Start Making Money in 2011 using Flat Rate Pricing

…..a key to contractor profitability.

Mike Hajduk, President

Jeremy Lowe, Database Administrator

CALLAHAN ROACH and

dESCO

Long Relationship – dating back to the early 1990’s

Flexibility of flat rate usage. Books or mobile.

It works!

Who is Callahan Roach Business Solutions?

Started flat rate in HVAC in 1989.

Segment leader.

Sold over 5,000 dealers CAP™ flat rate.

Trained hundreds of contractors.

Who is Callahan Roach Business Solutions?

Consulted with industries largest and most successful dealers.

Recognized as having the most robust database of flat rate repairs.

Serves 3 industries.

Why flat rate as a linchpin?

91% of all American homeowners want to have their service company offer flat rate.

25% of service companies go out of business each year…

Low Net Margins should not be fixed by beating up suppliers about pricing.

Many HVAC contractors set their service prices to lose money.

…Pricing errors are easy to fix with flat rate.

So what is flat rate pricing?

Flat rate pricing is the technician offering the customer a no surprises single price to make repairs on their HVAC system, before the job is started.

What we know it is:Way to get enough for your labor and parts to make a profit

Allows you to take the focus AWAY from your price and place it on your SERVICE and company QUALITY

Show the customer that you have the capability to repair and install complex systems

Matt Michel’s“The Power of Positive Pricing”

Published by ServiceNationPress.com

Flat Rate Myths

Matt’s Flat Rate Myths

Flat “Rape” Myth

Technician Resistance Myth

The “Perfection” Myth

The “One Long Job” Myth

The “I can do it better myself” Myth

Theatrics

It is a tool to show that your company is head and shoulders better than the competition.

Merchandising of Your Service

You compete with Macy’s, Kroger, Target etc., for your customer’s “eye”.

How to Merchandise your Company

Uniforms

Work Orders

Booties, drop cloths, cleaning work area

Flat Rate Manual or Mobile Device

Pictures of equipment and/or parts

Your Truck

Building Value in Service Invoices

Database Administrator, Technical Training, CTO, etc, etc, etc.

Jeremy Lowe

Highlights

1. What the customer wants and perceives as value.

2. What an improperly completed invoice is.

3. What a correctly completed invoice looks like, why it is important, and how a properly completed invoice builds value

4. How to explain multiple repairs so that a customer understands the need to invest in their equipment now rather than later.

Service Tickets

All Service Companies Need To Increase The Dollar Revenue Of Their Service Tickets to Remain in Business

No Company Wants To “Gouge” Consumers Or “Take Advantage” Of Them

Many Consumers Need Multiple Repairs Yet We Fear The Price May Scare Them Away

How Do We Deal With Customers That Have Want

The Cheapest Price?

Repair Under the Diagnostic ?

It Is a Diagnostic Only Charge

We Are Not Giving The Customer a Break

We Are However Breaking the Company!

Bad Mojo

WHY CHARGE SO MUCH?

Running a business is EXPENSIVE!Labor drives overhead thus unapplied time

means we must charge moreOther hidden expenses must be covered

so our company makes a profitNo profit, no jobs!List cost of business.......

Other Expenses

Insurance For Employees

Business Insurance

RentUtilitiesAdvertisingTrainingWorkers

Compensation

ConsumablesToolsCommunicationsTaxesFuelLicensesWarrantiesEmployee Benefits

DIAGNOSTICS

Not a profit centerA charge customers understand if

explained properlyCan’t make repairs under this chargeDoes not cover the expense of getting you

to the door!Devalues our service if we make repairs as

part of diagnostics

DIAGNOSTICSHigh liability when we “Diagnose”Always finish a diagnosticYou touch it you bought it!Failure to do so is a liabilityFailure to do so is costing you

customersFailure to do so can be laziness!

How Do We Deal With Customers That Have Multiple Problems

When We Do The Diagnostic, But Only Want The Cheapest Price?

We Must Understand What Customers

Really Want!

Understand Your Customer

“I Want A Fair Price!”

“I Want To Trust My Repair Company!”

“I Want It Repaired Right The First Time!”

“I Want To Understand What My Servicer Is Doing To My Home”

All People WantBasic Human NeedTime Is Valuable

and Multiple Repairs May Indicate Inexperience

Consumers Fear What they Do Not Understand And Can’t Explain Well To Others

Flat Rate Service Pricing

• Giving Customers a Fair Price that is in Black & White From a Printed Book

• Customers Feel They Can Trust a Servicer Who is Thorough

• Doing a Complete Diagnostic Allows us to Recommend all the Repairs Up Front

• Using Tear Off Pads and Detail on our Invoices Builds Trust in us and the Company!

Flat Rate Builds Trust And If Used Properly Reduces Post Shopping Complaints

About Price

Neat And Thoroughly Completed Service Tickets With

Good Diagnostic Procedures Reduce Callbacks And Increases

Consumers Understanding Of Recommended Repairs

Perceived Value

What Value Does Your Diagnostic Hold?

Understand Your Customer

“I Want A Fair Price!”

“I Want To Trust My Repair Company!”

“I Want It Repaired Right The First Time!”

“I Want To Understand What My Servicer Is Doing To My Home”

All People WantBasic Human NeedTime Is Valuable

and Multiple Repairs May Indicate Inexperience

Consumers Fear What they Do Not Understand And Can’t Explain Well To Others

A Service Scenario

Bad start Capacitor on motorLeaking service valve capSafety is by passedNeeds refrigerantOld mercury thermostatContactor seriously pitted

What to Do?

Always recommend all legitimate repairsLet the customer decide what they

want to doGive your professional opinion if askedDO NOT REPAIR ANYTHING AS PART

OF A DIAGNOSTIC!!!Offer discounts on multiple repairs

Observe!

Leaving an item that “Still Works” but is obviously going to fail or is broken is bad business

It is not what customers want even if we feel we are “saving” them money by encouraging the unit to RUN TO FAIL.

When A Customer Understands The Value Of Making Multiple Service Repairs At One Time

They Will Make The Investment In Their Home Heating System

Did The Customer Perceive Any Value In The

Diagnostic Procedure?

TECHNICIANS PERCEPTIONS

Not Enough Time!“I can’t do a good diagnostic because the

office gives me way too many calls!”“There is way too much stuff to check!”“We have no where to mark what we

check on our invoices!”

A Completed Service Ticket and a Thorough

Evaluation Reduces Complaints

To Build Value

TAKE the time to lookBe thoroughShow the customer the price in your

book.Look for predictive repairsLook for preventative repairsBe prepared to suggest upgradesUnderstand what customers want!

What Does The Customer See?

Summary Explanation

Bad Capacitor2 Pole Contactor1 Lb R22Tighten FittingO- RingDiagnostic

Total

$118.00$102.00 $29.00 $24.00 $16.00$209.85

$498.85

$118.00 $92.00 $26.00 $22.00 $0.00 $69.95

$327.95

$100.00 $78.00 $22.00 $18.00 $0.00 $69.95

$287.95

What Does The Customer See?

$498 expense verses a $287 investment with an agreement

Perceived Value

For A Small Investment Now The Customer Has Peace Of Mind For The Future

They Can Enjoy Their System With True Peace of Mind

Being Preventative Reduces Future Expenses Leaving More Money In Their Pockets In The Future For Other Uses

Perceived Value

What Do You See?

Value building starts at the door!

Perception

What is the customers perception of you?

The Company?The service the received?The value?

PERCEPTIONS

People make multiple assumptions about us in the first few seconds!

We either prove their assumptions right or wrong

Visual clues are important to perception as is voice and tone

Perceptions can be changed!

Make What They See Valuable!

Questions and discussion regarding our alliance?

Desco – Callahan Roach worksFlat rate as a merchandising toolThorough DiagnosticsBe proactive with recommendationsComplete and neat work ordersValue building starts at the doorContact us for consultation1-800-528-0212