How may price columns should I have in my Flat Rate Book?
We usually recommend no more than two pricing columns. More price columns can confuse your clients and techs, and reduce the effectiveness of the entire Price Book.
We recommend that your Value Rate or Standard price column should be your breakeven plus your desired profit margin. Your second price column can be discounted from your Standard price column as a tool to sell your service club or service agreement plans.
What is Value Based pricing?
We recommend that most companies use value based pricing rather than using multiple price columns on the same Task. Value based pricing allows your techs to offer your clients a range of choices based on quality and features rather than simply price.
Value based pricing can include a number of offer strategies based on a combination of features, quality and warranty. For example, on a toilet repair:
- The Best Option could include a fill valve, tank seal, tank handle, water supply tube, stop valve, and a full 3 year warranty.
- The Better Option could include a fill valve, tank seal, and water supply tube, and a 1 year warranty.
- The Good Option could be just a quick fix with a tank seal and fill valve only, and a 30-90 day warranty.
This type of pricing strategy is much easier to understand and to sell than multiple price columns for each Task.
How Do I Increase my Additional Task per Call Average?
What we have discovered over the last 15 years while working with hundreds of profitable service companies is that offering a discount for additional work often does not increase the average task per call for most service companies we tracked.
Asking questions does a better job in driving the average Task per call number higher. Ask Questions, Ask Permission. Offer to solve potential problems, before they become urgent problems.
Here’s what we have found works best in most cases. Train you technicians to address your client’s primary problem first by offering several value based options to fix that primary problem. Let the client choose and commit to the option they deem appropriate. Now have your technician ask three prepared questions that address potential future problems that may be in need of attention. This alone will increase your average task per call number without offering discounts.
How do I identify my price sensitive Tasks?
This is a very important part of maximizing your potential with your Price Guides. When you track your key performance indicators like tech close ratios, client satisfaction, and customer complaint calls, you should be able to identify a list of specific Tasks that continually show up as price problems in these reports.
Once these price sensitive Tasks have been identified, you can determine a price point that needs to be met. Then you can build value based repair Tasks that may include a loss leader at the lowest price option. Be sure to build the middle option to be your target sweet spot price.
Give Mike Conroy a call. He can quickly walk you through the business basics that you need to help make your business more consistently profitable. Take advantage of his experience working with hundreds of companies like yours to help you achieve your own business success.