Should You Go with Flat-Rate Pricing?

Now and then, as a contractor, you may come across helpful HVAC business ideas. Flat-rate pricing should be at the top of the list! Why? Because flat-rate pricing is the way you should be selling your products and services. Using a time and material type price system is old news. It’s time for you to get the value out of your services that you deserve!

The Benefits of Flat-Rate Pricing

A Clear Price

With flat-rate pricing, we take the cost of the part, plus the cost of the labor and formulate a price. This will present one clear price to the customer for the repair. In this format, the customer doesn’t have to worry about how much time the technician is at their home; instead, they’ll get one easy, flat rate right then and there.

A Simple Sale

The point of flat-rate pricing is to simplify your selling process while producing fast and accurate rates. It gives your customer just the right amount of information about products without them second-guessing pricing or services. Instead of the customer seeing brands and different types of products, they’ll just see one image and a description that’s pre-filled out for you.

A Quick Result

When the information is already in the system, there’s nothing left for you to do except close the sale. Once you put in the cost and the time it takes to complete the job, it will auto populate a price based on how much you want to make for that particular part.

A Great Experience

The flat-rate pricing process gives your customers a great experience, especially when they can see what it is that they’re buying without too much information to overwhelm them. No matter what you pay for the parts you’re selling your customers, you can still sell them at profitable rates. 

How Flat-Rate Pricing Can Work for You  

We understand you may feel that you’re overcharging your customers or taking advantage of them with flat-rate pricing. You may even believe that your customers won’t go for this approach, but it’s quite the contrary! Consumers are used to making purchases based on flat rate. No one gets their oil changed and asks how much the oil cost, or buys a car and wants to know how much the engine cost.

Most HVAC companies that are on a time and material type price system cannot put $136 on the ticket. The customer would think you are out of your mind! At the same time, you need a way to be compensated for the gas to get to the job, the labor to do the job, and the parts you use to successfully complete it. Most customers understand, and those who don’t aren’t your target customer.

Using a flat rate is key to successful HVAC business management and getting the revenue you deserve. 

Here is an example of how the breakdown for a capacitor and labor would look. Say that the cost of the part  ($10) + the markup for that part (600%) + the labor to perform the repair (1 hour) + the labor rate of the company ($150) = total repair costs.

We use the following formula (and time is not a factor):  

The Formula and Calculation

Capacitor $10 x 600% = $60

Labor $150 x 1 = $150

Cost of part = $60

PLUS

Cost of Labor $150

TOTAL REPAIR:  $210 + the diagnostic fee

Start Using Flat-Rate Pricing Today!  

Flat-rate pricing is easy, simple, fast, and accurate. It means minimal confusion for your customers and maximum revenue for your HVAC business. To learn more about successful HVAC business management, call us today at 904-299-8103 or schedule a free HVAC business software demo!