Raising My Rates

I Deserve A RaiseWhen I started my appliance repair business, I decided to undercut my competition’s rates by 10% to convert sales, book lots of calls, and build a loyal customer base.

To be honest, I also charged lower rates so I could feel comfortable during service calls considering my inexperience.  Basically, I wanted to be cheap enough that nobody would complain if it took a little longer to fix something.

And this strategy has really worked.

The phone rings constantly, I convert over 90% of my calls, I have satisfied customers who give me repeat business, and nobody complains about my turnaround time.

If it ain’t broke don’t fix it, right?


I just raised my labor rate 30% to top market, and I’ll tell you why.

First, the phone rings constantly.  It rings so much, I can’t run all the service calls myself.  I have hired other technicians in the past, had as many as three other techs working for me at one time, but I’ve discovered I’m not really looking to run a huge operation.  That’s just a personal choice.  So when the phone rings, I have no alternative but to turn away business.

I figure, one smart way to turn away business is to charge more money, right?

Best decision I’ve made since I chose appliance repair in the first place!

First, I now make a lot more per call while running the same number of calls.  Basically, I just gave myself a big raise.

Second, I realize if I’m converting over 90% of my calls, that’s actually a sign I’m charging too little.  By charging more money, some of the calls do shop around and I get a few more cancellations – mostly the penny pinchers – but I have to admit I don’t miss those guys one bit.

Third, my repeat business does not really come from my rates.  I provide great service, and it turns out the tons of positive feedback I get is about my service, NOT my rates.  All things being equal, even competitively priced, my regular customers still choose me.

And by the way, I am an experienced technician now so I don’t feel like I have to cover my inexperience with lower rates anymore, and I’m pretty proud of that.

Hey, maybe I should have done this sooner…

2 Replies to “Raising My Rates”

    1. Todd,
      That is an excellent question that comes up quite often. Competitors use that ploy all the time. Obviously it must work for some but I find it deceiving and it bothers my ethics. Any intelligent customer realizes that they must pay a service fee which covers trip time and diagnostic time. It is basically a minimum charge that has been around for over 50 years. The service charge is always built into the flat rate system that I am in favor of. I have found that quoting easy, medium difficulty and hard job labor charges plus parts to work best for me. I have discussed that concept elsewhere on my blog. The truth is customers that fuss about the service fee are usually not desirable customers. Good customers want professional fast service and don’t quibble about price. They realize that it’s going to cost them a few hundred bucks to get their appliance fixed by a pro! I have noticed that “free service charge with a repair” is popular on Craig’s List which I consider to be a place where amateurs advertise. An honest approach always works in the long run plus you don’t have to have a good memory. I hope that helps.

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