Free Estimate Questions

[aline]

You need help selling yourself to them......sorry.


If you go on half as much of these disaster/cheap bastages calls as you post, I would think you need to train your CSR a littlle more. Anyone after doing this line of work for some time, should be able to weed out all the yo-yo's in the world in a couple minute phone call. You have a trained CSR, and a dispatch fee you use to "weed" out tirekickers, yo-yo's and DIY's looking for price checks..........but your still going out on them?????

I don't mean anything by this, and don't take offense, but this is what I read from you.

Are you marketting to the wrong area?

I would take you more seriously if you were running a succesful residential service and repair company and doing these small residential jobs, but you yourself said that you quit doing this type of work because you weren't making any money at it.

They say that a business should target a select group of customers and not try to be everything to everyone.

Having a dispatch fee is a way to target a select group of customers.
The select group of customers I'm trying to target are the group of customers who believe my time is valuable and worth something.

For them a $29 dispatch fee for me to spend an hour of my time in traffic and another half hour to an hour at their home is money well spent.

You've heard the saying you get what you pay for.
I show up on time and will always call if I'm not going to be ontime.
Some contractors don't show up on time, expect the homeowner to wait around all day until they get there, don't show up at all and don't bother to call.

I used to go out on a lot more of these disaster/cheap bastages calls before I started a disptach fee.
You'll never completely be able to weed out all of these calls.

 

[emahler]

If all that is figured into your billable hour rate, and you included averaging only 4 billable hours a day to make your numbers.....

I billed 6 hrs.....still paying the guys for 8.....so anything they do after 4 hrs is gravy.

In fact, my salary is included in their billable hrs, so is the company truck and the gas in it.

I could leave the office, go do an estimate or two, and it wouldn't cost me a dime more than I already included in my billable hrs rate.

This is true, if you don't care whether the bottom line on your P&L is black or red.

Whether you bill the customer directly or notn its still real dollars.

And what about those days that only have 2 or 3 billable hours?

 

[Dnkldorf]

but you yourself said that you quit doing this type of work because you weren't making any money at it.

I believe I said, "there is no money in it".

And I beleived I explained this in My headaches to earnings ratio that I do business by.

For the headaches, for me, there is no money in Resi sevice.

 

[Dnkldorf]

This is true, if you don't care whether the bottom line on your P&L is black or red.

Whether you bill the customer directly or notn its still real dollars.

And what about those days that only have 2 or 3 billable hours?

I will refer to my quote on dazzling and baffling for the remainder of this discussion.

 

[emahler]

I will refer to my quote on dazzling and baffling for the remainder of this discussion.

As with the laws of this country, ignorance is not a defense.

 

[Ohmy]

I would take you more seriously if you were running a succesful residential service and repair company and doing these small residential jobs, but you yourself said that you quit doing this type of work because you weren't making any money at it.

They say that a business should target a select group of customers and not try to be everything to everyone.

Having a dispatch fee is a way to target a select group of customers.
The select group of customers I'm trying to target are the group of customers who believe my time is valuable and worth something.

For them a $29 dispatch fee for me to spend an hour of my time in traffic and another half hour to an hour at their home is money well spent.

You've heard the saying you get what you pay for.
I show up on time and will always call if I'm not going to be ontime.
Some contractors don't show up on time, expect the homeowner to wait around all day until they get there, don't show up at all and don't bother to call.

I used to go out on a lot more of these disaster/cheap bastages calls before I started a disptach fee.
You'll never completely be able to weed out all of these calls.

Soo true...plus the free calls are the ones that make you hate your job and your life. How many times have you guys gone a cheapo customer call that just made you hate being an electrician...how many times did that person agree to pay a service call. Just in quality of life, it makes sense to get those folks out of your life and make sure they don't refer you to other cheapo customers.

Also, another sweet untangible benifit is that you generally charge more on calls that you getting a dispatch fee for. When you go out for free there is high pressure to land the job (so you don't waste your time) and you think the customer is really concerned about price. When you charge for an estimate you know you are not wasting your time and you know the customer wants you not the cheapest idoit he can find.

 

[bradleyelectric]

I believe I said, "there is no money in it".

And I beleived I explained this in My headaches to earnings ratio that I do business by.

For the headaches, for me, there is no money in Resi sevice.

So you have nothing to offer on how to make money doing residential service work. Just how to do it in such a way that is not worth doing.

 

[Rewire]

what are you talking about? if someone calls for the 1st time, and they get told about a dispatch fee, they agree and then they get our "service"...the next time they call they don't get the dispatch fee because they are a repeat customer...but they still get our "service"...

i don't think you understand how Aline, or thousands of other contractors, use the dispatch fee...

the better illustration would be to use your barber analogy...except the 1st time you had to pay $15 to reserve a spot with him...so you do...and you get the service you write about on your 1st visit...

and the 2nd time, they waive the $15 reservation fee....but you still get the same service as the 1st time...

so you tell your friend to go there...he calls...says you referred him...so they waive the reservation fee...and he still gets the same service as the 1st time...

then a stranger calls...gets told about the $15 reservation fee...agrees, and gets the same service you did the 1st time...

the key is in the consistency of the service provided...not in the reservation fee...

you need better business books...

Maybe you should buy some

 

[Rewire]

I believe this is a copywrited story. I also believe it is a bad analogy for the situation.

it was not a cut and paste so no copywrite violation,its a great read by the way,the point was being consistant in your method,I think the analogy was appropriate to that aspect,I am not arguing the pros or cons of a dispatch fee but the inconsistancy of one particular method

 

[emahler]

for all the guys who are just reading along, who might be wondering the value of this discussion...and who might be confused by the misinformation...here are a few things to keep in mind...

dispatch fees are primarily used by service contractors...not contractors who do new construction or larger remodel jobs...but service contractors who's average job ticket it $500ish or less...

it's a different ballgame when the owner gives an estimate on a $10,000 renovation that will keep 2 men busy for a week.

i'm talking about the service company that specializes in resi/lt comm service. Where the average truck will be on 3-5 jobs per day.

now, the contractors who do new construction/remodel, with some service thrown in the mix, might need 4-5 calls a week to generate enough work to keep 3 trucks/crews busy for a month. So it's nothing for the owner to go give 5 estimates over the course of a week and sell $30,000 worth of remodels/installations..

but the service company will need 9-15 calls a day to keep the same 3 trucks busy...when we ran strictly service, our goal was 3 calls/day/truck...why bother you ask? because those same 3 trucks can do $60,000+ in the same month as the renovation/remodeler is doing $30-40k...

there isn't an owner out there who can effectively, or efficiently perform 9-15 estimates a day...

so what do you do? you have the techs perform the estimates...preferably with a flat rate system, so that there is consistency with your pricing...

which brings us to billing and hourly rates....

let's say, for simplicity, that each truck contains 1 man and needs to generate $800/day, not including material...

so for the slow people in class, we need to generate $800 a day no matter how we bill...we can bill 8 hrs @ $100/hr...we can bill 4 hrs @ $200/hr...or we can bill any which way we want, we just need to generate $800/day....every day...which means for every day we generate $600, we better have a day in which we generate $1000...

so, since the techs are now performing estimates, as well as doing work, it's definitely going to cut down on billable hours (billable hour defined as the time they are actually on site performing work that can be billed)....

so when guys on this site talk about billable hours, this is what they are referring to...

now, the more billable hours we can get in a day, the less we can charge to reach our magic number of $800...

if we can average 5 billable hours a day, we can base our pricing on $160/billable hour

if we can average 6 billable hours a day, we can base our pricing on $133/billable hour...

the more hours we can bill, the less we have to charge to meet our needs, and the more competitively priced we will be....

how do we increase billable hours? simple, we decrease non-billable hours...

how do we do this? we increase closing ratios and decrease wasted time for lost estimates....

so, if by imposing a $29 trip charge, you increase your closing ratio to 66%, and your job average is $400 (again for simplicity), you need to close 2 jobs a day...in order to average 2 jobs a day, you need to go on 3 estimates a day. now, if you average a conversion rate of 60% for call to estimate, you need 5 calls per day, per truck to hit your targets...

let's look at the same setup with free estimates...

if you follow the industry average, and close 40% of your calls, you now need to go on 5 estimates a day, to close 2 at a $400 avg to generate $800 for the day...

so lets say you convert 90% of the calls into estimates (you'll never convert 100%), you now need 5.5 calls/day/truck...

so for a 3 truck operation, it looks like this:

dispatch fee- # calls needed = 15
# estimates needed = 9
# jobs needed = 6
total revenue = $2400

free estimate- # calls needed = 16.5 (round to 17)
# estimates needed = 15
# jobs needed = 6
total revenue = $2400

which one do you think cost more to operate?

i'll pick the free estimate guy...he needs to generate 2 more calls a day, travel to 6 more locations a day (gas, labor, wear and tear, etc)...

so for the same revenue, it just costs him more...there is also a good chance, he may need to add another van to cover all the calls (it's tough for a truck to do 3 estimates and 2 service calls in a day...) which will only increase his costs of operating...however, if he only looks at the top line, life will be great

btw - these numbers kind of come from historical data of our company when we did service...i didn't just pull them out of the air..

 

[jmsbrush]

That's a very good explanation. Now we just need to tell the other 9 Ec's that I'm competing with the same thing

 

[emahler]

That's a very good explanation. Now we just need to tell the other 9 Ec's that I'm competing with the same thing

nope...you just need to compete with a better class of EC's:grin:

 

[bradleyelectric]

it was not a cut and paste so no copywrite violation,its a great read by the way,the point was being consistant in your method,I think the analogy was appropriate to that aspect,I am not arguing the pros or cons of a dispatch fee but the inconsistancy of one particular method

OK, but the customer never sees an inconsistancy in service as is the case in "your" story.

 

[Rewire]

OK, but the customer never sees an inconsistancy in service as is the case in "your" story.

The story was an example of inconsistant methods,Think of customer A who is charged a fee but has that fee waived ,he tells his neighbor of your good work and the "fee" you charge but waived the neighbor calls and says he is a referal so you mention no fee,you do the neighbors work and he thanks customer A who asks if your "fee' was waived the neighbor tells him their was no "fee' mentioned.

The next day customer A tells a coworker looking for an electrician about you the coworker asks customer A if you charge to come out he says no because his neibor said their was no fee.

Coworker calls a few weeks later after looking up your number she fails to tell you customer A mentioned you so you treat her as a new client and ask a "fee'

The next day she unloads on customer A for giving her bad info about your"fee'

Now you sit by your phone wondering why customer A has not calle you for more work.

Gerber was not writing about the service but the expierience and the importance of consistancy.

 

[bradleyelectric]

The story was an example of inconsistant methods,Think of customer A who is charged a fee but has that fee waived ,he tells his neighbor of your good work and the "fee" you charge but waived the neighbor calls and says he is a referal so you mention no fee,you do the neighbors work and he thanks customer A who asks if your "fee' was waived the neighbor tells him their was no "fee' mentioned.

The next day customer A tells a coworker looking for an electrician about you the coworker asks customer A if you charge to come out he says no because his neibor said their was no fee.

Coworker calls a few weeks later after looking up your number she fails to tell you customer A mentioned you so you treat her as a new client and ask a "fee'

The next day she unloads on customer A for giving her bad info about your"fee'

Now you sit by your phone wondering why customer A has not calle you for more work.

Gerber was not writing about the service but the expierience and the importance of consistancy.

He was writing about his experience on 4 occasions. Not 4 different people's experience.

 

[emahler]

 

[emahler]

He was writing about his experience on 4 occasions. Not 4 different people's experience.

Additionally, you are charging the same price for the same service to all 4 people. The difference is that the non-repeat, non-referral customers (who call out of the blue) are being asked to put something into this process. The trip charge (or reservation fee) is not in addition to the cost of the service. It's essentially a deposit.

But I ask this- how many people go to a salon/barber and get an estimate?

And again, I only post this for the guys reading along and trying to learn. Also, plagerism is not limited to cutting and pasting.

 

[emahler]

According to the Merriam-Webster Online Dictionary, to "plagiarize" means

• to steal and pass off (the ideas or words of another) as one's own
• to use (another's production) without crediting the source
• to commit literary theft
• to present as new and original an idea or product derived from an existing source.

 

[emahler]

edit to add: if done properly, you can actually use the dispatch/reservation fee as a marketing tool to create customer loyalty.....it's one of the premises of most resi Customer Plans...if a customer joins your 'club' they get waived dispatch fees, discounted pricing (here is a hint, the discounted price should be your necessary cost, the standard price should be 5-10% higher)...priority service, etc...everyone wants to feel like a king...figure out how to do that, and you will be in the catbird seat...

 

[Rewire]

He was writing about his experience on 4 occasions. Not 4 different people's experience.

But it is the same outcome,The idea is to create a consistant expierience not just for one but for every customer.It is impossible to be consistant if you are constantly changing your methods.

We do alot of repeat business as well as referals,consistancy becomes very important.