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Increasing my prices.

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  • Increasing my prices.

    I started my own residential service business last year and I have noticed a common trend.
    Price is not the problem, the going out on 'free estimates' and 5-10% of the time getting to a cheapo-HO's house is. 90%+ of my customer's never give me any price-objection as I am a very confident, skilled service plumber who knows all about presentation and professionalism. But the small minority 'price-shoppers' that ask "what's your rate?" on the phone before they even say their name or any other info. are getting on my nerves.
    The last straw was a couple of days ago, a nice gentleman called me with a leaky toilet and I made an appointment to meet him within 45 minutes. I show up, put on my shoe-covers and make some small-talk, he shows me the toilet, the fill-valve is leaking, spraying everywhere when it fills, one bolt is holding the toilet down and the other bolt is completely free... the house is 50 years old and I can tell a broken closet flange when I see a toilet that loose.
    I tell him I will have to replace the fill-valve and supply, pull the toilet, repair the flange and reset the toilet with a new seal and bolts...problem solved. I tell him I'll be right back and go the truck to get my price-book and make sure I have a new flange. I come in and tell him teh total will be around $226 for all parts and labor.
    He immediately says, "THATS TOO HIGH!, all you have to do is reset the toilet with a new seal!"
    I say, "Well, I also have to replace the fillvalve and supply, and repair the broken flange which will have to be screwed to the tile and concrete and/or wood underneath, so its actually very reasonable."
    He says, "That's way too high, its not that hard, I could do it myself."
    I say, "Well what do you think it should be?"
    He says, "I don't know, maybe $125?"
    I say, "Alright, well if you want to get other bids go ahead, call me if you change your mind."

    THATS IT!!! No more free estimates, I haven't decided how much but I am implementing a minimum service charge, trip charge, whatever on EVERY call!

    I have been doing service plumbing 10 years and I have noticed that the NUMBER doesn't matter. Customer A will always complain wether you say $200 or $100, customer B will always agree wether its $200 or $100.
    Bottom line is this: ITS NOT THE PRICE, ITS THE CUSTOMER! This obvious fact eluded me all these years, but I have finally awoke.
    No matter what I charge, 90-95% of my customers will like my service and agree to the terms. And no matter what I charge, 5-10% of my customers will bi*ch and moan.

    So I am raising my rate immediately, its time to make some decent money and stop worrying about the price-shoppers out there. They don't contribute anything to my busniess anyway.

    P.S.- I bet the guy calls me back after calling around, as I am very competitive for this area, and its happened to me before many times. When he does call, I'll tell him we've had a price-increase.
    Last edited by Service Guy; 02-21-2008, 01:11 AM.
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  • #2
    Re: Increasing my prices.

    He won't call back, for starters he has his ego, but also he'll likely find the neighbors 18 year old that was a "plumber" before he quit and went to work at Burger Kings.
    Then weeks later when he see's spots on the ceiling below he'll call someone else to avoid the potential insult to his ego and pay more than you quoted in the first place.
    You're right to charge a minimum service fee for scheduled jobs.
    ALso, the $226 isn't a bad price at all for a tank rebuild and flange replacement.
    Good for you for not folding.

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    • #3
      Re: Increasing my prices.

      Thanks. I never negotiate. Its bad business.
      Water Heater Reviews & Water Heater Information

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      • #4
        Re: Increasing my prices.

        I am with you 100% on this. I've been in business just over a year, and find the small amount of service plumbing that we do is full of price shoppers. After about 6 months we started charging a 50 dollar "dispatch" fee to new customers who were requesting estimates. We only charge this to customers we haven't worked for before, and most have become repeat customers since the first visit. We also waive the fee if we end up getting the job. i find it works pretty good to weed out the price shoppers

        I know this will probably garner some criticism from the forum pundits, but as of 2008 we also started charging a 2 hour minimum to our commercial/Industrial clients.
        West Trail Mechanical Ltd
        Service. Commitment. Expertise.

        www.westtrailmechanical.ca

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        • #5
          Re: Increasing my prices.

          Originally posted by bigPipe09 View Post
          I am with you 100% on this. I've been in business just over a year, and find the small amount of service plumbing that we do is full of price shoppers. After about 6 months we started charging a 50 dollar "dispatch" fee to new customers who were requesting estimates. We only charge this to customers we haven't worked for before, and most have become repeat customers since the first visit. We also waive the fee if we end up getting the job. i find it works pretty good to weed out the price shoppers

          I know this will probably garner some criticism from the forum pundits, but as of 2008 we also started charging a 2 hour minimum to our commercial/Industrial clients.
          Sounds good to me.
          THE GLASS IS ALWAYS HALF FULL

          Comment


          • #6
            Re: Increasing my prices.

            Why not charge for the service call and if the consumer trys to argue over the price, offer him an instructional video at a fair price. This way after watching he'll appreciate the work involved, or still think he can do it himself. Either way, you made some money and will probably get called back once he realizes the difference between watching someone do a job and doing it yourself. As a homeowner and DIY'er I know the difference between how easy a Pro can make a job seem and actually having the tools in my hands and responsibility on my shoulders. If anything encourage them to save money and give it a go since it doesn't seem like much work for what you want to charge. Once they screw it up your prices won't be so high.

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            • #7
              Re: Increasing my prices.

              Originally posted by bigPipe09 View Post
              I am with you 100% on this. I've been in business just over a year, and find the small amount of service plumbing that we do is full of price shoppers. After about 6 months we started charging a 50 dollar "dispatch" fee to new customers who were requesting estimates. We only charge this to customers we haven't worked for before, and most have become repeat customers since the first visit. We also waive the fee if we end up getting the job. i find it works pretty good to weed out the price shoppers

              I know this will probably garner some criticism from the forum pundits, but as of 2008 we also started charging a 2 hour minimum to our commercial/Industrial clients.
              No argument from me.

              Comment


              • #8
                Re: Increasing my prices.

                Our "free estimates" were limited to over the phone except for new construction and remodels.

                Mark
                "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                I never lost a cent on the jobs I didn't get!

                Comment


                • #9
                  Re: Increasing my prices.

                  Originally posted by ToUtahNow View Post
                  Our "free estimates" were limited to over the phone except for new construction and remodels.

                  Mark
                  Sounds like a plan. Toilet guy could have been priced on the phone without the trip, as with most price shoppers. What a great deal for them if you actually go out to see them, spend your time and gas, especially if it's raining or a snowstorm. Then they say no to your price Then you have to leave. They never have to move from the house.

                  They are not worth your time, money, or expertise. Price 'em on the phone and, like others have said, tell them it's a minimum charge of at least an hour. Any time I've called for a repair I assume at least an hour.....does your doctor/dentist/lawyer etc. expect expect to bill you for any less?

                  You shouldn't either.
                  I'm on "The List" and I love it!!

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                  • #10
                    Re: Increasing my prices.

                    anytime i need to look at something for a free estimate, it's on my sch. at a time when i'm in the neighborhood.

                    if it involves crawling, it's not a free estimate.

                    truthfully less than 1% of my jobs are an estimate. these are typically jetting buildings where i need to get a c/o count. if i've already jetted the building in the past, i just look at my past estimate and check my real working time. adjust if needed.

                    i give an estimate before i do the job, but i do the job while i'm there.

                    rick.
                    phoebe it is

                    Comment


                    • #11
                      Re: Increasing my prices.

                      I get price-shoppers at least 5 times a day. I know if they are asking for a price then I could tell em it`s free and they would ask me how much am I gonna pay em to work at their house. I get so sick of these tire kickers. 90% of my people never ask for price, they just say HELP ME please!

                      if you want a price I jack it up to cover my butt, if you want me to fix your problem I only charge for my time No Free estimate other then, big replacements or on the phone cover my butt price
                      http://www.all-clear-sewer.com/

                      Comment


                      • #12
                        Once again!`

                        I go to the foot doctor this morning thinking I'm going to be spending 100's of dollars having a bone spur removed. Been practically limping for months all because I've procrastinated badly.

                        Get there, $50 later he cuts out a cyst, not a spur and injects me with cortisone! Woooohoooooo!!! If I could get cortisone on the black market I'd do it! (for my knees)


                        Hour later and I feel like a marathon runner realizing how stoopid I was putting off something so simple. Soooo, I go on a shopping spree with all this money I've saved for the expense of the foot doctor.

                        $70 gift certificate to the foot doctor to say thank you for treating me so good. He deserved it.


                        $200 worth of dog food/phones/plastic drop cloths/shop lights and now I'm feeling a little guilty, call comes in.


                        "Ring ring! Ring ring!"


                        80 gallon electric water heater replacement, old one coming out is a great deal smaller than the new one going in. She red flags me for charging $10 more for the permit (I do this for my time on the internet filling the application out) because it's par for the course. All I've been doing lately is turning away wather heater calls and since I just wanted to recoup my spending, I feel inclined to give in to temptation.

                        She tries to commit me to $250 which includes the permit fee. I tell her that haul away is extra, along with any work other than a regular switch out. I should of hung up the phone right there.

                        We go back and forth a little and she's hesitating to tell me that there's a "pipe" in the way from getting the old one out.

                        "Is it a gas line or a condensation line?" << Next to the furnace.

                        "I can't tell. So you're telling me this won't be over 3 hours?"

                        She totally ignores the confusion regarding that pipe blocking the removal of the heater....

                        "Yes. 3 hours unless we have to rework/remove piping to get the new water heater in."

                        "Oooohkay then. My husband says that there's a couple inches that you'll have to get this in. Let me call you back with measurements and let you know from there."

                        Been an hour; no call. They won't be calling me back because you can tell with the attitude on the other end of the phone..

                        I gots a fix


                        From now on, when I get a price shopper over the phone, I usually end up with a home phone number which leads to an address. If it is a cell phone, plan B.

                        I'll give them a few days to call me back, then I'm releasing the hounds. I'm going to sell their address & phone number to these free coupon websites along with a select few other "not going to mention" sites that are notorious for making litter of your mailbox or phone.

                        You waste my time, I'll now make a point with a few clicks of a mouse to make sure that you experience what was given to me; a waste a time. Maybe throw in a magazine subscription that says "Bill me later"

                        My new program starts today, time they feel my luerve

                        Very hard to get off those mailing lists once you're on them too. Woot! Woot!

                        Go ahead and criticize; there'll be silent cheerleaders to my cause that gives precedence to my hardship shared by many. All I wanted to do was pay off my shopping spree DAMN!!!!
                        Last edited by DUNBAR PLUMBING; 02-21-2008, 02:38 PM.
                        Northern Kentucky Plumbers Twitter Feed | Plumbing Videos

                        Comment


                        • #13
                          Re: Increasing my prices.

                          when the tire kickers call i tell them that a simple blockage typically runs between $150.00 and $225.00. if there are complications the cost will probably go up. if they want a "flat rate" it will be $350.00, if i am there for only 1/2 hour or all day.

                          the "flat rate" is something i've added recently and so far no one has opted for it.

                          i charge more per hour than my competition and still get out quicker than they do and/or do a more thurough job.

                          sometimes i loose a job to a plumber with a top snake and a plunger, but more often than not i get the original call or the "my plumber couldn't fix it" call. most don't do cleaning calls.

                          steve
                          In the never ending struggle to keep the water flowing.... The Poo Poo Cowboy rides again!!!

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                          • #14
                            Re: Increasing my prices.

                            Thanks for the support guys. Around here many people are used to 'free estimates' and complain about paying a trip fee or paying by the hour for drive time. Of course many smart companies are doing it anyway, because traffic is just getting worse and 'windshield' time has to be payed for by somebody.
                            I am an upfront pricing guy and I hate pricing over the phone because 9 times out of 10, the customer describes the problem totally inaccurately. I actually had a guy tell me on the phone his 'distribution box' needed to be replaced, so I am thinking he has a septic problem, I get out there and he points to his well pump pressure-switch!!!

                            So I am going with this (for new customers), "There is a $20 fee to come out and inspect the job, we'll give you a price upfront after assessing the work needed. I can't price your particular job without looking at it, but I can tell you that a basic service call is $80." (basic service meaning less than an hour with driving.)
                            That should weed out the people who just want someone to work for peanuts.
                            In my experience, as I said before, those types of customer's never end up contributing anything positive to the business anyway, so I'd rather turn them away then let them waste my precious time and gas.
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                            • #15
                              Re: Increasing my prices.

                              Do the 1/3 1/3 1/3 rule when giving a paid estimate;


                              20 minutes to the job
                              20 minutes for the estimate
                              20 minutes for the trip back

                              I've given paid estimates and it's funny how they

                              like to get an hour and a half for an hour estimate.

                              A lady called monday,

                              "I'm calling to get a free estimate for my insurance company. When can you come out?"

                              "Ma'am, we don't do free estimates."

                              "Well, how much do you charge for an estimate?"

                              "$70 which is refunded to you when the work is done."

                              "Well, Thank you for-CLICK!


                              I hung up on her, felt good like a foot rub.
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