Flat Rate Pricing for service

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

  1. laylow1994

    laylow1994 LawnSite Member
    Messages: 114

    Just curious what other people that use flat rate what there pricing are.... well i work for valleycrest in tampa... each branch the pricing is different....
    here are some of our prices....

    6" pop-up spray $21.00
    6" rotor $30.00
    1/2-3/4" lateral line $47.00
    1-1 1/4" lateral line $87.00
    1 1/2 - 2" ;ateral line $157.00
    1" valve $125.00
    1 1/2" valve $200.00
  2. Repairs

    Repairs LawnSite Member
    Messages: 113

    Some of the guys on the board are missing the flat rate benefits. Yes, you will loose some money on some jobs, but the point is that you figure your annual operating costs, and desired profit margin and spread that across all of your jobs. I may loose money on 1 job but the 20 jobs I just made 20% more on because I used flat rate made me more money. Customers will pay more money when they know how much the job will cost upfront. They honestly don't care how much you charge by the hour, they want to know the bottom line. I have seen that as a fact over the last 3 years I have been using a flat rate system. You also pre-qualify new customers before you start the job, and if they expect a new clock, 2 valves and 6 sprays for 150.00, you can move on to your next job before even beginning. The key to making money on a flat rate system Is I can run a three man repair crew and double or triple my output, yet the customer never sees that my typical hourly labor rate is 150+. The catch to this system is that your tech must be top-notch. He must be able to recognize what will be problems that may screw you on the job. This system is probably not effective for folks who do not see a lot of systems, and multiple issues frequently. I do not make money going on a call to change 1 head, but the jobs that are 150.00-1500.00 more than make up for a few small ones. I consider the service call a lost-leader to get the folks in the front door. We make money @ 150+.
  3. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Messages: 50,368

    I don't quite get a flat rate for a valve. Is this for fixing or for replacing? I hope there's a valve box. No question that it might be possible to attract more customers with a fixed fee, but it would seem to me, that the only way to accommodate unforseen circumstances is to add to the flat rate, so that all the customers are contributing to defraying the lower 'take' on the problem jobs. I'd prefer that the guy with the $700 leak pay for it, and not burden my other customers. But then, I see a lot of systems that are decades old, and not likely to be repairable on a cookie-cutter basis.

    I'd still bet that flat-rate sprinkler service is more common in warm-weather areas. Not a whole lot for that 'top-notch tech' to do around here in February.
  4. bicmudpuppy

    bicmudpuppy LawnSite Silver Member
    Messages: 2,781

    BINGO! The one benefit I almost "see" to flat rate is that it gives you an "out" for those repairs that don't go right because you had the wrong people on board. That inexperienced tech (or the one who just hasn't seen the right antiques) who costs somebody a bunch of money from ignorance gets absorbed into the formula. In a seasonal market, a "good" tech justifies his pay rate and "winter vacation" by how profitable they are on service calls. Doing your own paper work, being an above average technician, etc. are how you improve your production and thus your perceived value to the company. This helps justify the compensation you wish to receive!

    As an employer put it when I was down in DFW............We like to eat at the TOP of the food chain :)
  5. Repairs

    Repairs LawnSite Member
    Messages: 113

    It's what works for me. I am located in texas. Valves are handled in the following manner. Only two choices when we work on it. Either the valve is completely rebuilt... solenoid bonnet, diaphram, springs, or cut out and replace entire assy. Now we only rebuild a select few vales mostly the newer type. Old brass valves or hard to find parts for valves get removed. Why leave it so it can be hard to get parts for next time. Isnt that a better long term value for the customer anyway? Regardless of which route we go, it will get a full 6 mos. warranty. If I can't give that then why do it? Why just replace the bonnet, and leave a 10 year old solenoid in the ground? Yes, that may be good for you but is it good for your customer? My guys get 90% of the rebuilds knocked out in 15min. or so. We can do a standard cut out and replace in about 30 mins. tops. Keep in mind we are down south, so our systems are not typicallly over 6", but this is how we do it. Rebuild $98 -- Replace 1" Valve, No roots, rocks, and not over 6" deep -- 126. Locating is seperate -- typically 40.00 first valve 17 each addtl. This system is now upselling orientated. If 3 of the customers valves 205 richdels over 10 years old, and are not opening all the way, why are we not recommending he rebuild all 5 valves and save the aggrevation of having to have you out multiple times. Quote -- Five valves rebuilt -- 4 sprays -- locate 2 valves -- svc call and system inspection including light adjustments -- quote 680.00. My men can knock out a job like this in 2.5-3hrs tops including the initial inspection/quote time. It all comes back to good tech's, my three man crew knows exactly what they are doing on every single repair. Now if the system is multi-strand or goofy wiring this will change the locating quote. All you have to do is write in an time not to exceed in you original quote. If it exceeds 30 mins. on the locating there will be and additional charge etc. If there are roots rock or extra depth, we quote the higher rate. If it hurts your feelings when you are done because it wasnt deeper, most customers will always accept a courtesey discount. I typically tell them that the discount is due to the fact that my men finished the job under the budgeted time. How do you think a customer will respond when you just quoted them 275 for a repair and at the end they end up paying you 225 because it was under the "budgeted time". Can you say customer for life? Our customer satisfaction on this system is unbelievably high.
  6. bicmudpuppy

    bicmudpuppy LawnSite Silver Member
    Messages: 2,781

    But thats not "flat rate". Thats a T&M table with a SWAG thrown in. I can "estimate" all day long. Estimating high so you seem like a nice guy when it all is over is still estimating, and its still T&M. I still don't know whats down there until I get the shovel out of the truck. Flat rate means you fix it for a FLAT RATE no matter what you find down there. Pipe art, six abandoned laterals, or poured concrete. If you quoted a flat rate and then change your mind..........well, yeah I covered that in the earlier post. Got a lot of "rock clause" junkies in this market too.
  7. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Messages: 50,368

    While I don't think a lot of the flat-rate concept on the old systems I deal with, I can let any caller know what a sprinkler head replacement should run, when they inquire, just by adding my minimum T&M for such work.

    Sometimes, when I encounter a job where a major refit of both backflow and valve manifolds are called for, I'll set a price ceiling for the job, based on what I expect the T&M to run. That way, a client doesn't have to worry about the meter running into extra charges. But I don't like to do that unless I know exactly how I'm connecting the dots, with no buried surprises.
  8. Repairs

    Repairs LawnSite Member
    Messages: 113

    You call it what you want to call it, my point was you can flat rate with a guarantee but under certain circumstances have an exception. I do not have a rock clause, the price of the original quote is higher if it is in rock. I told you previously I have two laborers on a crew so if need be we dig up leaks before quoting the job we do it. My customers never pay a dime over what I quote them, and ocassionally when I finish one under my time figured for, I will reduce the price as a courtesey. It sounds like t&m is the best system for your business and that is fine. I just cant run the volume I do now under the t&m system. When I started 10years ago we did the t&m thing and that worked for a while. The facts are facts, we did 30% more in gross dollars the year we switched to flat rate and I put about 20% more profit in my pocket. For each his own though, if you are happy with what you are doing then by all means dont change. I was just at a point several years ago that I wanted to make more money without working more hours.
  9. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Messages: 50,368

    I think it might work out to a warm/cold poly/PVC kind of argument. Just two different ways of doing things. Northern fixit guys have a shorter repair season. I have a lot of issues with roots on some properties, and there isn't any good way to flat-rate them. Pulling new pipe is sometimes required.

    Obviously, the idea is to maximize profits. With a flat rate, you can shift the service labor around, and not have to sweat the clock. I like that idea.
  10. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    I use a hybred system for larger sites.

    You have to cover travel time and truck charges.

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