Flat Rate Part 4

March 20, 2003

Flate Rate Myths

By: Matt Michel

The "Technician Resistance" Myth
A lot of contractors are afraid of their technicians. They think the technicians won't react well to going flat rate. In some cases, this has merit. The technicians have bought into the flat rate price gouging myth and get their boxers in a tangle.

Yet, flat rate is easier for the technicians. They don't have to calculate up the bill. They can look it up. They don't have to worry about the customer watching them to ensure they aren't padding time.

Technicians will adopt flat rate IF it is presented correctly. This means hearing them out. Listen to their concerns. Then address them.

Flat rate is new and different to them. As such, it's a touch frightening. Give them a chance to get used to the idea, to understand why it's important, how it benefits them, and so on. A heavy-handed mandate is doomed to fail, while a training approach will speed a successful implementation. Remember, tens of thousands of technicians have managed to successfully adopt flat rate.

The "Perfection" Myth
Contractors hesitate to adopt flat rate because it's not perfect. Nothing in this world is perfect. Most flat rate systems are close enough and exceptions can be corrected over time.

If every possible task were found in a flat rate book, it would be impossible to hoist it. From time to time, a technician is going to encounter something in the field not covered. When this occurs, the technician should calculate the flat rate price or call back to the shop where they can do it. If the task is one that will be encountered in the future, it can be added to the next book that's printed.

When the time for a task is off, it can also be corrected with the next printing. By now, most flat rate systems are stable enough that it's unlikely many tasks will be off by much. If a task is off, it's not the end of the world. Finish the job, fix the task for the future, and keep going.

Do not feel the need to perfect the system before starting. If you do, you'll never start.

The "One Long Job" Myth I know one contractor who hesitated for years because of the fear of that ONE job that would run long. He fixed on that and couldn't move ahead because he might stumble across one job sometime, somewhere, and lose money.

Remember, that ONE job is balanced by others. It's like that ONE warranty where you lose money. You can afford it because there are many, many more warranties where you make money.

The "I Can Do It Better" Myth
Many contractors, who sneer at and despise the DIY trade, try to do-it-themselves when it comes to flat rate pricing. They spend countless hours creating their own flat rate system, which often never gets implemented. What a waste!

Flat rate systems require an investment, but they return it very, very quickly. Unless you want to get into the flat rate business, it makes no more sense for you to develop your own flat rate pricing system than it does for you to hand build your service trucks.

There are too many good flat rate systems in the market. Buy one, keep it up to date, and go make money doing what you do best.

Source: Comanche Marketing. Reprinted by permission.
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Copyright © 2002 Matt Michel

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