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Pricing Survey

Despite considerable evidence about the advantages of flat rate pricing, many contractors and technicians resist flat rate. Whatever their reasons for resisting, homeowner preference is clearly not it. By a nine to one margin, homeowners preferred flat rate over time and materials pricing. Yet less than half of the homeowners who recently had HVAC service were quoted a flat rate price. Ironically, even though most contractors failed to flat rate, they largely did the same thing when the technician gave the homeowner an estimate of the repair. This likely results from homeowners pressuring the technician for some idea of the cost before the work starts. Homeowners do not like the anxiety of an open-end repair. In these cases, when the technician estimates high, homeowners are thrilled to receive a bill that's less than expected. But when the technician estimates low, he either makes the homeowner mad or reduces the price, cutting into the contractor's needed profit.

In this survey result, we present research that shows how many homeowners prefer flat rate versus time & materials pricing. The source is a survey conducted by Decision Analyst, sponsored by Callahan-Roach Products & Publications (www.callahan-roach.com). Callahan-Roach generously made the results available to the Service Roundtable so that this could be created.

This can be used to help you make better decision making and to help your employees understand the market. Sometimes information is more credible when it comes from a third party. Even if you already knew the answer to a question and didn't need confirmation, you can use the results to help persuade your technicians and salespeople. And some statistics can be used with consumers in sales presentations.

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