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Why Flat-Rate Pricing?

Aug 29 • Sales • 3077 Views • No Comments on Why Flat-Rate Pricing? • By Tyler Moran

Do you find yourself at a loss when it comes to implementing a fair and attractive price structure for your HVAC or plumbing business?

Are you struggling to find a way to plug all the profit leaking holes in your company?

Are you asking yourself the same questions over and over again?

  • How do I maximize profitability?
  • How can I get the homeowner on my side?
  • How do I stop pricing disputes before they start?
  • How can I standardize the sales process for my techs?

The answer to all these questions could be a flat-rate pricing model.

Flat-rate pricing refers to a pricing structure that charges a single fixed fee for a service, regardless of usage.

Flat Rates Maximize Productivity

One big time advantage of flat-rate pricing models is that they reward productivity. When a business is paid a flat rate for finishing a job, it can make more money by performing additional services in a shorter amount of time. This makes owners focused on finding ways to deliver as much value as possible as quickly as possible, something the customer tends to benefit from immensely. On the other hand, hourly pricing for services rendered does nothing to encourage extra productivity. Contractors that charge by the hour earn the same amount for a single day of work regardless of effort.

Transparency

Another advantage of a flat-rate pricing model that customers can really get behind is that flat fees are transparent and easy to understand. No hidden surcharges or overtime nonsense. For instance, if a plumbing outfit charges a flat rate for basic drain cleaning, customers can easily determine if the service is in their price range or not. However, with hourly rates, customers might be agreeing to a service that quickly becomes way more expensive than they initially believed.

Still not convinced?

Here are the top 6 reasons that your HVAC and/or plumbing company should be using fixed-rate pricing:

  1. You’ll make more on average per job because the same rate applies to both your most experienced and fastest working technician and your least knowledgeable and slowest tech.
  2. No more itemizing of HVAC and plumbing invoices. Everyone agrees on the price before work ever begins so receipt disputes are null with flat-rate pricing.
  3. No ‘sticker shock’ for homeowners. Your techs have already told them upfront what to expect price-wise.
  4. Customers will love knowing they’re paying the same rate as everyone else you’ve done the job for. No one likes getting ripped off and with flat-rate pricing, it’s a guarantee that you’re getting a fair shake.
  5. Bills for services rendered are typically collected much earlier than in hourly job scenarios. The customer has already figured out before the work begins how and when payment will be delivered.
  6. Standardized flat-rate pricing makes life for your technicians a whole lot easier. A single, fixed price is impossible to forget, a lot easier to explain and is pretty much guaranteed to please the customer, as well.

If properly implemented into your HVAC or plumbing company’s sales strategy, flat-rate pricing has the power to change the way you do business, while also growing your client base to new heights!

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Tyler Moran

Content Marketing Manager at Sales and Service Media Group
Tyler is the content marketing manager for The Service Coach. He is a graduate of the University of Vermont and is currently pursuing a degree in digital media from Emerson College. He lives in Boston, Massachusetts where he loves to read, write and enjoy the outdoors with his dog, Otto.

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