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Son of Samurai's Blog

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2 Simple Steps to Make your Appliance Repair Business More Profitable

Son of Samurai

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You're fighting a constant battle in the appliance repair trade to get the most money out of the time you spend. One of the biggest problems you face is unprofitable service calls. Most often these crop up as repairs that are close to the replacement cost. What customer is going to opt for a $300 repair when they can buy a new dryer for $400?

Fortunately, there are 2 simple steps you can take to weed out 95% of these kinds of calls. These steps are prediagnosis and flat-rate pricing.

Prediagnosis just means wargaming the call before you actually head out. Seems like common sense, but a lot of guys don't do it. It includes researching the appliance and the problem, reviewing any tech literature that you can find,  and coming up with a firm idea of what the problem might be and how you're going to troubleshoot it.

Not only is prediagnosis vital for good troubleshooting (which will keep you more profitable too, by the way), but it also lets you sniff out unprofitable calls before you head out on them. If you identify the most likely cause of the issue, you can look at the cost of the parts and labor, do some quick math, and determine what to communicate ahead of time to the customer.

How do you accurately estimate the cost of a job? This leads us to...

Flat-rate pricing. If you're not already using this, you're missing out. Using a flat-rate guide (we use the online Blue Book, arguably the most popular one), you can quickly and easily look up the cost of any repair, parts and labor included. This lets you figure out in a snap what the job will cost.

From there, you can either decide to accept it, turn it down altogether, or even tell the customer over the phone what the cost of the most likely repair will be to see if they're still interested in having you come out. Not only does this save you time and money, but it keeps customers happier too -- no one likes having a tech out just to tell them that the repair will cost nearly the same as replacing it.

Bonus tip! Don't set your service call fee too low. If you're willing to drive to a customer's house for a pittance, then you're just asking to be taken advantage of by tire-kickers and DIYers who just want you to figure out the problem for them so that they can fix it. This might shock some of you, but our service call fee is $125 -- and yes, we still get lots of calls! Generally better quality ones, too...

Take all this advice to heart, and you'll see your wasted time plummet and your profit margins skyrocket. Want to learn more about how to structure service calls and troubleshoot like a champ? Check out this webinar recording on the Samurai System for Service Call Excellence -- available to premium members only!

 

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tell the customer over the phone what the cost of the most likely repair will be to see if they're still interested in having you come out. Not only does this save you time and money, but it keeps customers happier too -- no one likes having a tech out just to tell them that the repair will cost nearly the same as replacing it.

We've gotten a lot of good online reviews because of this practice. Our customers appreciate being given a heads-up over the phone about likely costs when we feel it's appropriate.

And many of them still have us come for the service call. Besides wanting to find out for sure what's going on (occasionally it can be some oddball situation that doesn't end up being the "likely" scenario), there are a variety of reasons some people are willing to pay for a repair that is close to the cost of replacement. Convenience is probably the biggest, but also if the appliance matches others, or maybe they are selling the place, or they really like the particular model, etc.

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> We've gotten a lot of good online reviews because of this practice. Our customers appreciate being given a heads-up over the phone about likely costs when we feel it's appropriate.

Same here.

I don't think of it as a "lost call" I think of it as "great advertising in exchange for a couple of minutes of my time"

 

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acfixerdude

Posted (edited)

I agree with the above tactics for companies who do service only. Of course prediagnosing and wargaming is a great tactic for any company whether you only do service or if you sell too. 

Getting in the customers home and diagnosing their cheap appliance makes sense for us because we also sell appliances. If they'd rather replace we'll let them know the service call they're paying now will go towards delivery and install of an appliance purchased from us.

On a side note, when doing your cost vs replace analysis make sure you include factors like: how much is it going to cost them to replace this including delivery, install and haul away; do they have a matching set and do they want to keep it a matching set (if so now you have to price in the other piece); maybe they are looking to remodel or upgrade their appliances anyways; maybe they can afford a repair but not a new appliance, etc. Maybe they hate their washer or maybe they love it. Also think of the features the appliance has and factor in the cost of replacing it with a similar or better one, don't assume they will get the cheapest available.

And of course as Mrs. Samurai mentioned, convenience. If you can get it fixed right away and save them the time of shopping and waiting for install, etc, they will value you more, especially if they value their time.

Edited by acfixerdude
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3 minutes ago, acfixerdude said:

On a side note, when doing your cost vs replace analysis make sure you include factors like: how much is it going to cost them to replace this including delivery, install and haul away; do they have a matching set and do they want to keep it a matching set (if so now you have to price in the other piece); maybe they are looking to remodel or upgrade their appliances anyways; maybe they can afford a repair but not a new appliance, etc. Maybe they hate their washer or maybe they love it. Also think of the features the appliance has and factor in the cost of replacing it with a similar or better one, don't assume they will get the cheapest available.

Great additions to the discussion! We just repaired a small refrigerator in a mother-in-law apartment that the guy could have replaced for $450. But - it fit perfectly in the cabinetry and he's a busy guy who just didn't want to deal with the research and hassle of replacement. 

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Yes.  On fixing a dishwasher for $150, people will think "But I can get a new one for $300.  No, you can get a new one for $300, plus installation costs, which are about equal to the labor costs of the repair.  So it might be $150 vs. $450 not $150 vs $300.  And yes, that doesn't include the time of picking one out.  

In my town there were a lot of people who were into buying local, avoiding the chains, and not letting it end up in the landfill.  Hey, that's another one: the only reason it is (financially) worth it to replace so often anyway is because most of the machines are made by guys being paid so little it is virtually slave labor.

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I concur. These practices have been instilled in me. I have been blessed and fortunate enough to have great teachers put in my life that instilled this philosophy in me in my early days as a helper. Our company is still in the learning and growing phase but the one thing I know is having the customers best interest in heart and doing what is best for them goes a lonnnngg way. Pre diagnosis has been a huge benefit to our 5 star review credibility. Customers love us and compliment us on our honesty and transparency. 

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