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Brazos Valley | I think your pricing structure is too complex and I struggle following the math of the trip charge.
You’ve historically been eating the 40 mile (easy math assume 40 minute) commute to town and back but your hourly rate was $50/hr. So 2/3 of $50 is $33 in unbilled wages. Now you’re wanting to charge $150 per day in a trip charge and the customer is not understanding the math because by your own account you only gave up $33 in wages historically. The truth of the matter is you’ve been way too cheap for way to long because that LUV van is getting 9MPG at $3/gal and insurance is $500/mo if you’re carrying commercial auto with a $1mil limit.
My service area is fairly small geographically (1 county) but we serve a population of over 300,000 and I do not charge a trip charge for in county calls. When we leave the county we start the hourly clock at the county line and we bill a $50 trip charge, hourly clock($145/hr) stops when we get back to our county line.
My advice to you would be a lot less complicated and easier to track. If I were you I would charge a $25 trip fee on every invoice. I’d charge $85/hr with a 1 hour minimum. I’d also charge interest on balances not paid in full within 30 days. Also any part that you sell needs at least a 25% markup on it because it was IN YOUR TRUCK and if their job requires an odd part that wouldn’t typically be on a service truck they continue to get billed an hourly rate while I make phone calls or drive all over town.
Just remember that they have chosen to not do the work themselves because they either don’t know how or they know their time is more valuable doing other work. You should do the same. Value yourself and your be surprised how many people will value you.
Also, if you show up to a house and it really only takes you 5-10 minutes to fix whatever simple it is and the customer is a great custome; the structure of a trip
Fee and 1 hour minimum gives you the liberty to waive the 1 hr and only charge the trip fee. He feels like he got a deal and you at least covered your fuel one way to town. If that 10 minute call was the fourth call of the day you’ve already billed $75 other dollars in trip fees.
In my 8-9 years in business owning my own HVAC company one thing I’ve learned is there will always be those customers that complain about everything and yet still pay the bill and still call you back time and time again.
Good luck and your not doing anything wrong by raising your rates but I do think it’s much to complex. Know your worth, charge your worth and accept nothing less.
Caleb | |
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Customer (landlord) freaking out with new billing structure.
