Flat rate pricing is something that was created to protect the consumer by offering a fair price for the needed service. Not only was this beneficial for the consumer, but also the business, as they had a fair market price to charge, ensuring a profit would be earned. While this is a great tool when used for a single repair, some companies may try to abuse it if the company pays employees using book hours rather than actual hours. This is one of the common HVAC service sales tricks to avoid.
The Problem with Book Hours
When book hours are used, a technician may (and will likely) rush through the project or repair to earn more money or they can add on repairs that overlap. When a person is charged for multiple repairs that have overlapping work requirements, the tech can complete them at the same time and almost double their pay.
This is because the technician is paid the time for both repairs and commission (in some cases) for the add-on sales. The company receives more profit due to the additional repair made by the technician.
Most people are likely familiar with this scenario in the Auto industry, which uses the same pricing tool and pays mechanics based on book hours. The system is set up to ensure a company’s profitability while reducing lost time and provides built-in motivation for the employee.
Consider this example.
You take your truck to the dealership to have a brake caliper repaired. After looking at the brakes, the dealer contacts you, letting you know additional repairs are needed and you agree.
Just an hour later, the dealer calls you letting you know your truck is ready to pick up. When you return with your truck and look closely at the repair bill, you notice you were charged for three hours of labor, but the dealer only had it for an hour and a half. When this happens, you will know the dealer has billed you using book hours, which is what labor would have cost if the mechanic had begun the second repair from scratch. However, in this situation, the mechanic had already removed the caliper and wheel before they begin the repair. This is one of the biggest issues related to companies that use book hours.
The Downside for the Consumer
Think about it. If an employee is monetarily motivated to do something, this can mean bad news for the consumer. This is why it’s so important to find a HVAC company that doesn’t use book hours. Instead, they should pay their employee for the time that’s needed to handle the repair properly and to ensure the customer understands what’s being repaired and why.
As you can see, book hours present a number of problems, with the biggest one being that you are going to wind up paying more for the service you need. Make sure you take the time to find a HVAC service provider that doesn’t use this method to charge for their services or use other HVAC service sales tricks. Contact Beebe HVAC today!