How much do you charge for a service call

[B4T]

bob...1) we are beyond free estimates...now we are actually talking about charging for service calls and taking a loss

I have gotten many service changes out of service calls from that "LOSS". Profit from a SC is over a $1000.00 for a days work. Beats sitting home waiting for a cherry job to come in. That customer gave my name to someone else or needed one some time later. The idea was to get my name and number into as many homes as possible.

To me, paying $500.00 a month on a Yellow Pages ad is a loss. I would rather put that money into lettering on a new truck.

 

[emahler]

I have gotten many service changes out of service calls from that "LOSS". Profit from a SC is over a $1000.00 for a days work. Beats sitting home waiting for a cherry job to come in. That customer gave my name to someone else or needed one some time later. The idea was to get my name and number into as many homes as possible.

To me, paying $500.00 a month on a Yellow Pages ad is a loss. I would rather put that money into lettering on a new truck.

what's your ratio? and $1000 may be your gross profit, not your net...how many service changes a month for you? how many service calls a month?

my guess is you are looking at the situation with emotion....

 

[Mr. Wizard]

Just out of curiousity , How do you make any money by charging a $65 service call ?

I charge $125 for first hour and even then rarely make any profit unless it is right down the block. I normally use a set price for jobs but there are a few times I have to charge a service call or as I call it a " Diagnostic fee "

Maybe I'm misunderstanding what you guys are saying. Let me use this as an example. Lets use a generic job so Resi/Comm. doesn't come into play :

Customer calls you up, says that 2 receptacles are not working. You schedule the service call.

You drive 20 minutes to job, you spend another 20 minutes on job to find that in 1 receptacle a backstabbed wire popped loose and make repair. You spend another 20 minutes driving back to shop. Your total bill is $65 ?How can you make any profit at that $65 price ? or at $75 ? or even at $85 ?

Most of the shops around here will begin charging Customer "B" when they leave Customer "A". Scenario: I'm at Customer "A"s house, just finished up and call the shop to see whats next. And it's 2:00. Shop says go to Customer "B"s house - 20 minutes away. By the time I get to Customer "B"s house, they have 20 minutes charged to their job for my drive time. I asked a friend of mine about the ethics involved in that, and he tells me that by the time they get the invoice in the mail they have usually forgotten how long you were there. Not a very cool way of doing it, but several shops here do it like that, and have been doing it for years and years. Not me, though.

 

[480sparky]

.....and he tells me that by the time they get the invoice in the mail they have usually forgotten how long you were there. .........

He's in the folks' house and doesn't collect right then and there???????????

 

[emahler]

There is clearly a difference in mentality between a "service" contractor and a contractor that does occasional service calls. And as long as the difference is recognized, posts can be read with the intent known.

 

[Mr. Wizard]

Of course that is what they want but is not always how it works, my wife goes to 1/2 dozen stores buying the loss leaders at each store each week. That means other customers are subsidizing my groceries, great, I don't set the rules. It may be apples and oranges to you it is not that to me as the consumer.

As a consumer I see no difference in Walmart providing a loss leader and contractor giving free estimates. I have gotten free estimates from asphalt, roofing and masonry contractors. The ones I called that wanted money to come out where out of the running for the work, simple as that.

Does buying the loss leaders make up for the amount of fuel used going to all those different stores each week?

 

[Mr. Wizard]

He's in the folks' house and doesn't collect right then and there???????????

My friend has worked for one of those shops for awhile (years), and he has never, ever received payment on the spot. Each time, 100%, they'll send the customer an invoice through the mail.

 

[480sparky]

My friend has worked for one of those shops for awhile (years), and he has never, ever received payment on the spot. Each time, 100%, they'll send the customer an invoice through the mail.

I used to work at an outfit that would reward employees (w/extra pay) who collect on-site.

The only time I invoice is either they're a regular customer, or they're just not home when I'm done. I don't invoice from the office in the latter, I just leave an invoice on the kitchen counter.

 

[celtic]

Most of the shops around here will begin charging Customer "B" when they leave Customer "A". Scenario: I'm at Customer "A"s house, just finished up and call the shop to see whats next. And it's 2:00. Shop says go to Customer "B"s house - 20 minutes away. By the time I get to Customer "B"s house, they have 20 minutes charged to their job for my drive time.

I see no issue with portal-to-portal charges...

I asked a friend of mine about the ethics involved in that, and he tells me that by the time they get the invoice in the mail they have usually forgotten how long you were there. Not a very cool way of doing it, but several shops here do it like that, and have been doing it for years and years. Not me, though.

The logic behind trying to "pull one over" on the HO defies logic.

 

[iwire]

Does buying the loss leaders make up for the amount of fuel used going to all those different stores each week?

Heck yes, even with her gas guzzling Suburban, all the stores are within 2 miles from my home.

She rarely pays full price for anything, as a matter of fact one of the supermarkets has gas stations and she builds up points that take money off of the price per gallon, we paid only $1.36 per gallon for 35 gallon fill up just a week ago. :smile:

http://www.stopandshop.com/savings/gasoline.htm

 

[powerslave]

Any electrician surveying this website will get the mistaken impression that most shops are in the business of making service calls to a home or business for the home/business owner.

Most electricians work for EC's who sub for GC's. When a time ticket comes up, it is $55 an hour. The GC adds on another 5% for his cut. Any part of that change that was in the original bid, say a termination or breakers, etc. they will not get charged time for, its very strict.

Don't try and dissect the cost, its pretty much labor&burden, end of story. Must be good business, because its one of the biggest shops in the US. In other words, working for HO's is not the bread and butter.

We are a resi, light commercial service shop. I decided long ago not to bid on any more new construction (residential). Too many self employed electricians charging way too little for their work. Too many GCs more than willing to take advantage of them. Every year after those guys go out of business more come to take there place. Very little to set yourself apart from them. The GCs only go for the lowest price. What happens when you're bidding against a guy who lives in his Mom's basement and doesn't think he needs health insurance or any other benefits? Just a broken down truck and some rusty hand tools? (Actually happened)
There is a huge difference between the mind set of a GC and the people we target as our customers. HOs don't want the guy in the broken down truck pulling into their driveway. They don't care how cheap he is. They are willing to spend the extra money for a clean, uniformed technician that is going to show up on time, present himself professionally and treat them and their home with the utmost care and respect.
My point is that electrical service work is our bread and butter. I would never go back to residential construction. And I am not saying that all resi construction guys drive around in broken down trucks and live in their Mom's basements. I'm just saying enough of them do around here to make me not want to waste my time bidding against them.

 

[emahler]

Heck yes, even with her gas guzzling Suburban, all the stores are within 2 miles from my home.

She rarely pays full price for anything, as a matter of fact one of the supermarkets has gas stations and she builds up points that take money off of the price per gallon, we paid only $1.36 per gallon for 35 gallon fill up just a week ago. :smile:

http://www.stopandshop.com/savings/gasoline.htm

bob, you are a perfect example of why one should charge for estimates...you are not my customer...i'll let the other guy have you...

i want the customer who would rather pay be another 10% so he doesn't have to spend half a day getting quotes,...

 

[Kdog76]

As a one man shop, right now I am charging $50 an hour. My last employer was at $35 an hour! Like many others, when just starting out I was WAY to cheap...Now, I am up to $50/hr and I am doing okay. If I had a new truck (which someday I will) and some employees I know I would have to charge much higher. I think the union shops around here are charging out at least $65 an hour, maybe more... I should call around and find out just to see where the competition is at. I know I am not the cheapest, and don't ever want to be the cheapest.

 

[iwire]

bob, you are a perfect example of why one should charge for estimates...you are not my customer...i'll let the other guy have you...

That is certainly a fine choice and definitely your right as the business owner. :smile: You do not want educated, strong customers, you want doormats.

But everyone does not feel like you do and the guy that did my roof made money. The guy that did my masonry actually reduced his price after he was done because it went faster then he thought. I know you will say he was an idiot, IMO he bought a lot of good talk about him.

Both contractors where 'real' contractors with offices and nice equipment did great work and left my yard looking better then when they started. I was very happy with the results. I did have to renegotiate with the roofing guy part way into it but we reached a mutual agreement that left us both happy.

i want the customer who would rather pay be another 10% so he doesn't have to spend half a day getting quotes,...

Thats cool, but it is not everyones choice.

 

[growler]

I have gotten free estimates from asphalt, roofing and masonry contractors. The ones I called that wanted money to come out where out of the running for the work, simple as that.

Bob I think you look at the business side of things from the wrong perspective.

You may not drive an expensive sports car, drink expensive champagne or smoke Cuban cigars but that doesn't mean that the people selling these items are not making good money.

If drug dealers were depending on me to make their living they would all starve to death but I here they are doing a booming business.

If you are going to sell an item or service you don't ask if you would like this item or service you ask how many other people would be willing to pay for this item or service.

I don't go to a coin laundry, pay to get my car washed or even have a lawn service but that doesn't mean that these are bad business ideas.

I'm not going to pay to have my palm read, stick little needles into me (acupuncture), give money to a priest, get a hair transplant or pay for plastic surgery if I can help it but there are plenty of people that do.

Business is all about finding or creating a market and then servicing that market. Some bartenders don't even drink.

By the way I didn't buy any pet rocks either. ( sold in the late 70's and actually made some money for the guy that thought of it).

I may not pay for an estimate either but I'm not selling to me. I'm not even sure I would want me as a customer I could be to critical.

 

[iwire]

Bob I think you look at the business side of things from the wrong perspective.

You may not drive an expensive sports car, drink expensive champagne or smoke Cuban cigars but that doesn't mean that the people selling these items are not making good money.

I think you have misunderstood me. :smile:

I am not saying emahler is doing anything wrong, I am only saying that his way is not the only way. He is looking for a certain type of customer (in my mind he wants a wuss) and there in nothing wrong with that. Just like I see nothing wrong with Nike selling $10 sneakers for $250 to people who need to brag they have $250 sneakers.

 

[emahler]

bob, never said anything was ever the only way...but if 90% of the companies that are successful (by general definition of business success) use a certain method...i'll bet on them rather than the other 10% that got lucky...

and if i'm a new contractor reading these forums, i'm thankful that someone is talking about the methods used by contractors other than the 'buy high, sell low, bust your tail for 30 yrs and you might be able to take a vacation' plan that most EC's subscribe too.

 

[celtic]

... if i'm a new contractor reading these forums, i'm thankful that ....

...this banter is even happening. [As well as the other thread: Charging for estimates is not working!]


Not to get too off topic....but I am impressed that the dialogues have run on so long ~ and generally remained focused.


IMHO, the secrecy surrounding operating as an EC has been in the closest way too long.

 

[jmsbrush]

...this banter is even happening. [As well as the other thread: Charging for estimates is not working!]


Not to get too off topic....but I am impressed that the dialogues have run on so long ~ and generally remained focused.


IMHO, the secrecy surrounding operating as an EC has been in the closest way too long.

Your exactly correct.
If contractors were more open about talking about the things that need to be Talked about, then as a whole we would all be better. Owners to employees.

 

[jmsbrush]

That is certainly a fine choice and definitely your right as the business owner. :smile: You do not want educated, strong customers, you want doormats.

But everyone does not feel like you do and the guy that did my roof made money. The guy that did my masonry actually reduced his price after he was done because it went faster then he thought. I know you will say he was an idiot, IMO he bought a lot of good talk about him.

Both contractors where 'real' contractors with offices and nice equipment did great work and left my yard looking better then when they started. I was very happy with the results. I did have to renegotiate with the roofing guy part way into it but we reached a mutual agreement that left us both happy.:smile:



Thats cool, but it is not everyones choice.

Bob roof contractors are different animals than Electrical contractors that specialize in service only.
Service fee is appropriate to come out for a $49 dollar receptacle change versus a re roof which will be in the thousands. Which is more of the contracting side of things just like when I bid commercial work. Or have an estimator do it, he has to be paid, which is covered in the overhead.
I'm talking more so on only electrical service work