App Eases Customers’ Unhappiness With More Pricing Transparency

Flat-rate pricing app provides customers with job prices upfront, improves profitability

App Eases Customers’ Unhappiness With More Pricing Transparency

Joey Howze, Howze Plumbing owner, uses a tablet with the Coolfront flat-rate pricing app installed on it at a job near Keller, Texas.

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For years, master plumber Joey Howze did jobs on a time-and-materials basis, running the risk of occasional sticker-shocked customers expressing unhappiness and surprise about the final price. But that’s no longer an issue, thanks to the Coolfront Technologies flat-rate pricing app.

The app enables Howze, the owner of Howze Plumbing in Keller, Texas, and his two technicians to quickly and efficiently calculate a job cost for customers before work even starts. It also ensures the price accounts for all related expenses, plus a reasonable profit margin, he says.

The upshot? Happier customers and improved profitability, says Howze, who established his company in 1995 and primarily focuses on commercial and residential service and repair.

“Customers don’t want to digest the cost of a job and write a check at the same time,” explains Howze, who runs two Chevrolet service trucks equipped with 12- and 10-foot Knapheide box bodies.

“In years past, some customers would see the final bill and say, ‘If I had known it would cost this much, I might not have done the work,’” he continues. “We wanted to get away from that — present them with a justifiable price upfront. And this app lets us do that.”

Furthermore, most customers now are accustomed to an Amazon-like purchasing experience that’s fast and transparent. “There’s no reason why we can’t we do the same thing with plumbing,” says Landyn Howze, Joey’s son. “This app allows our company to provide that same high-end customer service.”

ENHANCED PROFITABILITY

The app also helped the company change its pricing structure to more accurately account for its expenses. Over the years, the company hadn’t raised its rates often enough, which slowly eroded profitability, Joey says.

“We were a bit anemic in covering all our costs with our billing,” he explains. “It was a hard lesson to learn.”

Couldn’t the company have raised its hourly labor rate or the markup on part-and-materials costs instead of converting to flat-rate pricing? “Sure,” he says. “But you still need to know where your break-even point is and where your profit starts. If you raise rates just to raise rates, you still don’t know where you stand in the big scheme of things.”

Moreover, the Coolfront app ensures that all technicians consistently bill every job the same way. That wasn’t always the case before the company invested in Coolfront, he notes.

Here’s how Coolfront works: First a subscriber must figure out all of a company’s expenses and input the data into the system. Then Coolfront determines an hourly rate that will cover those expenses, plus add a designated profit margin, explains Landyn, who handles office administration and business development for the company, which serves customers within about a 30-mile radius of Keller, a northern suburb of Fort Worth.

“Coolfront doesn’t tell you what to charge,” Joey points out. “You collect all the data about business expenses; and it develops a price for your company for specific repairs.”

The Coolfront app then automatically multiplies that hourly rate by the time it should take to do particular job, then adds on the cost of any parts and materials, plus a designated markup on them.

How does the app know how much time a job should take? Coolfront constantly updates a database that calculates the average time required to do more than 30,000 repairs based on continual industry research. It also provides current prices for roughly 11,000 parts.

As an added benefit, Landyn says if a technician knows he can do a particular job faster than the time stipulated by the app, it can be adjusted accordingly. “That way you don’t overcharge customers,” he notes.

LESS STRESS FOR TECHNICIANS

Howze Plumbing technicians adhere to a process when using the app. First they assesses the plumbing problem, then go back to their trucks to calculate the cost by calling up the app on an iPad. “When you click on a specific task, such as replacing a faucet, it’ll calculate the labor cost for that job, plus the cost of the parts,” Landyn says.

Then they show the final price to the customer. (It doesn’t show the hourly rate or the markups for parts and labor.) The app also generates a detailed description of the job. If customers accept the price, they sign an agreement on the iPad, clearing the way for work to begin.

Another benefit of upfront pricing versus time: Technicians don’t feel like they’re under the gun timewise, which can lead them to rush through a job to minimize a customer’s bill.

“With time-and-materials pricing, they know the clock is ticking,” Landyn explains. “They know the longer they take, the more unhappy the homeowner will be. But with this app, they know that no matter how long a job takes, the customer won’t be questioning it. So it alleviates the stress.”

In addition, with flat-rate pricing, customers aren’t penalized if a journeyman plumber handles their service call and takes longer to do a job than a more experienced master plumber, he adds.

Using the program is easy and intuitive, Joey says, noting he felt comfortable and proficient with it in about a week. To prepare customers for what to expect, Landyn explains the upfront pricing concept and procedure to them over the phone before a technician arrives.

There are two versions of Coolfront. One is a mobile app that includes online flat-rate pricing capability, plus invoicing, payment processing and other features. It’s called a zero-cost option because the $1.89 fee per work order charged by Coolfront is included automatically in the customer’s final job price, which enables contractors to recoup the fee.

Howze Plumbing uses the other version, Coolfront Books, which provides contractors with either traditional hard-copy, flat-rate pricing books or digital online versions. Costs include a $600 activation fee, plus $116 for the first pricing “book” and $41 for each additional copy.

A $2 fee automatically gets tacked on to each job to help defray the cost of the app. It’s designed to integrate with FieldEdge, which Howze Plumbing uses for its business management system.

The Howzes concede there was some anxiety internally about trying something so new after decades of using time-and-materials pricing. But their fears proved unfounded.

“It was a really smooth transition,” Landyn says. “Customers love the idea. Upfront pricing builds trust and makes them feel more comfortable.

“At the end of the day, we got into this for two reasons: It benefits the customers, and it benefits the company,” he continues. “It’s a win-win situation. There’s no more sticker shock for customers, and we now account for costs as they go up. It’s truly a no-brainer.”  



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