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Explanation of Our Pricing System


Once we have diagnosed your appliance and know what repair is needed, we will explain that repair to you and then look up the price for the repair using an online program that we subscribe to. This program is basically a database of job-rates for appliance repair tasks that many appliance repair companies use around the country.


This is how it works. Let’s say a widget on your ACME washer needs to be replaced. We would select “ACME washers” in our program, find the task “replace widget”, and the total cost for the completed repair will be calculated and displayed on the computer screen for us to show you. 


There occasionally can be some add-ons if, for example, the washer is located in such a tight little closet that either it will take special equipment and/or a second man to help maneuver it so that it can be serviced, in which case a “difficult access” or “second man” charge will be added. 


There are also discounts that will be made if more than one task is performed during the same service call.


The main point of the job-rate (or “flat-rate”) system, compared to a “time and materials” system, is that the exact cost of the repair can be quoted up front to the customer, so that they can make a fully-informed decision about going forward with the repair. If the customer opts not to do the repair, then they will simply have to pay the service call/diagnostic fee of $95.


How are these rates calculated?


The most common appliance repair flat-rate program on the market is called The Original Blue Book Major Appliance Job Rate Guide.” According to the publisher’s website, the primary elements that are taken into account when calculating a job rate are: “parts, time & labor, equipment, predictable and unpredictable circumstances surrounding specific jobs, inventory management, education/training, office staff, advertising, insurances, travel time to and from the customers home, and all service vehicle expenses.” 


Are these “job-rates” more expensive than the prices from a company that charges by the hour?


The short answer is that they shouldn’t be.


A properly calculated hourly rate should take into account all of the costs of doing business listed above, meaning that, on average, a service company charging “by the hour” should be making the same as one using job rates. Any servicer charging consistently less is probably not adequately covering the above expenses.


My plumber charges by the hour - why don’t you?


Although they may seem similar, appliance repair is a very different trade than plumbing or electrical work.  First of all, each day usually consists of anywhere between 4 and 8 separate jobs, which means more time driving between each job.  Also, the large variety of brands, models, and types of appliances out there means a lot more time spent on training each year as well as complicated parts inventory management to ensure a high percentage of first-call completes (having the part on hand to do the repair on the first trip).


The challenge of every appliance service company is to price themselves so that they offer a good value for the service provided, but they also adequately cover all of the real costs of doing business so that they can stay in business for the long run. That’s why more and more companies are choosing to use a job-rate system like we do to calculate their rates for them.


What are the advantages of a job-rate system for the customer?


Here’s a summary of what customers like about flat-rate pricing:


1. The exact repair cost is quoted up front, which makes the “repair or replace” decision easier to make and gives the customer more of a feeling of being in control of the situation.


2. The standardization of prices prevents a price “penalty” for situations that result in a longer-than-expected repair, such as when the technician is performing a repair he doesn’t have much experience with or the part needs to be ordered, resulting in a second trip.


3. It is reassuring to know that the price is an accurate reflection of the actual skills, effort, and equipment needed for that particular job, and is calculated by a national firm whose specialty is producing fair and accurate appliance repair pricing.

 


© The Appliance Guru 2013
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