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Flat Rate Pricing for service

Discussion in 'Irrigation' started by The Irritator, Dec 23, 2006.

  1. The Irritator

    The Irritator LawnSite Member
    Messages: 32

    I was looking over a newsletter I got from Hunter and they had an article on flat rate pricing for service, ie. $x.00 for replacing a broken spray, $x.00 for replacing a broken valve, etc... It sure seems easier than the time/material route. Do any of you guys do service this way?

    We run 4 service trucks, and I am looking at a more effective price structure for customers and techs. I don't really like the "by the hour method".
  2. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Messages: 50,578

    Flat-rate might be easier in Florida than in poly-pipe country. How would you deal with a broken pipe price? What if the broken pipe is over a foot down, and underneath a 30-year-old tree? (and the tree is surrounded by a thick tangle of roots, from the surrounding bed of equally mature specimen-grade shrubs)
  3. jerryrwm

    jerryrwm LawnSite Bronze Member
    Messages: 1,274

    Sounds reasonable if everything goes according to plan and no surprises. Changing out that head that would normally take 15 minutes but when you open up that soil and find that a tree root has grown across the lateral and the tee and crushed the pipe and not you have to dig it up and re-route and replace line and fittings, now that flat rate job has just cost you some serious money.

    That valve that you would charge a flat rate for now has been installed by some jerk-off and the laterals and wiring are over the piping and you have to dig a bigger hole and replace a bunch of pipe and re-route it so it is done correctly. Just lost some more money on that service call also.

    Flat rate service charges are fine for auto mechanics - it takes x.x minutes to change an alternator on a F-150. And it takes the same to do it on the next F-150 that comes in the shop. If you are an HVAC business it takes the same amount of time to charge the compressor on virtually every Lenox unit out there.

    There are too many variables in the sprinkler business IMO. T&M is the most reliable method to price irrigation service because you are getting paid for your time. Set an hourly rate with a minimum and price accordingly. We have a 1 hr minimum and charge by the 1/4 hr after that. If your techs are filling out invoices and collecting on the spot, it shouldn't be too hard to calculate how long they were there and what they used. If they can't figure that out, then to my way of thinking they shouldn't be left out alone. A service tech is going to be my most knowledgable employee, and that means knowing how to bill out his time and materials. If nothing else, have them call the office and have the office staff do the math.
  4. londonrain

    londonrain LawnSite Silver Member
    Messages: 2,129

    We do flat rate on 99% of our service calls. The only time we charge an hourly rate is on trouble shooting and misc. repairs IE: raising heads , moving heads, etc.
    Our rates are Service call is $60.00 -
    installed pricing below.
    rotors $35
    12" rotor $65
    4" spray $15, 6"- $20, 12"- $25.
    Valves $100 and up
    controllers - $100 and up
    solenoids $25 and up
    diaphragms $25 and up.
    leaks $100 and up.
  5. NC_Irrigator

    NC_Irrigator LawnSite Bronze Member
    from NC
    Messages: 1,445

    IVe been charging flat rates since i started. Like London said, an hourly rate for trouble shooting and misc repairs. Time is money. Flat rates are great for the contractor if everything goes smooth.

    Res $65 hr
    Com $85 hr

    Rotor $65 installed
  6. aquamtic

    aquamtic LawnSite Senior Member
    Messages: 303

    londonrain hit it on the money! I learned alot about flat rate pricing through the plumbing industry which is similiar to what we do. We can flat rate about 95 % of it can be especially during season startups.

    It also manages the allocated time for the task that techs need to stick to.

    If repairs are very intense, techs would take notes and we would put together a more detailed estimate for the customer to approve.

    Our service call charge runs from $60-85. Depending on area
    Flat Rate Pricing Includes Major Part, Misc Parts, and Install and Setup Labor

    Component Price Ave.Labor Notes:
    Hunter PGP Rotor $34.00 10 Min
    Hunter 1-20 Rotor $38.00 10 Min
    All 4" Sprayers $25.00 10 Min Includes MPR or VAN Nozzle
    All 12" Sprayers $30.00 15 Min
    Nozzle and Filter $7.00 5 Min Install/Adjust Coverage
    Backflow 1" or 3/4 $225.00 45 Min Does Not Include Spigot for Blowout
    Install Rain Sensor $125.00 20 Min
    Replace Diaphragams/Solenoid $35.00
    Rebuild manifold Per Valve $125.00 Includes Valves, All Material
    Replace Entire Valve Only $95.00
    Basic Break Repair $15.00 Quick dig, coupler, clamps
    Extended Break Repair $20.00 Dig, coupler, clamps
    Flag Heads for Aerating $25.00 Includes Flags
  7. bobw

    bobw LawnSite Senior Member
    Messages: 807

    Interesting concept. Looking at some of the prices you guys doing flat rate are charging, I can't figure out how you survive...

    $15 for break repair? $25 for flagging heads.... all very reasonable prices for the service provided.

    So... how do you get paid for driving to the customer and back? As much as some of these are 10 or 15 minute jobs, you've still lost 30-40 minutes driving there and back..... and I don't see how you make money @ $15 for that hour of time.
  8. londonrain

    londonrain LawnSite Silver Member
    Messages: 2,129

    For example: Customer need one rotor head changed out.
    I charge $60 for SC plus $35 for rotor head for total of $95.
    most of my jobs are a 10-15 min. drive max.
  9. aquamtic

    aquamtic LawnSite Senior Member
    Messages: 303

    As I had mentioned in the post, there is always a $60-85 service call charge to come out
  10. bobw

    bobw LawnSite Senior Member
    Messages: 807

    Sorry... didn't get that you charged the service call fee on top of the flat rate. Makes much more sense that way. I end up at pretty much the same result as you do then in how my customers get charged.

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