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The Anatomy of the Free Plumbing Estimate
I’ve mentioned “free estimates” on theplumbinginfo.com before but just in passing. I have never broken it down to explain why it is bad for everyone’s business in every trade (theplumbinginfo.com is focused on plumbing but these concepts are universal).
Free Plumbing Estimates in Perspective
I think a comparison is necessary in order to put the “free estimate” in proper context. Let’s say you aren’t feeling well, you’ve had some digestive issues ranging from an upset stomach, to heartburn to nausea. You can’t keep it under control no matter what over-the-counter drug you take, and you’ve tried them all. You’re like many of us, you avoid the doctor at all costs but you decided to cave in and make an appointment. So you go to the doctors office and you fill out the paperwork because this is a gastrointestinal specialist and you’re a new patient. You get called into the doctors office and the nurse takes your vital signs and asks you what ails you. You let her know about your stomach woes, but you also tell her that because there are other gastrointestinal specialists in the area that you’d like the doctor to check you out and give a free estimate on what he or she thinks the problems are with your gut. You add that “times are tough” and you’re just looking for the best price to patch things up. How long long do you think it would be before you were escorted out of the doctors office?
You’re a Plumbing Expert, Act Like One
Some of you will understand this analogy but others will scream “you’re not a doctor” it’s different. The health of your body is more important than the health of your home? I can appreciate that although the health of your home may also affect the health of your body, but that is for another article. So I would ask “how is it different?” The doctor went to school for a long time to earn that MD or DO title, most legitimate plumbing contractors had a 5 year apprenticeship to earn their plumbing license and then earned their business degree from a college or from spending a long time with another contractor learning how to run a company. A doctor has huge malpractice insurance premiums right? A contractor in the trades has huge workers compensation as well as general liability insurance premiums. A doctor has a nurse or nurses as well as a secretary and other staff to manage accounting, office space and equipment purchases and upkeep. A well run plumbing contractor has dispatch, inventory control, accounting, supervisory personnel, an estimating department, equipment purchases and upkeep, fleet maintenance, rent or a warehouse mortgage, fuel, subcontractors as well as the technicians in the field. There is no comparison between the overhead a well run plumbing contractor has to that of a small to medium doctors office. The contractor wins that battle of overhead hands down.
Everyone’s Time is Valuable and so is Yours
So why is it so difficult to “stomach” a contractor that wants to be compensated a small amount for his or his technicians time? First of all, the blame lies 100% on the contractor who gives out his time and expertise for free. The consumer is just taking what is being offered. The problem lies in the contractor not giving any value to his or her time. I know most contractors that give free estimates will say “we have to offer free estimates just to get in the door”. This is false and misinformed, the most successful plumbing contractors around the United States DO NOT offer free estimates. We find that if you put a premium on your time, your companies time, your potential customers will realize you have a business to run and will put a value to it.
Understanding the Cost of a Service Estimate
I’ll wrap this up by giving you an argument I had the pleasure of hearing from a customer several months ago. After being told the company charges a $65.00 call out fee he became rather irate and said “why should I pay you for the opportunity to do the work in my house?” “I mean if you had a technician going from house to house in an 8 hour day you would collect $520.00 for doing nothing” Let’s break down that argument. First of all what service company, plumbing or otherwise can make sure all of the calls are close enough to get in 8 calls per day? It’s nearly impossible. Not to mention if you have technicians going on 8 calls in one day you aren’t giving your potential customers the service they deserve. Now let’s break down the money issue, in that $520.00 per day the technician doing the work must be paid for his time, his or her time is worth something so remove that from the total. Next you have fuel consumption which we know is expensive, so take that out of the total. Now you have overhead, advertising, profit etc. which as you can now see the $520.00 doesn’t even come close to covering. Think about it this way, if a consumer got three or four free estimates for every project they did around the house 2/3rds of those contractors would walk away with nothing. They would have given away their time and expertise for free.
Again, I hope this helps contractors reevaluate how it is they interact with their potential customers and I sincerely hope this article gives some perspective to consumers on how service contractors do business.