Vegas trip leads to thinking about flat-rate pricing
SNIPS doesn't write about HVAC contractors who work in homes as much as our sister publication, The Air Conditioning, Heating and Refrigeration News, although we do feature columnists, such as Ruth King, who are experts on the topic.
Of course, we know a significant percentage of our readers do make house calls, and I'm always interested in writing about residential-service issues and hearing from readers involved in that segment of the industry.
The weeklong event at the Rio All-Suite Hotel and Casino, sponsored by the Sheet Metal Workers union and the Sheet Metal and Air Conditioning Contractors' National Association, had a number of seminars on residential service and what does and doesn't work. We'll be including coverage in future issues.
One of the discussion topics was flat-rate pricing. In case you're not familiar with the concept, contractors who use this pricing system charge customers a set fee for repairs or other services, instead of the traditional time-and-materials method.
By the book
A lot of contractors like the system. Instead of giving customers a guess as to how much a repair will cost, service technicians simply consult a price book. Since customers know the price before work begins, there shouldn't be any surprises when they're handed the bill.
Supporters of the system also say it should ensure the owners of well-run businesses a fair profit.
Readers would be able to say if that's true better than I would, but as a homeowner, I like flat-rate pricing. I recently had a chance to use a flat-rate contractor for some plumbing work in my bathroom.
My 50-year-old home's bathtub faucet was leaking badly. It seemed as if almost as much water was running from the faucet when I was out of the tub as when I was in it. While some members of my family are good with plumbing and household repairs, I'm not among them.
I called several contractors for an estimate, but hired the company that offered the flat rate, simply because there were no surprises. The company's prices were the same seven days a week, excluding holidays. I liked that.
Like many consumers, I've felt abused by contractors and auto mechanics whose final bills were several hundred dollars above their original estimates. I'm not implying that anyone who ever worked on my home or car was dishonest. But if you're mentally prepared to pay a set amount, a final bill 30 percent to 50 percent higher can make you mad.
Was the amount this contractor charged me the lowest? Probably not, but I didn't care. The company wasn't perfect - they were more than an hour late to the appointment, even with a two-hour window. But as for the work, I knew exactly what I was getting and paying. To me, that was worth any premium.
Readers, what do you think of flat-rate pricing? I know some contractors swear by it, while others say it doesn't work for them. If you perform residential work, write and let me know your opinion. As always, contact me at BNP Media, SNIPS magazine, 2401 W. Big Beaver Road, Suite 700, Troy, MI 48084. You can also e-mail me at firstname.lastname@example.org.
Be sure to include the name of your company and how long it's been in business, along with your phone number. Reponses may be published in a future issue.
A lot of contractors like flat-rate pricing. Instead of giving customers a guess as to how much a repair will cost, service technicians simply consult a price book. Since customers know the price before work begins, there shouldn't be any surprises when they're handed the bill.