Pay by the hour or by the procedure?
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  1. #1

    Pay by the hour or by the procedure?

    This week, when I had service on my air conditioning, I was somewhat surprised that the tech used a pay by procedure instead of pay by the hour rate structure. E.g. "you need freon; according to my rate sheet, that procedure is a level 2 which will cost you $xxx. You want me to fix the leak too? Let me see rate sheet says that's also a level 2 procedure so that will be an additional $xxx." I think his rate sheet had about 8 levels and a number of procedures within each level. I can see both advantages and disadvantages for the customer but after everything was tallied up, it translated into a pretty hefty hourly rate. Is this approach the trend in the industry?

  2. #2
    Join Date
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    We charge by "flat rate" makes it easier for us, and we don't have to do any breaking down prices for the customer, that way in a couple minutes you know what it will cost you for the job.
    __________________________________________________ _______________________
    “Experience is a hard teacher because she gives the test first, the lesson afterwards". - Vernon Law

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  3. #3
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    Quote Originally Posted by Mr Bill View Post
    We charge by "flat rate" makes it easier for us, and we don't have to do any breaking down prices for the customer, that way in a couple minutes you know what it will cost you for the job.
    Same here, techs are paid by the hour. Hourly rate, materials etc built into the flat rate. Sometimes you win sometimes you lose but it evens out in the end. The more knowledgable/efficient the tech the more profitable flat rate pricing is. With a service company (ie hvac, plumber, electrician) you're not necessarily pay for the "screw" but them knowing exactly where to put and how far to tighten the "screw"

  4. #4
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    Quote Originally Posted by jtrammel View Post
    Same here, techs are paid by the hour. Hourly rate, materials etc built into the flat rate. Sometimes you win sometimes you lose but it evens out in the end. The more knowledgable/efficient the tech the more profitable flat rate pricing is. With a service company (ie hvac, plumber, electrician) you're not necessarily pay for the "screw" but them knowing exactly where to put and how far to tighten the "screw"
    I have actually had customers ask me if I could break down a flat rate price, I tell them have you got a few hours.
    __________________________________________________ _______________________
    “Experience is a hard teacher because she gives the test first, the lesson afterwards". - Vernon Law

    "Never let success go to your head, and never let failure go to your heart". - Unknown

  5. #5
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    Nov 2011
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    Quote Originally Posted by Mr Bill View Post
    I have actually had customers ask me if I could break down a flat rate price, I tell them have you got a few hours.
    Breaking down the flat rate for the customer would be a level 4, non-specified minor repair according to my flat rate book.

  6. #6
    Quote Originally Posted by jtrammel View Post
    Hourly rate, materials etc built into the flat rate.
    Just to be clear, in my case, materials (like the freon) were extra.

  7. #7
    Join Date
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    Quote Originally Posted by ianxponent View Post
    Just to be clear, in my case, materials (like the freon) were extra.
    As well it should be, You should fix the leak.
    Trying not to be a Hack.

  8. #8
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    Quote Originally Posted by ianxponent View Post
    Just to be clear, in my case, materials (like the freon) were extra.
    "Freon" has its own "flat rate" by the pound in my book. And a "service diagnostic/trip" charge is added to every call as well.

  9. #9
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    Quote Originally Posted by ianxponent View Post
    Just to be clear, in my case, materials (like the freon) were extra.
    Everyone is a little different, I do 1-3 lbs of refrigerant is a certain price including labor.
    __________________________________________________ _______________________
    “Experience is a hard teacher because she gives the test first, the lesson afterwards". - Vernon Law

    "Never let success go to your head, and never let failure go to your heart". - Unknown

  10. #10
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    Jan 2004
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    Lancaster PA
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    Moved to General Discussion forum.
    Contractor locator map

    How-to-apply-for-Professional

    How many times must one fix something before it is fixed?

  11. #11
    Join Date
    Jul 2013
    Location
    Florida
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    We do an hourly rate after first hour. A charge for showing up. Charge for parts and refrigerant per pound.

  12. #12
    Join Date
    Aug 2004
    Location
    Chapel Hill
    Posts
    73
    We charge by job which part, labor and refrigerant included.
    Some clients did ask me to show the cost for each listing.
    I told them that i did not name those prices.....

  13. #13
    Join Date
    Jul 2011
    Location
    Nanaimo,BC, Canada!
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    We itemize everything on every invoice.. Labour is separate.. Sometimes it's a pain in the A$$ because some customers complain about paying for time to and from the k
    Job site... But most don't.

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