You all ready know how I feel about consistency in your business. One of the most empowering thing you can do in your business is to standardize your pricing.
Standardizing, allows your technicians to work independent of your supervision and makes sure that your customers are billed the same amount. This a huge factor in keeping customers happy. Since I like to use the example of a water heater here is a graphic example.
For the last 50 years most service companies have done work on a time and material basis. Now this works for most business until they find out that they need to charge much more than $150 per hour to cover their overhead.
But that is another topic for now lets just stick to the principle of pricing things consistently.
Most shops have decided long ago that they need to have an installed price for a water heater. This example shows why.
Since each Technician has a different set of skills and the time it takes him can very, our example uses Bob a new journeyman and Tom a more experienced journeyman. When it takes Bob 4 hours to do the job, and Tom gets done in 2 hours the bills in the yellow are the results.
Mrs Jones gets billed $600 plus parts and Mrs Smith gets billed $300 plus parts. Wow, what a difference, and heaven help you if Mrs Jones and Mrs Smith ever talk to each other.
Can you hear the call from Mrs Jones when she finds out her bill is $300 more than Mrs Smith? And can you imagine what she tells everyone she knows about your company. So you do the right thing you find out the average cost and you quote both customers the same, and you don't have the issue.
Let me ask another question, if you are going to bill both customers the same amount why separate the labor and the material? If both bills are going to be the same why open the door to a comparison about what the material cost and what the labor cost? In a service business this just spells more problems.
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