Flat rate price question.

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iwire said:
That sounds unethical to me.
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Maybe it's unethical to have a free estimate, then add that cost into the job.
Maybe it's unethical to have free coffee, then add that cost into the meal.
Maybe it's unethical to low-bid, then make the profit on extras.
Maybe it's unethical to have a loss-leader, then markup other items to cover the cost.

For me, it works both ways. If I quote a 2 hour troubleshoot & it's the first thing I look at, I reduce that fee. Sometimes I leave that fee alone and have a no-charge or reduced-charge repair.
 
iwire said:
I do not believe the auto dealers change their flat rate for each task based on how poorly the last task went.
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You can't get a flat rate price on an automobile that matches what we are expected to do on a house.

For a fixed price they will hook your vehicle up to the diagontics machine. If the print out shows a bad alternator they will give a price to replace that but they don't guarantee that to be the only problem. If that doesn't solve the problem they just keep replacing parts until the problem is solved. It's pretty easy to go in for a $400 repair an leave with an $800 bill. If they notice that the drive belt is worn when replacing the alternator you can either pay to get it replaced or if you don't they don't care if it breaks as you drive off the property. Same with an old battery. They just replace the alternator for a set price and don't guarantee that your car will start tomorrow morning ( it's up to the customer to OK all needed repairs to put vehicle in working order).

If we could give a flat rate price to find at least part of the problem things would be simple. I have never been in a house yet that I didn't find part of the problem in the first few minutes.

AMCO motto for the electrical service contractor. 50% of the houses we test don't need a service upgrade. I'll bet customers would be happy with that. :grin:
 
emahler said:
"Mr. Jones, our diagnostic fee to find the problem is $350...once we find the problem, we will give you a price to repair it before we do anything."

"Mr. Jones, we found the problem, its ABC. It will be $250 to repair it, would you like us to proceed?"
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Mr. Jones: What's the problem?

EC: We found and uncovered this junction box buried behind the sheet rock in the ceiling. It has a loose connection on the neutral wire.

Mr. Jones: How are you going to fix it?

EC: We'll redo the connections and install wirenuts on them.

Mr Jones: You want $250 just to do that? Are you nuts?
 
aline said:
Mr. Jones: What's the problem?

EC: We found and uncovered this junction box buried behind the sheet rock in the ceiling. It has a loose connection on the neutral wire.
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Buried box in the ceiling, need access. The lady doesn't want an exposed box cover and she doesn't want an access panel so now what do you do?
 
growler said:
Buried box in the ceiling, need access. The lady doesn't want an exposed box cover and she doesn't want an access panel so now what do you do?
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Then you can justify the cost.

Lady this would be a good spot to have a smoke/CO detector installed. It would not only cover the hole but also provide you with a valuable safety feature.

Lady have you ever considered installing some can lights in this room? :)

But what if the customer is cheap and doesn't give a crap if he has a hole in the ceiling or he just tells you to forget it and he'll fix the problem himself?
 
emahler said:
In one example nothing is hidden and the customer is in control of their money....in the other, everything is hidden and the customers have no control...
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If the customer knows what you will be charging per hour, how is that "unethical"?
Is it my responsibility to ensure they have passed 3rd grade math?


Which is more ethical:
"Mr. Jones, our diagnostic fee to find the problem is $350...once we find the problem, we will give you a price to repair it before we do anything."

or

Mr. Smith, we charge $xx.xx/per hour per man to locate the trouble...once we find the problem, we will give you a price to repair it before we do anything."
Had you been at Mr. Jones' house and NOT found the problem in 8 hours - then what?

Let's not forget....Mr. Jones KNEW the wire was cut inside the wall - but did NOT "recall" it even after being questioned numerous times, ie:
- When was the last time work was done in this house/unit?
- What type of work was done in this house/unit?
- Was there EVER ANY WORK AT ALL EVER DONE ON THIS HOUSE?

It was quite literally like pulling teeth with this HO.
 
celtic said:
If the customer knows what you will be charging per hour, how is that "unethical"?
Is it my responsibility to ensure they have passed 3rd grade math?


Which is more ethical:
"Mr. Jones, our diagnostic fee to find the problem is $350...once we find the problem, we will give you a price to repair it before we do anything."

or

Mr. Smith, we charge $xx.xx/per hour per man to locate the trouble...once we find the problem, we will give you a price to repair it before we do anything."
Had you been at Mr. Jones' house and NOT found the problem in 8 hours - then what?

Let's not forget....Mr. Jones KNEW the wire was cut inside the wall - but did NOT "recall" it even after being questioned numerous times, ie:
- When was the last time work was done in this house/unit?
- What type of work was done in this house/unit?
- Was there EVER ANY WORK AT ALL EVER DONE ON THIS HOUSE?

It was quite literally like pulling teeth with this HO.
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not everything is about you:D
 
Celtic; I usually agree with everything you say, but on this one you are wrong. It is unethical to charge some one an hourly rate when you have no idea as to how long it would take. Did your 54 hr trouble shoot now when you where going to be done? Also Sparky55 and emahler I am also a flat rate company, they don't know that a service tech is not a regular mechanic, that he has massive amount of training etc... I teach my guys to do it like this: Mr Jones if I find the problem in here it is this much, if I leave here and go there, it is this much and if I have to leave here then we will have to relook at things.
Every one has there way of doing thing, I have to tech that I taught and do it different from each other and I average 610 on a TS call and they are about 570 and 635. so you see three different style, result the same result. You just can't become a flat rate company overnight there is a lot more than meets the eye. You really have to understand you really have to now the business end.
 
g@friendly said:
Celtic; I usually agree with everything you say....
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You sure you wanted that on the internet for all eternity?
:grin:
:grin:




g@friendly said:
, but on this one you are wrong.
It is unethical to charge some one an hourly rate when you have no idea as to how long it would take. Did your 54 hr trouble shoot now when you where going to be done? Also Sparky55 and emahler I am also a flat rate company, they don't know that a service tech is not a regular mechanic, that he has massive amount of training etc... I teach my guys to do it like this: Mr Jones if I find the problem in here it is this much, if I leave here and go there, it is this much and if I have to leave here then we will have to relook at things.
Every one has there way of doing thing, I have to tech that I taught and do it different from each other and I average 610 on a TS call and they are about 570 and 635. so you see three different style, result the same result. You just can't become a flat rate company overnight there is a lot more than meets the eye. You really have to understand you really have to now the business end.
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Believe it or not, I am actually a fan of Flat Rate Pricing (FRP).
However...IMHO...you have to know what you are up against.
In this particular scenario, we were up against a HO who was:
- a very unaccomplished DIYer
- too tight lipped/forgetful

Going into it, I did not know about the above two variables.


Maybe one of these days, I'll get around to purchasing a FRP system.
 
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