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I’m sure you’ve been asked, “How much do you charge to replace my water heater?” That question could be asked for any task — boiler, furnace and air-conditioner replacements as well as smaller tasks such as faucet/fixture repairs or replacements and heating or cooling services.
Regardless of the type of task, before you open your mouth and quote a price, put your brain in gear and think!
Putting aside the fact that the consumer may only be contemplating having work done and only wants an idea of the cost, all too many times this potential customer wants to compare different contractor prices. You may actually be helping your competitor get the job instead of you.
No contractor, including you, can see all the circumstances involved in doing the actual job from a phone.
Changing prices after a quote
Even though smartphones allow the caller to send you a picture or video and measurements, what is not shown over the phone must be seen in person.
Therefore, contractors cannot give the actual price they would charge over the phone for tasks they have not seen themselves.
Once you see what is entailed to perform the repair, the price you would have quoted over the phone could very well be too low for you to perform the task and recover the costs incurred, and earn the profit you desire. In which case, your word regarding that phone quote is not worth the breath you used to quote it.
Changing the price after you see the job makes you untrustworthy in the minds of the consumer. Untrustworthy contractors seldom get jobs from intelligent consumers.
Any contractor who quotes prices over the phone gives the consumer potentially flawed information. This could result in an argument over the price and your business practices once the job is seen in person — rather than a pleasant conversation about how you can best serve the consumer’s requests.
If the price increases once all circumstances are seen, the contractor will often not get the job at the proper selling price.
Consumers who are foolish enough to give untrustworthy contractors their business often wind up in an argument with the contractor at some point in the relationship.
So, what are you to do?
Explaining to the consumer
First, you must address the consumer’s question in the following manner.
“In order to give you the price we will charge, (caller’s name),
“I must see the job to determine the model you have requested is proper for the application; check the location in the building for position, accessibility and difficulty or ease to set the material/equipment requested; and determine whether the adjacent material is in a good state of repair and will not cause a problem for the new material/equipment.
“It’s possible that the wrong material/equipment was installed initially, and/or the state of the adjacent material may have caused the problem you are experiencing.
“If you give me your address, we can set up an appointment at your convenience and quote you the price to do the job. If I see any other way to address your request, I’ll also quote that price to you.”
But when you travel to see the task requested, you have already spent the time to travel to the consumer’s location, talk to them, look at the situation, calculate your selling price and present that price to the consumer. In other words, you have already spent a good deal of time. And time is money.
If you don’t get the job, you paid for the consumer’s window shopping.
You are untrustworthy if you quote a phone price that you can’t stand behind and raise your price after seeing the job.
The only way to avoid this situation is to not give prices over the phone for problems you have not seen.
If only to cut your losses, you stick to your phone price to get the job since you have already expended some of your resources, you lose.
That’s two ways to lose. If you raise your phone price, you are untrustworthy; and if you stick to your phone price, you lose money.
The question becomes, how do you win?
Spreading the cost around
Larger tasks such as plumbing, heating and cooling systems for additions, new construction, kitchen/bath renovations, etc., require contractors to absorb the costs incurred to see the tasks.
But those types of tasks have higher prices than service repairs and replacements. Contractors who perform those types of tasks and are smart business people spread those costs over the jobs they perform. They do it by placing a factor regarding those annual estimating costs in the budget they use to arrive at their prices.
In effect, the consumers who avail themselves of the services those contractors provide help pay for the costs consumed by those who were only window shopping.
It may not sound fair, but the alternative is that the contractor pays for the time spent on the jobs they do not get. And after all, there are only two choices of who pays — contractors or consumers.
Service contractors who perform smaller tasks such as faucet/fixture replacements and plumbing/heating/cooling repairs, etc., don’t have the luxury of spreading the costs associated with seeing the tasks in person as those who do the larger jobs. Their tasks cost less than the larger jobs.
Then the question of how service contractors recover those costs arises.
Minimum service call fee
Smart plumbing, heating and cooling service contractors should charge a minimum service call fee to cover the expenses they incur to see the circumstances revolving around the consumer’s requests.
It’s what doctors do; a fee is charged to you whenever you see a doctor. You might wonder why I’m comparing the business practices of doctors to service contractors. The answer is simple — service contractors are the doctors of building systems.
Since consumers can’t bring their buildings to you, you incur the costs of traveling to their locations.
Smart service contractors include these costs in the price of the first service the consumer requests: travel to the consumer’s location, checking out the situation and discussing options with the consumer. Then they can tell the consumer that if they perform a task at that visit, there will be no minimum service call charge.
They could further inform the consumer that they only have to pay the minimum service call charge if they come out and no other services are purchased at that service call visit.
Intelligent consumers who really intend to make a purchase will understand the logic of your response and business practices, and consider making an appointment with you to visit their homes or businesses.
Window shoppers who were only comparing prices probably won’t call. And if they don’t, the contractor doesn’t expend resources on a lost cause.
No additional service charges
U.S. service contractors incur a true labor/overhead cost between $100 and $250 per tech/truck hour for one qualified tech and one properly equipped service vehicle — if they sell all their available revenue-producing tech/truck hours all the time.
Let’s say your average travel time to a consumer’s location is 30 minutes; discussing the consumer’s request and doing any paperwork regarding the consumer’s request is another 30 minutes. The actual labor/overhead cost you incur for one tech/truck hour as it pertains to your minimum service call charge is $100 at the lower end of the cost-to-contractor range and $250 at the higher end.
Those example costs to you, the contractor, only cover your average travel time to, discussion with, and paperwork done for the consumer.
If you are wise enough to include all the costs you incur serving consumers, those costs must be included in the price of the first task you perform for the consumer at the service call visit.
To help yourself sell any additional tasks to be performed at the visit — on the condition that the first task is performed at the visit — you would not include the minimum service call charge in the price for those additional tasks. After all, you are already there.
By explaining that the prices for the additional tasks are only good at that visit and may be higher at any additional visits, you may entice the consumer to give you the additional work then so you can bring in more revenue.
I’m as close as your phone if you want to speak to me on this or any contracting business matter.
Always think about having solutions that allow you to be confident in your prices as well as your business protocols. Then you can sell jobs at prices that allow you to recover your true costs — and earn the reward you deserve for the delivery of excellence rather than buying jobs at prices that don’t allow you to recover your costs, let alone make a profit.
Successful contracting businesses use sound business game plans.