How do you charge a service call.

[KVA]

my "techs are trained to close the deal and also to maximize each ticket that is what is called 'profit" and my goal is to have them do the work and I just collect the checks
you just left $60 on the table so?unds like some accounting classes might help you better understand income and expenses so you are saying if you get the job you didnt incure expenses or time yes lowering your price does affect the perception of value if someone offered for sale a $300,000.00farrarri for 2500.00 would you think great deal or would you think whats wrong with it
are you wal mart? selling a product is very different from selling a service You can offer unlimited products but you are limited on service.

Don't need to have accounting classes to figure out that my $119 charge is not profit it covers expenses and time that I would lose driving back to the shop if I didn't get the job. Since I'm giving the go ahead to do the job I didn't lose time driving back to my shop so i can pass that savings to the customer. It HELPS as an EXTRA incentive for them to hire me. I don't need to cut a penny off the bill to land a job. This has worked for me for years never had a complaint like the made up stories you have told. You just try to push your way of doing business on everyone like you did at ET forum:roll:

 

[KVA]

if someone offered for sale a $300,000.00farrarri for 2500.00 would you think great deal or would you think whats wrong with it

You are comparing knocking $60 of a bill to knocking $297,000+ off of something?:lol::lol: Dude.... on that note im done:lol:

 

[kwired]

You have to do what works for you. Where you live makes some difference in what people may expect to some degree.

How often do you find what is wrong and tell the customer what is needed and what it will cost, only to find they don't want to spend the money to fix it? Maybe if you don't tell them what is wrong they will not think they can pay for the time you did spend and plan to attempt to fix themselves now that you pointed out the problem.

Most will expect you to fix it - that is why they called you in the first place.

 

[Rewire]

Don't need to have accounting classes to figure out that my $119 charge is not profit it covers expenses and time that I would lose driving back to the shop if I didn't get the job. Since I'm giving the go ahead to do the job I didn't lose time driving back to my shop so i can pass that savings to the customer. It HELPS as an EXTRA incentive for them to hire me. I don't need to cut a penny off the bill to land a job. This has worked for me for years never had a complaint like the made up stories you have told. You just try to push your way of doing business on everyone like you did at ET forum:roll:

our service charge is not for the return trip it is to cover the expense of getting our tech and rolling warehouse to the customer our diagnostic is to cover the expense of finding the issue trhese expenses remain constant wether we get the job or not so reducing or eliminating them would force those charges to be offset by our repair fee,this would reduce the ticket and effect the bottom line. I am not pushing anything simply pointing out how we approach our fee structure your free to learn from it if you choose. If you are more comfortable doing what you have always done then by all means continue . We asked ourselves the question of why do we charge these fees? We listed ouir reasons and then decided that using it to leverasge a sale was not needed. Now we keep it.

 

[jmellc]

I still struggle with this, after 4 years. I have tried to stick with no charge to look a job over, and still do that on bidding a remodel or other good project.

I have been burned a few times, going out to troubleshoot a problem, then being told my price for the fix is too high. I now tell people I charge 1 hour for simple troubleshooting or by the hour if the building is a rat's nest, as some are. I can usually tell the difference by 1 look in crawlspace & attic.

These are hard times for us and a lot of people out there. I don't want to leave people with no help at all, yet I can't afford to drive all over the county for free. I try to give the best price I can & give extra breaks to people I know are on fixed incomes, etc. I have let customers split payments & a couple of times let customer be my helper. That one didn't work too well. I probably won't do that again.

BTW, I have also learned not to give the customer any kind of itemized list of materials for any fix or project. A former employer had a customer who would use our quote as a material list and buy materials himself, then do the job trial & error. We started listing "wire" instead of 100' #12, etc. He called me and asked for details. I said "don't have the papers with me, I'll have to call you back tonight". I never called & he didn't either. Good riddance.

 

[Rewire]

our first six years in business we didn't charge a service call fee we would just go and hope for the best. Our big issue was in our financials we were just not getting the numbers we needed. When we joined ESI the very first thing we did was raise our prices 10%.we were surprised to find that we didn't loose a single customer. The next thing was to charge a service fee. We had never done this and I was not sure how this would go over with the customer. We started with a simple $59.00 fee I was surprised that we had little push back from customers . Letting go of old ideas has probably been the hardest part of impimenting our new systems. We were bleeding cash in our old way of doing things now we identify those loses and put them back to the bottom line. Finding a good system is what makes service work profitable. One thing that I have heard from everyone is that to make service work profitable you got to have a flat rate system and then train to use it to its maximum potential.

 

[kwired]

our first six years in business we didn't charge a service call fee we would just go and hope for the best. Our big issue was in our financials we were just not getting the numbers we needed. When we joined ESI the very first thing we did was raise our prices 10%.we were surprised to find that we didn't loose a single customer. The next thing was to charge a service fee. We had never done this and I was not sure how this would go over with the customer. We started with a simple $59.00 fee I was surprised that we had little push back from customers . Letting go of old ideas has probably been the hardest part of impimenting our new systems. We were bleeding cash in our old way of doing things now we identify those loses and put them back to the bottom line. Finding a good system is what makes service work profitable. One thing that I have heard from everyone is that to make service work profitable you got to have a flat rate system and then train to use it to its maximum potential.

That is the main thing is to have "a system" and be consistent with it. When you raised prices or at least changed how some things were done you said you never lost any customers. That is probably a little bit of luck, as there typically will always be someone that doesn't like something about it, but they may be the customers that you can afford to lose, others will not like it but will see a lot of other service business operate in a similar way and just accept it for what it is.

I cringe a little when people mention what they did for someone that appeared to be in financial need. Unless you know them personally and know they are in need you really have no idea. I have had many people that are experiencing hard times that couldn't afford service work yet they were the ones that will make sure they do pay you even if it takes a long time, while others that just are bad at managing their money don't care if they pay you at all. If you did something for free or recuced the price for that last group of people you did not do them any favors, you just contributed to their delinquency IMO. They will have no problem calling you back to take advantage of you again.

 

[brian john]

For emergency's we charge 4 hours minimum plus mileage.

For standard service calls 3 hours minimum. (depending what the nature of the call is)

We also have an equipment rental fee in most calls as the test equipment we utilize is expensive, expensive to repair and requires yearly calibration.

 

[PetrosA]

One thing I find interesting is that very few companies seem to publicly post their service fees online - or any rates at all for that matter. I'm curious whether this is a business decision, or whether they're not thinking about how customers price shop. I've seen some flat-rate shops post some of their fees online, but mostly in an advertising context - kind of like a Pep Boys Special or a Sears Winter Tire Deal. I'm turned off by franchises of any kind, so seeing flat rates is a red flag for me.

One of the challenges I'm chipping away at as a primarily residential electrician is how to create a systematic pricing structure for both service and hourly rates in my area of operations which span four counties with drastically different costs of living. On average there's a $100,000 difference in "similar home" prices, 10 cents per gallon on fuel, utility rates are lower etc. I kind of like the idea of adding a mileage charge as it could allow me to homogenize my hourly rates, but a difference in hourly rates would also make sense since the markets are very different (A $10-$15/hr. difference might be appropriate based on my market research) but the difference in hourly rates would affect a service call rate based on hourly minimums. I don't want to "gouge" the people in the lower cost of living area (where I live now) by adopting going rates for the more expensive areas nor do I want to be driving three or four hours a day to work for people who want me because I'm cheaper than their local electricians. Either way, because my business serves more than just a local market, pricing does require thought.

 

[Rewire]

I understand it this way. Please tell me if you charge differently.

Bill any service call a minimum of 2 hrs. After the first hour start your clock and bill at your regularly rate.

As long as you dont tell the customer you are basing the charge on a two hour minimum you will get less push back from the customer.

 

[mike1061]

I don't want to "gouge" the people in the lower cost of living area (where I live now) by adopting going rates for the more expensive areas nor do I want to be driving three or four hours a day to work for people who want me because I'm cheaper than their local electricians.

I look at it as people are paying me for my time and the materials I use. Makes no difference where they live (to me at any rate). Me, I personaly charge $150 for the first hour and $65 there after. I give plenty of discounts for lots of reasons, but that's the starting rate. The higher rate for the first hour is, for the lost wages traveling, gas and parking.
Thanks
Mike

 

[kwired]

As long as you dont tell the customer you are basing the charge on a two hour minimum you will get less push back from the customer.

Right. Think of how the customer sees it. Tell them you have a minimum charge of $$$.$$ and that seems acceptable as compared to "I am going to charge you for two hours even if the job only lasts for 15 minutes". Reality is you charged them the same in either case, but one is percieved different than the other.

 

[bgelectric]

Right. Think of how the customer sees it. Tell them you have a minimum charge of $$$.$$ and that seems acceptable as compared to "I am going to charge you for two hours even if the job only lasts for 15 minutes". Reality is you charged them the same in either case, but one is percieved different than the other.

So when do you start your clock at your regular hourly rate?
If you are there for 2 hours, do you hand them a bill for 2 hours worth (your minimum rate) or do you start your clock after the first hour and hand them a bill for 3 hours worth of work?

I guess im trying to find the balance for whats fair to both you and the customer.

 

[kwired]

So when do you start your clock at your regular hourly rate?
If you are there for 2 hours, do you hand them a bill for 2 hours worth (your minimum rate) or do you start your clock after the first hour and hand them a bill for 3 hours worth of work?

I guess im trying to find the balance for whats fair to both you and the customer.

I don't think there is a definite answer. Every business is going to have differing conditions that dictate what they decide to do. But being consistant is the one thing you should do. If you find you are taking a high number of calls that result in a lot of unbillable time then you probably need to increase minimum charges to compensate, if you don't take a lot of these calls maybe you do take the occasional loss, but at the expense of a satisfied customer - something that is hard to say is wrong.