# How do you inform clients of price and service changes?



## rtztgue (Jul 9, 2010)

For those of you that are in the service industry, such as plumbing or hvac etc. I am curious to know how you inform your consistent clients of price changes or procedural changes. As a business we are unlike a grocery store where the customer can see that Mac and cheese is now on sale, or its buy one get one or that you may get a cash discount at the register. For us, we may see a client only once or twice a year, or perhaps we have constant changes or restructuring. I am trying to keep these changes minimal, but even with that I am not sure the exact way to inform clients. So far it has not been a big deal, we just submit the bills as the changes occur, but I believe the clients may have a point if they call and complain about not being informed.

As a few examples we have recently decided to have a two hour minimum OT rate, but on top of that we have had to restructure our mileage charge, our discount rates, credit card procedures, and our inventory pricing. This is due to all those various changes going on with this economy, but as I said it can be a little much to try and inform clients of new changes.... 

The method we have used to date is the simple "just make the change and see if anyone says anything about it" method


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## TxElectrician (May 21, 2008)

I have about 30 "regular customers", those that do business with me svereal times a year, some even several times a month. When we are forced to raise our prices or policies we send them a notification letter about two months ahead of the change. We have not had any complaints yet as most of these clients realize costs rise.

We do not send any notice to our other customers, and only a few have ever said anything about the new pricing.


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## cbtexas (May 18, 2007)

Well if the changes are not real drastic, I think you should just change them and be done with it. I also use the grocery store example of you go one week and milk is x.xx per gallon and 3 weeks later it is 30 cents higher. Same with gas stations. Those guys don't send letters telling customer of price changes or explaining a myriad of reason why. They just do it and it is what it is. People hear on the news of impending inflation and things are going to get higher. They already know. I think a letter highlighting price just compounds the problem. Don't focus on it. Don't sell on price. Find something else to make your company different and better.


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## gastek (Mar 29, 2011)

Prices go up, prices go down. Procedures change. Not sure why you would want to expend extra energy and money to inform them all the time something changes. People will deal with it just fine without any advance notice. Make your changes and if a repeat customer asks why something is different than the last time then inform them.


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## Oconomowoc (Oct 13, 2011)

I do plumbing service and have raised my prices several times. I don't worry bout if one bit

BUT, I'll give you a quick story about a stupid decision I made once. I decided to put my trip charge in a yellow page advertisement. Yeah, well, I don't need to explain any further given that the yellow pages is good for a year. Lol

Ahhhhhh, the lessons in business. Priceless. I've really made some stupid decisions over the years but I'm able to laugh about it.

Anyhow, just keep trucking. Remember something, that same grocery store doesn't notify you when frozen pizza jumps 20%. When I do estimates I don't even guarantee the price for 30 days anymore. I give one week or go pound sand.

Mike


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## AustinDB (Sep 11, 2006)

the counter-argument on the statements about the gas station/super market not notifying customers of price increases...they have prices clearly marked so that one can decide before purchasing. Do you guys notify the customers at time of doing the service or wait for the customer to notice on the invoice?


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## J L (Nov 16, 2009)

As a consumer dealing with services, I would expect to be notified prior to a price increase. However, when I have a contract with a service provider and am expecting a bill for $x, and a bill for $y shows up, I won't be pleased at all. 

A letter would be the formal way to do it. An email should also suffice (provided you've got emails for your service agreement customers). 

We get a letter once or twice a year from one of our suppliers telling us that coil stock is going up. We only purchase 1-2 rolls a year so it's not a big deal, but it's nice that they let us know the increase. Same for our window/door salesman. If they know one of their products that we use regularly is going to go up in price, they call to let us know.

I've found it's best to avoid surprises on the bill.


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## Oconomowoc (Oct 13, 2011)

When people call for a service call in the plumbing world about 20% of the customers ask what the ballpark price is for the repair. 80% don't ask, they just say "can you com over and fix this problem?" 

The jobs where its $500 or over requires an estimate. That means they get a price quote.

I have yet to have a customer remember a certain price from the past. In plumbing service every single call is different. If I was selling a monthly subscription to a bag popcorn and I raised the price then yeah, I would notify the buyer. How would I notify my customers I'm raising my prices? I've never heard of a service company doing that. Service isn't a commodity, prices are different for everything.

This is really a non-issue
Mike


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## J L (Nov 16, 2009)

Oconomowoc said:


> When people call for a service call in the plumbing world about 20% of the customers ask what the ballpark price is for the repair. 80% don't ask, they just say "can you com over and fix this problem?"
> 
> The jobs where its $500 or over requires an estimate. That means they get a price quote.
> 
> ...


So what changes for a quarterly service of my hvac equipment? If one quarter the bill goes up, I'm going to get upset.


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## Oconomowoc (Oct 13, 2011)

RemodelGA said:


> So what changes for a quarterly service of my hvac equipment? If one quarter the bill goes up, I'm going to get upset.


I don't do HVAC, I just do plumbing service. I also don't do quarterly service work on commercial contracts. In that situation often times companies bid on an annual basis. I worked for a large commercial company years ago where we did work for companies like Harley Davidson. At HD we would bid on 2 guys working full time and give them a contract price. 

I can't speak for other trades, only plumbing. I have some customers (residential) where I tend to be at the house 4-5 times a year. Each call is different, each price is different. They know I'm fair with prices and when I raise prices in minimal to keep up with the rest of the world. I've never had an issue. 

Mike


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## TxElectrician (May 21, 2008)

Oconomowoc said:


> I don't do HVAC, I just do plumbing service. I also don't do quarterly service work on commercial contracts. In that situation often times companies bid on an annual basis. I worked for a large commercial company years ago where we did work for companies like Harley Davidson. At HD we would bid on 2 guys working full time and give them a contract price.
> 
> I can't speak for other trades, only plumbing. I have some customers (residential) where I tend to be at the house 4-5 times a year. Each call is different, each price is different. They know I'm fair with prices and when I raise prices in minimal to keep up with the rest of the world. I've never had an issue.
> 
> Mike



Mike - do you charge a flat fee for a service call? If so, and your rate has been $x for two years and you need to raise it to $1.5x, you feel no need to notify your steady customers before hitting them with the new price?

I would not continue to do business with someone that did that to me...that's why I don't do it to my customers.


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## Oconomowoc (Oct 13, 2011)

TxElectrician said:


> Mike - do you charge a flat fee for a service call? If so, and your rate has been $x for two years and you need to raise it to $1.5x, you feel no need to notify your steady customers before hitting them with the new price?
> 
> I would not continue to do business with someone that did that to me...that's why I don't do it to my customers.


I give my customers value. If I raise my prices it's because I have to just like the rest of the world. My competition also raises prices. I don't know of one person who calls customers ahead of time and tells them "Hey we plan on raising prices do you mind?"

The fact is I'm competitive, if they want to call a different plumber then have at it. 

The thing is, every call is different so why would it matter. My most repetitive customer this year is a lady who has been a long time customer. This year I have been at either her home or rental maybe 7-9 times (off the top of my head).

Below is some of the jobs in no particular order.........
New toilet (rental property)
New kitchen faucet (rental property)
Cast iron stack repair (home)
Re-do a laundry set up (rental property)
Replace a failed pressure tank (rental property)

I've done more but I would have to look it up, I can't remember what else I did. Regardless, Each call was a flat rate trip charge that all customers get. Added to that is time and material.

In the above example I have raised my trip charge once since the first of the year. My material charges have gone up probably 5 times (guessing). My labor rate got adjusted $4 an hour this year.

In the above 5 examples each job had a separate price because they are completely different jobs.The grand total for each was what I feel is a good value. Value is best judged by the customer. I'm under the assumption my customers think I supply a great value because besides the last 2 months my month to month revenue is increasing. She received each bill when the job was complete, all they care about is the total price and perceived value attached to the job itself. 

Now consider the alternative. Should I call her each time I get an email notification from my wholesaler? Should I call her when I determined my rates should be $4 an hour more? Should I call her and explain my trip charge got raised $10?

If I call her 7 times in a year she would think I'm nuts. Besides, that's my business not hers. Her business is to determine if at the time of an emergency if I give her value. 

Never....NEVER, have I had a customer mention a single time that I raised prices. Like I said, I don't even know of a single business that would call a customer list of over 5,000 people and let them know your raising prices. These customers call based on past experience. If I did a good job they call back. If not they don't call back. My repeat business is flawless. 

My only question to others is how the heck are you telling your customer you have to increase your rates? Do you call everybody? Even though they don't need your services do you call them out of the blue and give them a warning so in the future in case they call "just be aware I'm more expensive now"

I don't get that. I don't have the time or desire to spent time calling people on this subject. Maybe i'm missing something.

Mike


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## jmiller (May 14, 2010)

Ok, you tell mrs shookman we just can't clean her gutters anymore for $85. Please!


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## TxElectrician (May 21, 2008)

If you change your labor rates 7 times in one year I'd say you're nuts 

I notify them by letter. And only concerning labor and service call rates.


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## Oconomowoc (Oct 13, 2011)

TxElectrician said:


> If you change your labor rates 7 times in one year I'd say you're nuts


I didn't. I said it changed once. Rates go up once a year. Material has gone up up non stop this year. I adjust it every month. 

Do you call all your customers? I'm curious because I have never heard of that.

Mike


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## Pearce Services (Nov 21, 2005)

If I raise my prices, and get a call for service from someone I recently serviced, (say within a month or so), I tell them that I have raised my rates a little bit to cover the recent increases in "X".

I also tell them that I am going to hold the old price for them for this service, I just want them to know that the next service will reflect the new pricing.

If I haven't heard from somone for 3 months or so, I doubt that a small price increase would even be recognized.


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## J L (Nov 16, 2009)

Funny. I just received a letter from my drywall company. It says:

To our valued customers:

I have been notified of a sizeable price increase for drywall material effective January 1, 2012, of 35%. This amounts to $.06 per square foot. I have a hard time believing we are receiving an increase of this proportion; however, we have not incurred an increase in 2011.

As always, the actual increase may not be this much, and I will keep you notified of any information as soon as I receive it.


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## cwatbay (Mar 16, 2010)

If it's steady customers on a service plan then I would write them a letter with your personal signature on it. 

No one likes surprises, especially if it costs them money. 

Plus this is your way of staying in touch and keep that personal communication path open. Email is ok, but lacks that personal touch. Frankly I would do both. 

When we have recurring monthly charges for clients, and, we can no longer keep price increases under the current plan, then we send them a letter stating that within the next 3 months there will be a a nominal monthly increase of X dollars. 

If you want to be creative, you can offer a discount plan at this time if the client extends their service contract for an additional year or two years or whatever and lock in a particular price (assuming that you can afford it ---- this may take some critical thinking).

I would not make a long explanation about it, then it starts to sound kinda phony ( and you just want more money). Simply explaining that your costs of materials and labor have increased, and, that you can no longer absorb the costs without charging more.


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## flashheatingand (May 3, 2008)

I am just a hucklebuck m.f., but my first customers get the same diagnostic fee. My diagnostic fee doesn't go up for any existing customer. Same with everybody else, the diagnosis charge will stay the same. Just a way to say thanksl

Their word of mouth is priceless, so why risk alienating them with the service call? As for the repairs, that is a different story. If the widget needs to be changed, that charge changes with the times.


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## Oconomowoc (Oct 13, 2011)

RemodelGA said:


> Funny. I just received a letter from my drywall company. It says:
> 
> To our valued customers:
> 
> ...


That's different. That's a subcontractor notifying a GC. In plumbing service its with the end user. People call. Ask how much. Make decision. Go plumb.

I don't sell a commodity, everything is custom and everything has a different price. For me at least, it would be a total waste of time not to mention it would be weird calling thousands of consumers who really don't want me calling out of the blue.

Mike


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## J L (Nov 16, 2009)

Oconomowoc said:


> That's different. That's a subcontractor notifying a GC. In plumbing service its with the end user. People call. Ask how much. Make decision. Go plumb.
> 
> I don't sell a commodity, everything is custom and everything has a different price. For me at least, it would be a total waste of time not to mention it would be weird calling thousands of consumers who really don't want me calling out of the blue.
> 
> Mike


So you don't have a set trip charge that includes you driving to their house and working for a set period of time - typically the first hour? Well then good for you :thumbsup:

And I think the vibe here is that you're not calling every one of your customers from the last 10 years, you're calling (preferably mailing) those clients that tend to use your services most. This also doubles as a marketing message because you're putting your company on their mind again. And like CWB said - maybe you let them know that if they schedule something in the next 30-60 days you'll give it to them at the old price. May help to drum up some more work.


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