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yet another long-winded flatrate debate

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  • #31
    Re: yet another long-winded flatrate debate

    Originally posted by Service Guy View Post
    That is your choice. If something takes me two minutes, and I am there doing other work, I often tell the customer it is "on the house."
    That is why it is nice to have work done by a guy who owns his own business. He can adjust his charges as he sees fit (e.g., if it is a $350 charge for the mainline that PC said; if you own the business you can reduce that charge). Obviously, if you agree to pay $350 and they do the job, you should pay it without complaining, but that doesn't mean you'll want to repeat the experience.

    Not to pick on Bryan [but then of course picking on him], but if you look at his flat rate manual, the difference between resetting a toilet and w/ and w/o a new flex connector is $65; yet in each case it takes the journeyman 60 minutes. IMO, if you look at that flex connector in isolation it is probably not worth $65.

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    • #32
      Re: yet another long-winded flatrate debate

      Originally posted by cpw View Post
      That is why it is nice to have work done by a guy who owns his own business. He can adjust his charges as he sees fit (e.g., if it is a $350 charge for the mainline that PC said; if you own the business you can reduce that charge). Obviously, if you agree to pay $350 and they do the job, you should pay it without complaining, but that doesn't mean you'll want to repeat the experience.

      Not to pick on Bryan [but then of course picking on him], but if you look at his flat rate manual, the difference between resetting a toilet and w/ and w/o a new flex connector is $65; yet in each case it takes the journeyman 60 minutes. IMO, if you look at that flex connector in isolation it is probably not worth $65.
      CPW: Do you think the customer gets to know that the last 4 digits is the time to complete the task... If they did they would clock watch ya and expect a price adjustment These numbers are just used to program and schedule the work and include a certain amount of nonproductive time.

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      • #33
        Re: yet another long-winded flatrate debate

        Originally posted by OkieBill View Post
        CPW: Do you think the customer gets to know that the last 4 digits is the time to complete the task... If they did they would clock watch ya and expect a price adjustment These numbers are just used to program and schedule the work and include a certain amount of nonproductive time.
        No, I don't think they know it; but I'm just pointing it out for arguments sake. The customer can also win here; if the job is hard for some reason the flat rater should stick to that price. (In my mind, basically the customer is charged a premium for shifting the risk that the job is harder than expected to the plumber. Of course, the question is whether that premium is worth it.)

        The customer never sees any part of the book, except the price they are getting charged; so they wont' see this inconsistency anyway. Otherwise, how would you justify a flex line costs is $65? This really shouldn't be any more labor, because you've already disconnected the original. It is just another part.

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        • #34
          Re: yet another long-winded flatrate debate

          Originally posted by cpw View Post
          Otherwise, how would you justify a flex line costs is $65?
          Apparently he uses a really nice flex line.
          Water Heater Reviews & Water Heater Information

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          • #35
            Re: yet another long-winded flatrate debate

            Originally posted by cpw View Post
            No, I don't think they know it; but I'm just pointing it out for arguments sake. The customer can also win here; if the job is hard for some reason the flat rater should stick to that price. (In my mind, basically the customer is charged a premium for shifting the risk that the job is harder than expected to the plumber. Of course, the question is whether that premium is worth it.) I agree and it appears to be a very high premium. Harder than expected dealing with unknowns like sewer clogs yes... I could not expect any type of premium for changing a toilet flapper what is the risk? The simple tasks are where flat rate shows it's weakness IMO though this is it's strength to the business owner / technician, as the majority of our tasks as service plumbers are the flapper and fluidmaster / wax ring resets (small service)

            The customer never sees any part of the book, except the price they are getting charged; so they wont' see this inconsistency anyway. Otherwise, how would you justify a flex line costs is $65? This really shouldn't be any more labor, because you've already disconnected the original. It is just another part.
            It has been my experience that with most flat rate systems the customer is shown "the or A" price book as a tool to legitimize the bill and to sell the service contract...

            These systems push the service contract to get the next call... It is all about keeping the call volume up.

            I have had more than one flat rate system try to sell me

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            • #36
              Re: yet another long-winded flatrate debate

              Originally posted by OkieBill View Post
              Very Impressive Work and a good looking list...

              I'm curious do you set this list in front of the customer then offer to sell them a service contract?

              I guess my areas rates are just alot lower than California

              I rebuilt a toilet flange on slab on Monday... Pull toilet, a little light demo hammer work, place new flange, mix and place a little hydro cement. reset toilet. In and out in 2.5 hours $200 with parts (flange, wax ring, cement, toilet bolts, shims...

              Make sure I'm pricing this right...

              Busted flange on slab & leaky flapper=
              - Remove toilet for repair and reset second repair? or would this be first repair since you have to do it first to get to the slab? lets call it first repair @$253.47

              - Repair leaky flapper (third repair) $68.22

              - Repair flange on slab (second repair) $732.54

              Total= $1054.23

              $400 bucks an hour! Thats what I'm talking about:-)
              Yes, the book is not only designed to be seen by the customer, but we demand that it is used in front of the customer. Having a book with published prices eliminates customer suspicion associated with the tech mysteriously pricing for 15 minutes in his truck and there is something about having a published price that makes people feel better. The book also allows the tech to point out that he does not set the price, which relieves him from the pressure that a customer will apply to a tech in the field for a lower price.

              Regarding your pricing scenario for the flange rebuild, you found a weak spot because I have no experience in rebuilding a flange. Consequently, I alloted 300 minutes, which it appears is too generous. So, I took your input and rearranged the part numbers a different way - by categories.

              See the attached. now the tech can choose which category he wants to use depending on the difficulty of flange rebuild. Now reprice using Category 1-5 flange rebuild
              Attached Files
              spodelee

              Until lions have their own storytellers, stories of the hunt shall always glorify the hunter

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              • #37
                Re: yet another long-winded flatrate debate

                Originally posted by spodelee View Post
                Yes, the book is not only designed to be seen by the customer, but we demand that it is used in front of the customer.
                That is one thing I haven't been doing and I need to get back to it.
                Water Heater Reviews & Water Heater Information

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                • #38
                  Re: yet another long-winded flatrate debate

                  Good call on the price flexability for the flange I think this is a great move.

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                  • #39
                    Re: yet another long-winded flatrate debate

                    When I first started my business I was tempted to go flat rate but my problem is that I am in a very small market.

                    I know all of the other plumbers in my area and we sometimes refer work to each other but I still have not been able to get a good idea on pricing the upper end tasks like sewer / gas / water line replacements.

                    I'm still trying to get my pricing in line... I believe I have been leaving a few dollars on the table...

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                    • #40
                      Re: yet another long-winded flatrate debate

                      Originally posted by Service Guy View Post
                      Apparently he uses a really nice flex line.
                      Yes, it is titanium coated flex with cryptonite connectors - really good stuff

                      Seriously though, no apologies here for a 65 flex connector. We have families to support, insurance, equipment to buy, rent, training costs, my salary... hmmm, maybe I'm not charging enough?
                      spodelee

                      Until lions have their own storytellers, stories of the hunt shall always glorify the hunter

                      Comment


                      • #41
                        Re: yet another long-winded flatrate debate

                        you already know my feelings.

                        the only flat rate i know is from customers that come to me to rescue them from a complete rip off.

                        if a flat rate company and me bid the same job, im typically 2 to 3 times less expensive.

                        i'm not sitting around for the phone to ring and i'm not starving.

                        i work for some of the richest people in town and they can afford almost anything they want. what they can't tolerate is a company with non qualified plumbers.

                        if your going to charge them 3 times more than me, then you better send them someone 3 times more qualified.

                        the large companies i run across in the area are for the most part flat rate and super expensive. but at the same time 3 times less qualified than me.

                        if your in it for the long run. then treat the customer right and you'll have more work than you can handle.

                        i rarley have to bid any jobs. i don't look at jobs, i do jobs. i don't look in a book to figure out what a job should cost. i know how long a job takes and i charge for my time and my materials.

                        like dunbar mentioned. switching to flat rate will have a 2/3 drop in established customers.

                        i turn down jobs because i chose too. not because the customer choses someone else.

                        if a flate rate company can break down their real cost and justify them, fine. but so far all i see and hear is flat rate hides the real cost.

                        by the way, i charge $6.00 for a 12'' flex and $8.00 for a 20'' flex.

                        at $65 a flex the flexes would cost more than the faucet the customer just bought this is when the customer will tell you to pack your stuff. they know what the faucet they bought cost, they know the connector is not $65. each.
                        my flexes come 25 to a box. i have at least 12 boxes in stock. that's 300 flexes at $65 each $19,500 in flexes for a $900. investment

                        keep it reallistic and then it won't be so out of line with reality.

                        i didn't get where i am today by a get rich quick book.

                        is this any different than what you would have expected me to say

                        rick.
                        phoebe it is

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                        • #42
                          Re: yet another long-winded flatrate debate

                          I agree with Rick , My Customers would shoot me , most of the time they , don't want a price , they just want the job done right the first time , I tried the flat rate thing 10 years ago , it didn't work , went back to T&M , been happy ever since , I do't have to bring in big price books & so them ect , Just do the job & so them the invoce when i am finished

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                          • #43
                            Re: yet another long-winded flatrate debate

                            Originally posted by RHplumbing View Post
                            I agree with Rick , My Customers would shoot me , most of the time they , don't want a price , they just want the job done right the first time , I tried the flat rate thing 10 years ago , it didn't work , went back to T&M , been happy ever since , I do't have to bring in big price books & so them ect , Just do the job & so them the invoce when i am finished
                            Welcome to the site.

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

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

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                            • #44
                              Re: yet another long-winded flatrate debate

                              Good post Rick. I understand your perspective and it is a respectable one. I don't agree with your conclusion, but I do agree with some of your points.
                              As usual, you and I don't see things the same, but we both have the best intentions with what we do and that is why we have loyal customers.

                              I do agree with your point, that a lot of big companies are charging very inflated prices in their flatrate book, and yet they send out unqualified apprentices out to do the job of a master plumber....that kind of thing is all too common and it is not a dishonest business model imo.

                              As far as "switching to flatrate will have you drop 2/3 of existing customers," I doubt that, unless your new prices were dramatically higher than your old. That would happen even if you stayed T&M but suddenly raised your rates too.
                              For example, if a company is charging $75/hour and suddenly switches to flatrate, and calculates their new flat-rate book using $110/hour, of course they will get objections to the higher prices. I think it would also happen, if they didn't switch from T&M, but just suddenly went up to $110/hour overnight.
                              If the company stayed at $75/hour, and used that same number to figure the flatrate, then they would not see objections from old clients.

                              I would know...I STARTED my company flatrate from my very first customer and I am doing just fine, lots of repeat business and referrals. I admit I am relatively expensive for my local area, but a lot of my competition are a bit "backwoods" and they charge just enough to put gas in the truck ...I am not interested in competing on price with them. Lets just say that where I live is dramatically different than where you live Rick! You would have to see it here to truly understand the very different market dynamics.
                              I am sure L.A. is filled with slick big-name companies charging up the wazoo with their price-books, but here in the mountians, we get a lot of guys working out of a beatup truck, for peanuts.
                              Water Heater Reviews & Water Heater Information

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                              • #45
                                Re: yet another long-winded flatrate debate

                                I am new here and don't want to step on any toes or "brand" myself but I like flat rate. I reluctantly changed 5 years ago with my wife's push and haven't looked back or regretted it for a minute.

                                I am a firm the believer in the fact that you have to want to make it work. I didn't but I instructed my employees to make it work and they did. They loved it and I in turn jumped on board.

                                We lost a few, converted a few and the rest just fell in line.

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