Working for 17% of the ticket in residential

[John Markl]

money is your only motivator, you're in for a long and miserable life. money is your only motivator, no matter how much you make, it will never be enough.

A totally false statement. It takes a given amount of revenue to pay the bills and have something left in any business.

Anyone who claims they can run a business without any goals or objectives is either lying or delusional.

How can you possibly know if you're doing what you need to do to keep the doors open without objectives?....otherwise known as a business plan.

[John Markl]

I seem to remember the guy you quoted, as telling ME that very same thing.

Funny how one guy can spew "words of wisdom" to me, but can't follow his own advice.

Time for, "The Return of the Gas Bag".....

[ChristopherNJ]

Tune-ups must be competitively priced to get the customer to sign up.

If everyone else is selling tune-ups for $69. You can price yours at $129, but you aren't going to get much action.

Something for the OP to ponder.....

If you're running a service truck for an HVAC contractor.....you can rest assured that if you're only generating $400 per day.....at ANY pay scale or methodology....you won't be employed there very long.

My only problem with that is, at $69 your not doing a tune up. Lets face it, your not doing anything really. Which is false advertising. Be careful what you call it. Id call it a performance inspection.

[neophytes serendipity]

My only problem with that is, at $69 your not doing a tune up. Lets face it, your not doing anything really. Which is false advertising. Be careful what you call it. Id call it a performance inspection.

I have tried to say the same thing, but you have put it much clearer than I.

Unfortunately, the customers believe the false advertising.

[John Markl]

I have tried to say the same thing, but you have put it much clearer than I.

Unfortunately, the customers believe the false advertising.

So, it is price alone, that determines whether a tune up is legitimate or not?

The market sets the price for tune ups. A few are higher, a few are lower. But the vast majority are sold for what the market determines to be "the right price".

It's up to each individual company as to whether they choose to participate or not.

The tune up program has done wonders for our business. We have between 900 and 1000 names in our 3 year database.

For years, we've had about two dozen people that called twice a year to have their units "checked". Which we did for $75.00

Last spring, we started the $69.00 tune up program. We now have close to 250 folks with 1 or 2 year, prepaid agreements.

The guys have work in the slow periods, and the demand call load is lower during peak periods.

We've yet to have anyone complain that they didn't get their money's worth out of one of our tune ups....

[neophytes serendipity]

So, it is price alone, that determines whether a tune up is legitimate or not?

The market sets the price for tune ups. A few are higher, a few are lower. But the vast majority are sold for what the market determines to be "the right price".

We've yet to have anyone complain that they didn't get their money's worth out of one of our tune ups....

No, legitimacy is not determined by price. But, being able to provide whatever services you list as a "tune up" does, in a way, dictate pricing. Unless, of course, the tune ups are loss leaders in the hopes of generating future business.

I don't wholly agree with the market setting the right price. I think a more accurate description may be: "What can I offer for $69.95 and either make $ on the 'tune up' or what add ons can I sell when I am there".

The average customer has no way to measure or know whether or not they "got their money's worth" from a performance standpoint (tune-up vs check).

[Chuck]

No, legitimacy is not determined by price. But, being able to provide whatever services you list as a "tune up" does, in a way, dictate pricing. Unless, of course, the tune ups are loss leaders in the hopes of generating future business.

I don't wholly agree with the market setting the right price. I think a more accurate description may be: "What can I offer for $69.95 and either make $ on the 'tune up' or what add ons can I sell when I am there".

The average customer has no way to measure or know whether or not they "got their money's worth" from a performance standpoint (tune-up vs check).

I agree.

Setting your price by your competition is a dumb idea according to Larry Steinmetz. I can' get on youtube with this computer to get you a link.

Search for "Larry Steinmetz" on youtube and watch some of his video clips. Especially the ones on setting your price. Or "how to sell at prices higher than your competitors".

[John Markl]

When you take your dog to the vet for a 'check up', are you surprised or offended when the vet finds an issue or issues that need to be addressed?

Do they offer you options or upgrades?

I don't buy that a $69 tune up is "bogus", when it's the same as your diagnostic fee.

[neophytes serendipity]

When you take your dog to the vet for a 'check up', are you surprised or offended when the vet finds an issue or issues that need to be addressed?

Do they offer you options or upgrades?

I don't buy that a $69 tune up is "bogus", when it's the same as your diagnostic fee.

Well, I do feel that a $69 item marketed as a "tune up" that is (thinly) disguised as an up-selling tool to be bogus.

Not quite the same thing as the vet example.

Now, if a company can thoroughly perform the items on their "list", before spending time looking for stuff to sell, I'm fine with that. Unfortunately, the average homeowner does not know.

Believe it or not, I do get your point John. But, these low cost tune ups combined with the hard sell (not implying that is your practice) are giving the industry a bad name because less than honest employers are pushing the hard sell part over the "tune up" part.

I really don't think it is a because your proposed 17% commission employees will need to sell more to make it work for them... or run a whole lot of $69 tune up calls...

[John Markl]

I really don't think it is a because your proposed 17% commission employees will need to sell more to make it work for them... or run a whole lot of $69 tune up calls...

MY proposed?

It was the offer proposed to the OP.....

That being said, I'm thinking back over the jobs I've held in my life:

Paperboy.....the more papers I delivered, the more money I made.

Mowing yards....the more yards I mowed, the more money I made.

Meat Dept. at Kroger....the more meat we sold, the more hours I got.

Cotton mill.....the more sheets we turned out, the more we got paid.

Truck body plant....the higher the company profits, the higher our bonuses.

Two-man HVAC shop.....the more we billed, the more we made.

I think you get the picture. I'm sitting here wondering, why anybody who considers themselves a productive performer, would resist performance pay?

On the other hand....I've heard PLENTY of people over the years say: "I don't care, I get paid by the hour".....

[neophytes serendipity]

I guess it depends on how the performance pay scale is figured and how it changes.

Like anything else, it can be manipulated unfairly.

[wahoo]

John....ouch...you're a hard man!! Yep heard that too, way too many times!

[ChristopherNJ]

My fear with cheap "tune ups" is when I get there, and the customer tells me "oh well so and so has been doing a yearly tune up for me for super cheap"

And I always see a unit that has not had an airflow measurement, or draft measurement (pretty evident by the lack of measurement points) has a humidifier that is crudded up to the end, has coils that have never seen any sort of coil cleaning. Under/over charged. And then the customer asks, then what the hell was I paying for? The 89 point inspection has check boxes next to everything, and everything has been "checked"

[wahoo]

Just tell the customer the truth. You always get what you pay for, when you purchased a "cheap check" then that's what you got. A check is NOT a repair, and truthfully if the other company was doing their job, then they should have some kind of proof that the HO never wanted to fix anything, just have it checked, recommended to fix (with estimated cost), and then forgot it. Our prepaid program includes a clean filter, grid of Hum. (if they have one), and all the minor cleans along with up to one pound of freon if needed. Of course the other checks (flue, gas pressure, CO etc) are included also.

[ChristopherNJ]

Wahoo, that sounds like a solid program and you are offering value to your customers at any price for that. A CO check with a analyzer is worth at least $60+ in my opinion. And if you are doing all those measurements and checks you have gathered enough info to offer legitimate, and NEEDED repairs. My experience is, that some shops in my area, say they do this, but they dont, they change a filter, and check off some boxes. That sort of system I do find unethical and I object to.

[neophytes serendipity]

MY proposed?

It was the offer proposed to the OP.....

My apologies.

[Tool-Slinger]

The math works for me, but I don't think I can break it down on a public forum. I would think they provide truck at that, major tools maybe, hopefully some insurance.

[valdelocc]

John Mark, after reading some of your post here I believe you should sell your business, move to NY and get a law degree, you would make an awesome lawyer, you are in the wrong trade buddy!!

[John Markl]

John Markl, after reading some of your post here I believe you should sell your business, move to NY and get a law degree, you would make an awesome lawyer, you are in the wrong trade buddy!!

I'll take that as a compliment....

[heavytank2]

@JohnMarkl, sounds like you are the type of person who is pushing your guys to be parts changers. I do own my own shop and I would never think the way you do. We do about $2.5 Million in work each year off of 10 guys. Some years more, some years less, depends. I started my shop as a 1 man show. I built this business on honest hard work. No need to push extra parts. For instance if a contactor is a little black, new ones turn that color after it makes contact 10 times, I would inform my customer and let them make the decision, write it on my ticket so it is there for their record and mine. Recommended a new condensor fan motor drawing 2.0 amps RLA was 1.8, with the proper cap in good condition. Customer declined, was back in 2 weeks and the customer was laughing because he remembered our conversation. He has been a customer of mine through 3 companies and now a customer of mine at my own shop. Honesty goes a long way, and informing your customer on what has occured or will occure will always win over the company that changes the slightly black contactor and the owner/service manager thinks it is great. Just the other day got rid of a newer employee for this exact reason. Went to a house for spring pm, told the customer they needed a new unit, $200 commission was his prize, customer called in and I went out and found that the capacitor was bad and the contactor was not making full contact. No cost to the customer for repairs that I made myself, and I now have a spare van that will probably be mine during our busy season as I don't like people, like you, that are just out to rob people because that is what they want. We keep our regular pm customers units running really well and rarely have, extra's that are needed, on our maintenance calls. Not saying my guys have never done this before, but every new guy rides with me for 2-3 weeks and show him how I want things done and what is expected. Doesn't matter to me if you have been in the field for 30 years, you ride with me for 2-3 weeks and we have an understanding of how things will be done. He and I go to customers that I have had for years and when we are done I speak to the customer and ask how their experience was with the new guy.
Long story short, don't sell stuff that doesn't need to be replaced, do your job honestly and to the best of your ability.

Just don't think Mr. Markl has all the answers as he sure as hell seems to think. May work for you now, but will catch up to him sooner or later. Can't continue to lie and cheat people, someone will eventually find out and then it is party over. Business degree or not, look at all the big businesses that have went under in recent years, all of which were run by big bad people with Masters and BA's in Business and look where it got them. I am not an educated person in this respect, but I do well for myself and my business, because I have class, honesty, and a heart for the people who pay me for my services.

I hope to god my boss is like you. Because to be honest, this sounds like a job in sales more than a job in repair-work. I just want a check for being anal about my work and loving it.