Start Making Money in 2011 using Flat Rate Pricing

1. Start Making Money in 2011 using Flat Rate Pricing …..a key to contractor profitability. Mike Hajduk, President Jeremy Lowe, Database Administrator

2. CALLAHAN ROACH and dESCO • Long Relationship – dating back to the early 1990’s • Flexibility of flat rate usage. Books or mobile. • It works!

3. Started flat rate in HVAC in 1989. • Segment leader. • Sold over 5,000 dealers CAP™ flat rate. • Trained hundreds of contractors. Who is Callahan Roach Business Solutions?

4. Consulted with industries largest and most successful dealers. • Recognized as having the most robust database of flat rate repairs. • Serves 3 industries. Who is Callahan Roach Business Solutions?

5. 91% of all American homeowners want to have their service company offer flat rate. • Many HVAC contractors set their service prices to lose money. • 25% of service companies go out of business each year… …Pricing errors are easy to fix with flat rate. • Low Net Margins should not be fixed by beating up suppliers about pricing. Why flat rate as a linchpin?

6. Flat rate pricing is the technician offering the customer a no surprises single price to make repairs on their HVAC system, before the job is started. So what is flat rate pricing?

7. What we know it is: • Way to get enough for your labor and parts to make a profit • Allows you to take the focus AWAY from your price and place it on your SERVICE and company QUALITY • Show the customer that you have the capability to repair and install complex systems

8. Published by ServiceNationPress.com Flat Rate Myths Matt Michel’s“The Power of Positive Pricing”

9. Flat “Rape” Myth • Technician Resistance Myth • The “Perfection” Myth • The “One Long Job” Myth • The “I can do it better myself” Myth Matt’s Flat Rate Myths

10. Theatrics It is a tool to show that your company is head and shoulders better than the competition.

11. You compete with Macy’s, Kroger, Target etc., for your customer’s “eye”. Merchandising of Your Service

12. Your Truck • Uniforms • Pictures of equipment and/or parts • Booties, drop cloths, cleaning work area • Flat Rate Manual or Mobile Device • Work Orders How to Merchandise your Company

13. Building Value in Service Invoices

14. Jeremy Lowe Database Administrator, Technical Training, CTO, etc, etc, etc.

15. What the customer wants and perceives as value. • What an improperly completed invoice is. • What a correctly completed invoice looks like, why it is important, and how a properly completed invoice builds value • How to explain multiple repairs so that a customer understands the need to invest in their equipment now rather than later. Highlights

16. All Service Companies Need To Increase The Dollar Revenue Of Their Service Tickets to Remain in Business • No Company Wants To “Gouge” Consumers Or “Take Advantage” Of Them • Many Consumers Need Multiple Repairs Yet We Fear The Price May Scare Them Away Service Tickets

17. How Do We Deal With Customers That Have Want The Cheapest Price?

18. Repair Under the Diagnostic ?

19. Bad Mojo • It Is a Diagnostic Only Charge • We Are Not Giving The Customer a Break • We Are However Breaking the Company!

20. Running a business is EXPENSIVE! • Labor drives overhead thus unapplied time means we must charge more • Other hidden expenses must be covered so our company makes a profit • No profit, no jobs! • List cost of business....... WHY CHARGE SO MUCH?

21. Insurance For Employees Business Insurance Rent Utilities Advertising Training Workers Compensation Consumables Tools Communications Taxes Fuel Licenses Warranties Employee Benefits Other Expenses

22. Not a profit center • A charge customers understand if explained properly • Can’t make repairs under this charge • Does not cover the expense of getting you to the door! • Devalues our service if we make repairs as part of diagnostics DIAGNOSTICS

23. High liability when we “Diagnose” • Always finish a diagnostic • You touch it you bought it! • Failure to do so is a liability • Failure to do so is costing you customers • Failure to do so can be laziness! DIAGNOSTICS

24. How Do We Deal With Customers That Have Multiple Problems When We Do The Diagnostic, But Only Want The Cheapest Price?

25. We Must Understand What Customers Really Want!

26. “I Want A Fair Price!” “I Want To Trust My Repair Company!” “I Want It Repaired Right The First Time!” “I Want To Understand What My Servicer Is Doing To My Home” All People Want Basic Human Need Time Is Valuable and Multiple Repairs May Indicate Inexperience Consumers Fear What they Do Not Understand And Can’t Explain Well To Others Understand Your Customer

27. Flat Rate Service Pricing • Giving Customers a Fair Price that is in Black & White From a Printed Book • Customers Feel They Can Trust a Servicer Who is Thorough • Doing a Complete Diagnostic Allows us to Recommend all the Repairs Up Front • Using Tear Off Pads and Detail on our Invoices Builds Trust in us and the Company!

28. Flat Rate Builds Trust And If Used Properly Reduces Post Shopping Complaints About Price

29. Neat And Thoroughly Completed Service Tickets With Good Diagnostic Procedures Reduce Callbacks And Increases Consumers Understanding Of Recommended Repairs

30. Perceived Value

32. What Value Does Your Diagnostic Hold?

33. “I Want A Fair Price!” “I Want To Trust My Repair Company!” “I Want It Repaired Right The First Time!” “I Want To Understand What My Servicer Is Doing To My Home” All People Want Basic Human Need Time Is Valuable and Multiple Repairs May Indicate Inexperience Consumers Fear What they Do Not Understand And Can’t Explain Well To Others Understand Your Customer

34. Bad start Capacitor on motor • Leaking service valve cap • Safety is by passed • Needs refrigerant • Old mercury thermostat • Contactor seriously pitted A Service Scenario

35. Always recommend all legitimate repairs • Let the customer decide what they want to do • Give your professional opinion if asked • DO NOT REPAIR ANYTHING AS PART OF A DIAGNOSTIC!!! • Offer discounts on multiple repairs What to Do?

40. Leaving an item that “Still Works” but is obviously going to fail or is broken is bad business • It is not what customers want even if we feel we are “saving” them money by encouraging the unit to RUN TO FAIL. Observe!

42. When A Customer Understands The Value Of Making Multiple Service Repairs At One Time They Will Make The Investment In Their Home Heating System

43. Did The Customer Perceive Any Value In The Diagnostic Procedure?

44. Not Enough Time! • “I can’t do a good diagnostic because the office gives me way too many calls!” • “There is way too much stuff to check!” • “We have no where to mark what we check on our invoices!” TECHNICIANS PERCEPTIONS

46. A Completed Service Ticket and a Thorough Evaluation Reduces Complaints

47. TAKE the time to look • Be thorough • Show the customer the price in your book. • Look for predictive repairs • Look for preventative repairs • Be prepared to suggest upgrades • Understand what customers want! To Build Value

49. What Does The Customer See?