Beware – Up Front (Flat Rate) Pricing

Have you had the experience of accepting a proposal for an AC repair from a service provider that performed a diagnostic, returned with a price for the repair and informed you that the amount quoted was the TOTAL cost of the SERVICE and required that you ‘Okay’ the charge and he would begin work right away?  If you didn’t ‘Okay’ the charge, he wouldn’t be able to perform the repairs.

Probably, if you have encountered such a scenario, it probably didn’t make you feel good.  And you knew if something doesn’t feel right, you shouldn’t do it.  If your level of discomfort was extreme, you had other things on your schedule for the day, or you didn’t want to sacrifice the time to get a 2nd Opinion, so you decided to just go ahead and get it over with… We don’t do it that way!  Our estimate of repair is based on the actual cost of the part (with a markup) and an hourly rate based on an expected time to perform the needed repair.  We are NOT afraid to reveal our hourly rate.  We don’t waste our time coaching our technicians  how to evade hourly rate questions by tactfully, responding with a scripted responses, nor require training on a flat rate methodology that  is a couple of pounds thick.  Nor do we think adding a FLAT RATE pricing scheme for repairs to our overhead adds value to the service we provide to our customers.  In fact, we think that FLAT RATE pricing is a dis-service to customers .

We don’t use FLAT RATE pricing schemes because we haven’t seen a scheme yet that we think is fair to our customers.  Maybe we will discover one that is fair to the HVAC service provider AND those they serve.  The FLAT RATE pricing schemes we have seen thus far are too stacked AGAINST the customer.  Until we discover one that is fair to our customers, our integrity tells us NOT TO DO IT!

Cons of Flat Rate Schemes

• The HOURLY RATE used to determine the up front price for a repair IS CONCEALED.  If you could get the ‘straight” answer on the amount of the hourly rate, I am confident that you would be amazed!
• FLAT RATE schemes provide a concealed path for service providers to CONCEAL hourly rate increases on a whim, not only when hourly rate increases are justified.
• Flat Rate pricing tends to emphasize the cost of the part.  Each part contains allowances for overhead and profit.  The more parts used, the more inflated the charge to repair becomes. (The higher the total charge for service)
• Technicians are REWARDED more for their knack of persuasion than for the service level provided to their customers. Those that really understand the system can actually get paid for more hours than they actually work.
• In most cases, Technicians receive up to 10% COMMISSION on  the work performed.  Since the company receives MORE $$$ on the work performed, they can also afford to pay higher rates to their employees and typically have significantly larger office staffs with great benefits.
• In many cases, inexperienced technicians without training on how to use the flat rate scheme show up at your home.  Does the amount paid for a repair really have guarantees that a professional, well trained service tech shows up at your door?
• There is a FLAT RATE charge for a PART regardless of complexity of the repair. Complexity of repair depends on the circumstances of the required repair. (Some are not as difficult as others, even for the replacement of the same part.)
• What would you expect the HOURLY CHARGE of the company to be when a technician with a nicely painted truck with the name of a regionally or nationally branded name shows up in a company uniform and wearing ‘footies’ whose company’s slogan is 1-Trip Service?  Come on! Does such a SHOW command a higher price?

Our PRICING Guidelines for Service Calls

• WE have a normal HOURLY RATE for a Service Call. Our PREMIUM holiday rate is 2 X the normal rate (New Year’s Eve after 5 PM, New Year’s Day, Easter, July 4th, Thanksgiving, Christmas Eve after 5 PM, and Christmas Day). For after-hours (After 5 pm) and other holidays our rate is 1.5 TIMES the normal rate. If you want to know what the NORMAL rate is Call us
• Included with our quoted Amount to Repair are Drive Time, Diagnostics, and an hourly charge to complete the required repair.
• The Amount to Repair is provided to the homeowner after the requirements are determined to restore operation of the failed system but before repairs are performed.
• Due to the complexity of the required repair (hours to repair or the weight of the parts required for the repair), a helper may assist the technician to complete the repair.  Helpers are charged at 1/2 the applicable hourly rate.
• Our Amount to Repair is based on 1 hour labor increments.
• Our technicians DO NOT receive commissions based on the work performed.  They are not pressured to generate a targeted amount of revenue per day or per service call. We focus our efforts MOTIVATING our service professionals to provide the highest level of professionalism possible.

If the number of system replacement options we could provide is greater than 400, given the number of HVAC service companies in the area, do you really think it is possible to have the parts on a service vehicle to guarantee a repair on the 1st trip?

Doesn’t a billing methodology like the one described in the column above versus the one on the left sound fairer to a customer?

It seems to me that the CONS in the column on the left significantly INFLATE the amount paid for a service call.

If you are considering contacting a service provider, we would want you to know what’s available for you before you call.  Participation in our Energy Savings Agreement program will reduce our charges by 10%.  Go here to learn about our Energy Savings Program.  If you are a 1st time customer, we will reduce the amount of the service call by the Service Call Fee.  Go here for more info.  

If you are concerned about a repair that may cost a significant amount, you might want to call us for a 2nd Opinion offer at 843-399-0203.  Or you could email us at [email protected].  Or you could schedule an appointment with a service technician here.  We would be delighted to have the opportunity to serve you.