the job, so your hourly rate is of no concern to them. Instead, their focus will be on the results of the job and the great work and service you delivered.
Why Contractors Love It:
#1. The Homeowner Doesn’t Hover
When someone realizes they’re being watched, it’s only natural for them to be pressured to perform better. So, when a homeowner is breathing down your neck, surveying your every move and asking when you’re going to be done with their repair, it’s a no-brainer you’re going to be more stressed. However, by giving a flat rate price up front to the homeowner, they won’t have to worry about how long you take on the job or what you’re doing – they already know what they’re paying. And when they put away their stopwatch, you can put your hair down.
#2: Productivity is Rewarded
With flat rate pricing, productivity earns you more profits. If a service tech moves through a job efficiently, they can get more jobs done in a day, earning them and their company more profits than they would if they charged an hourly rate.
#3: Shorter Billing Cycle
Since flat rate means providing a price up front, you won’t have to worry about keeping detailed accounts about the hours worked and costs incurred after a job, doing the math, and sending off this information for your office to create an invoice. Instead, you can give your customer the option to prepay, or pay once the job is done while you’re onsite, ultimately shortening the billing cycle and increasing your cash flow.
In a nutshell, using flat rate pricing is going to get you happier customers and happier service techs. It adds predictability to your business, dramatically reduces the risk of pricing disputes, and opens up the door to more profitability. And while over 92% of homeowners prefer flat rate pricing, a surprisingly low number of contractors actually use it! This means that if you jump on the flat rate bandwagon, you have the opportunity to attract more homeowners, win more jobs, and increase customer satisfaction.
It’s easy to be successful with flat rate pricing too – especially when you use a platform like Profit Rhino. Profit Rhino can offer your HVAC, electrical, or plumbing business the tools and resources you need to quickly implement flat rate pricing and increase your average ticket.
To learn how you can help your business thrive, visit Rhino University and check out our online educational classes!