Should your field service business include a trip charge or minimum service fee?By My Service Depot on Wednesday, March 17, 2021
Be fair to yourself and to the customer. Remember; time is money. It’s good to charge a minimum service fee.
When comparing your business to other businesses in your field, you might notice that a good amount of them have some form of inspection, trip charge, or similar minimum fee for their visits. This is an excellent practice, as it allows you to demonstrate your value to your customer, as well as ensure the visits you make remain profitable for your business.
Your knowledge is valuable.
You and your team have spent years cultivating the experience and knowledge that you rely on to resolve issues reliably, quickly, and efficiently. An issue that takes your service technician 10 minutes to resolve takes only 10 minutes because they’ve worked hard and accumulated 10 years of experience. That makes them, their service, and your business more valuable.
When you provide your customer with speedy and accurate service, you can also guarantee a satisfactory job by providing them with a quick assessment or inspection of the related systems. Not only will this provide some extra peace of mind for your customer, this process helps identify other issues on the horizon for the customer’s property. If you can provide the customer with an expedient resolution to their issue along with a quick and comprehensive report on their system(s), they will be sure to request your services again!
To review, quick and comprehensive quality service is worth good money. The best way to express this to your customer while avoiding complaints is to provide a quick summary of the resolved issue and an analysis of their equipment. Not only does this justify the cost by going above and beyond, you also demonstrate to the customer that you have kept their best interests in mind.
Recover fuel and vehicle maintenance costs.
It takes time for your service technician to arrive at the customer’s site, whether that’s 10 minutes or an all-day adventure. Keep this in mind when deciding whether or not to charge a minimum for your services. Whether it is time spent in traffic or time spent reaching customers on the edge of your territory, keeping your service technician and service truck on the road costs your business money.
When discussing a minimum charge for your services, consider talking about the expenses involved in vehicle maintenance. Gas, oil changes, and insurance should get factored into these service fees. Although some of these expenses may be negligible for jobs just around the corner, other sites may take an hour or more to reach. Charging a fair amount for your time and travel on all jobs will help you offset the costs of those longer trips.
In addition to vehicle costs, your company might also invest material costs in the form of tools, trash bags, gloves, and other supplies that wear down over time. If you only charge for parts and labor, you could lose money in the form of broken and worn down equipment not properly factored into your overhead.
Your business invests in the customer when you take your equipment to the job site. Covering your equipment costs means not only replacing equipment when it eventually fails or requires maintenance, it also means keeping quality equipment that helps you work faster and more efficiently.
Should your business charge a minimum for every service call?
When you consider the experience of your service technicians and the cost of owning and maintaining your equipment, your customer couldn’t get the job done without you. If you want to be your customer’s go-to service business or if you want to reach more customers for small issues, a service minimum will make it worth your efforts.
We recommend talking to your service and accounting team about the expenses incurred on the company during a standard workday. Explaining the importance of this service charge will help your team answer customer questions about why your business includes a minimum charge on all site visits.
How can you start?
Take a look at your field service software. Good software can automate the process of charging the right amount for the job, as well as keeping track of the time and expenses your business invests in delivering a satisfying result to the customer.
The field service management software Smart Service has a feature that tracks your service technician’s time on site and can automatically apply your minimum hourly charge with the click of a button. This gives you a great way to round up on the time you spend on site while still tracking your travel and payroll expenses.