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Service Calls and Complaints about them

Discussion in 'Irrigation' started by SprinklerGuy, Jul 9, 2003.

  1. For the second time this week I had a complaint about a service call fee.....here's the scenario.

    Customer has 12 zones....4 of them drip.....1.25 acre lot with lots of turf also.

    3 weeks ago we were there...fixed some drip leaks. Gave her a bill for our time and parts totaling $143.69.

    We went back there today....3 weeks to the day....repaired a pvc line break in the lawn....took 15 minutes. Gave her a bill for a service call plus parts totaling $63.00.

    She called and complained that she was a REPEAT CLIENT and shouldn't be charged a service call that soon after a visit. I explained to her that our costs are the same to come to her house every time and that no service call would be charged to her if she had called right away...AS STATED ON OUR INVOICES...but for a separate problem called in more than 10 days after service, the service call would be billed.

    she said she would never call us again.....is that bad, probably, but if she doesn't think we are worth what we charge, do we even want her as a customer?

    I have been racking my brains out trying to come up with a different cost structure. HBFoxx, I know we have been through this before, I know PHoenix is a big city and plenty of other customers, but this always grinds on me.....any ideas?

    BTW...this same lady thought when we gave her the window of 8-11 am that we would be there at 8am.....we explained to her that we would arrive sometime between 8 and 11 but I guess she forgot that.
  2. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,712

    "I know we have been through this before, I know PHoenix is a big city and plenty of other customers, but this always grinds on me.....any ideas?"

    Go service the plenty of others that are not a pain and don't let the less than 1% bug you for more than 2-3 minutes. Even talking about this is an unproductive waste of time. Think about fishing or beautiful women.
  3. jman00

    jman00 LawnSite Member
    Posts: 129

    what is the price of your service call and how many men does that cover. When i have done service calls in the past i billed for 35$ That covers the first hour and then its 25 dollars per hour per man (but it us usually only me unless i know there will be a lot of digging, then i find a helper) after that, plus list price on all parts. Peopel around here will pay that and not much else. I do know of guys who charge 25$ service call and i hate them(not really)

    by the way the hourly rate is billed at 15 min increments after the frist hour.

    Is this about what you guys charge or more. Its hard toget people to do anything about their crappy systems unless grass starts dying, they dont seem to care about dollar weed and fungus. excessive water.
  4. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    jman00 - most of us are charging $50-$70 an hour for service work.
  5. Ground Master

    Ground Master LawnSite Senior Member
    Posts: 505

    Since it only took 15 minutes and if she is a fairly regular customer maybe you could have charged her half? Maybe if you would have explained that "normally this is a $63 repair but since we were here a short time ago I'll cut you a break"?

    Perhaps this repair could have been scheduled close to another repair you had. The drivetime may have been 15 minutes (or even a lot less) plus the 15 minute repair, thus totaling 30 total minutes for $30? Just a thought. I know she'd probably want more "deals" in the future, but explain to her this is a one time deal.

    Like Harold said too, you could always just service the others in your area and drop these customers.
  6. jman00

    jman00 LawnSite Member
    Posts: 129

    50 to 70 an hour i am not sure people would pay that here. I guess in will never know until i tried. How do you guys justify that price. Done say just because. What does it actually cost you per hour and what is your profit from that. How are your guys business set up. Secretary, or other things like that.
  7. HMMMMMMMMMM this could be long

    Overhead and/or expenses for me would be:

    3 techs
    1 install crew of 2 guys
    4 trucks (new) w/ payments
    Gas for trucks of course
    Repairs/Maintenance on trucks
    Insurance on trucks
    Workman's compensation
    Unemployment insurance and FICA
    Health Insurance for guys
    Contractors license
    3 million dollar liablility insurance

    Office staff of:
    1 Office manager
    1 General manager (me)
    Office rent in Scottsdale, Arizona
    Office rent in Woodland Park, Colorado
    Yard rent in Scottsdale, Arizona
    Phones in offices
    Yellow pages (work great for me, so don't start that debate!)
    Direct Mailers (Other advertising that works great for us)

    Travel and meals expense of course back and forth from Colorado To Arizona

    We charge like we do because we are a real company....with real expenses and overhead. Our clients have been with us since I was a "trunk slammer"...(thanks turfman)...so they have seen my company progress...

    Some of the things a "real" company can offer.

    I answer the phones 12 hours per day....or my office manager does. I schedule things immediately with the client on the phone. I show up when I say I will, or earlier. I stay in constant contact with my clients through postcards and newsletters. I call my clients when I 'm on the way to their house, from the service vans or the office, whichever is deemed easier. I offer credit card acceptance. I offer online scheduling through email or my website. I offer same-day service.

    Now, just because I can offer all these things doesn't mean I am a "real" company and better than others with only themselves, it just means that our clients perception of us is a little different than it was before. They used to get me every time....they used to have to wait til the nighttime to receive a return call from me....they used to have to make the check out to my name..or pay cash...they used to get frustrated because I couldn't get to them for days, even weeks during the summer.....they used to hate getting my answering machine even during business hours....

    All of the things I can offer the client cost money. Some of them cost big dollars....I know that I have to get that money back, plus my profit. My price is based upon that....plus it is somewhat market value. I called 25 companies in January and tried to make my prices competitive, yet profitable for me. Next year I will do the same, probably raise prices since I have yet to raise them to recoup my office manager.

    whew! Sorry for length of post....I love talking about this stuff.
  8. jman00

    jman00 LawnSite Member
    Posts: 129

    That was great insight on your business and something i have been thinking about for a while. I am in school right now trying to become a Landscape Architect. I love this industry and working for myself. When i grad i plan on working for a few years and gaining experience in what the real world is past school. After that i am going to start my own business. I want to run a design build company. Right now i just do maint.

    What i have been working over in my head is how big is big enough. I can work bymyself and make money. And i can have workers secretarys managers and all that goes with that. and still make money. but how much more money are we talking about. How much more money will go in my pocket and pay for my kids college or for my wife to have a nice vehicle and spend money(when i get a wife and kids.) I know its more headaches to have employes, are the headaches worth it.

    I didnt feel like starting another thread so if this doesnt get read thats cool i just wanted more insight from some of the guys who posted on this question.
  9. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    My overhead/expenses are definitely lower than SprinklerGuy but I still charge close to his rates even though Colo Spgs is smaller in size and lower in terms of average household income.

    One tech and myself
    No install crew (we don't install)
    2 trucks w/ payments (3 left on one and will pay all of it tomorrow)
    Gas/repairs/maintenance/ insurance on trucks
    Work comp on one employee only
    Unemployment and FICA
    Health insurance for myself only
    No contactors license needed in Colorado - but I am licensed at the regional building dept. for installing backflow preventers - $100 a year
    One million liabilty

    Office staff - me, myself and I
    Office and garge at home
    Business phone and dedicated fax line
    Nextel phones
    No advertising
    Referall fees this year only to one guy for buying out his company

    BUT does that mean I should charge less? In my mind, NO. I charge close to what the majority of other companies in town do. Yes there are guys that will do it for $25-$35 an hour. Not me. My mechanic is $70 and hour. My accountant is $60-$70 an hour. Plumbers and electricians charge $50-$80 an hour as well. Why shouldn't we? I don't care if they are a small or large company. As long as they do the job right I will pay a premium.
  10. I agree with Dana......you should charge as much as you can depending on your area.....I haven't chosen to raise rates as of yet....but I will eventually to get to the top 10%. I think there is going to be a cap on how much you can charge. I may already be there. I am also considering flat rate pricing...right Harold?

    As for making more....here is how I looked at it:

    Yes, I could probably make the same money doing it with less staff, or no staff, but probably not and here is why:

    Plus Side of solo:
    Only so many hours in the day to sell time....time is what I sell...limited by daylight and of course my own energy. So, that limits me to say.....40 hours per week or 160 per month billed which equals say.....9600 per month....not pure profit though due to some overhead....no business is without overhead. Plus, 8 hours per day billed is tough to sustain for very long....very tiring business this digging thing! But, let's leave it at that.

    Minus Side of above:
    Tired.....no life.....never see the wife and kids...when do you return phone calls.....probably cannot schedule work this way for very long due to the phone tag etc......plus if I get hurt, business quits. Noone to do service calls,....income down to ZERO

    Plus Side of larger company:
    I can sell 6 hours of labor per day x however many techs I can keep busy.....6 is reasonable.....lets say 4 techs @ 60 an hour x 480 hours per month = 28,800 per month.....also not pure profit, not even close....but.....6 hours per day is easily sustained and if business is good, probably can do that without problems. Guys don't get tired working 10 hour days...with drive time....If I get hurt playing golf, fishing, playing softball, or whatever I'm doing with free time...I don't have to worry about service calls getting done...they are already getting done....I can hang out with family...I can live in Colorado while the business is in Arizona....and probably one really important thing...I can start other businesses because the Sprinkler Business isn't taking up ALL MY TIME...I am working on my business and not in it.....I am thinking of ways to sell more hours and be more efficient....I am hiring people that are good at what I am not....I am not as scared to hire anymore because I have done it...A LOT!....If you have a business where you are the only employee and wear all of the hats...you don't really have a business, YOU HAVE A JOB! YOU HAVE BOUGHT YOURSELF A JOB....perhaps a high-paying job, but a job none the less. Believe me I am not knocking the smaller companies....I am small too....I am not knocking the solo operators......just pointing out some things.

    Minus Side of above:
    Stress........short term debt (wife hates that)......daily sense of urgency......have to learn how to operate computer and make spreadsheets.....reading business books.....risk......extra time during the week... employee problems......bills...lots of bills.

    I would say the good outweighs the bad, but I would also caution you and say that it isn't for everyone...I have seen many guys who were good at smallish companies lose their shirts because they couldnt delegate.....it took me 12 years to get to here....I would say I only started to get here perhaps 3 years ago. I could have done it sooner but was scared....

    Good Luck.

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