# Ethics vs bottom line



## Grumpyplumber (May 6, 2007)

*A few comments today on another thread in the plumbing forum spurned some thought.*
*I generally go out of my way to be honest with new customers on the idea that it generates repeat business and keeps ad costs down.*
*I DO NOT lowball, I simply don't take advantage in situations where I could rake in the loot when I see a bambi in the headlights. (Yes, I let them know it...gotta get the brownie points)*
*It works, I get alot of repeats and referrals, but I also get burned at times with folks that'll nitpick or try to get extra's out of me while I'm still there after the checks cut.*
*A good friend of mine from another part of the country tells me that the two largest & most successful plumbing outfits in his area ironically have the two biggest lists of BBB complaints.*
*I imagine they have vast ad budgets, but apparently the "take the money and run" routine works.*

*I know quite a few guys in my area will intentionally play the extra game after quoting a low price to make up for it after the fact.*
*Then there's the opposite extreme, guys who are so anxious about scaring customers with price that they take chances and hack the work just to "giterdun" cheap.*
*I have built up a handful of loyal customers over time, but honestly I find myself wondering if it's worthwhile to go out of the way when so many more seem to not care about anything but price.*

*Just wondering what school of thought you guys subscribe to, and how effective your particular tactic has worked.*


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## KillerToiletSpider (May 27, 2007)

Grumpyplumber said:


> *Just wondering what school of thought you guys subscribe to, and how effective your particular tactic has worked.*


I will not hesitate to say we are the most expensive contractor in town, and we have a handful of architects and designers that will specify we are the only acceptable plumbing sub for their jobs, it is not negotiable. There are four large high rise buildings that will only allow our company to work in the building. We got there by doing a complete and thorough job the first time, every time, and by solving problems no one else ever gave the time to figure out. My guys never get told to hurry up and get it done, they do get told to take your time and do it right the first time. I'd rather lose a day on the rough than spend two days and who knows how much ripping stone off of walls to fix it on the trim.


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## Double-A (Jul 3, 2006)

Folks in this area have tended to be quite loyal to the plumbers they feel are honest, as a result, its a tough nut to crack to open a new plumbing service company here in Central Arkansas.

Families tend to pass their plumbers down like fine china. If that plumber was daddy's plumber, you can bet he's gonna do the kid's service work as well. 

As far as ethics go, I'm 100% with Grumpy; its much better to serve a client honestly than to try to take advantage of them in any way. A fair price for a good job is how I define this. Fair being, fair for everyone involved.

Central Arkansas has a big city feel in many ways, but still has some small-town thinking. If you upset someone, you can bet they are going to tell everyone they know -- and you never know when that is going to catch up with you. My bet is, at the worst time possible.


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## masterk (Dec 29, 2007)

I always tell my customers that I am not the highest or lowest. I then take the extra time to explain quailty in both the parts I use and my craftmenship. Then last, I ask them the differance between a vette and a cavalier, when they tell me I say well there both chevy's. End result car's are very different in price and function, just as plumbers are. I never liked having to explain myself in the past, but by doing this I have increased my volume of work.

Here we are required to give a one year warranty on the job. When it's a job that you know is going to last alot longer than that I'll give a two year. The customer feels that they are getting more for there $. This has also helped increase my volume of work.


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## Mike Finley (Apr 28, 2004)

I understand the thought process of "being honest on the idea that it generates repeat business and keeps ad costs down". I don't really subscribe to being honest only for ulterior motives, for me it's much more about being honest whether somebody is looking over your shoulder or not, whether there is a chance of being caught or not. Set the ethical compass and stay on your course for the sake of being ethical, not what it might or might not return to your business. 

To me there is a parallel to Christian ideals and being religious. You can be very pious, go to church 3 times a week, know the Bible inside and out, be able to recite verse and still be a huge scum bag. Then there is the other side, where a person lives their life being a good person, honest, fair and forgiving, trying to live a life to be looked back upon without regret.

To me the latter version is more applaud-able, and I would rather be surrounded by people like that who were truly good inside rather than 'religious'.


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## Double-A (Jul 3, 2006)

You're not alone in those feelings, Mike. I feel the same way.


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## smellslike$tome (Jan 22, 2006)

Always do the right thing simply because it's the right thing to do.

Never tell someone they "need" something when they don't.

On the other hand, always offer options. How do you know Mrs. Jones might not *want* that new, brushed nickel, spout spray, kitchen sink faucet rather than repairing her old faucet. I have sold many fixtures/faucets simply by bringing them in and opening the box. I'll say something like "I can repair your faucet for $XXX.XX with X warranty or we can install this for $XXX.XX and X warranty. Just give them the option and shut up.


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## Grumpyplumber (May 6, 2007)

*Great answers.*
*I get underbid often, I also get comments on what customers were quoted from competitors...sometimes I have to pause with some of those prices to wonder why & how they charge so much.*
*The ethics goes both ways on this...*
*The obvious being those who take advantage of customers lack of knowledge, the other side being when you're constantly lowballing and getting work solely based on price, you're taking away from other shops in your area - driving your trade down.*

*I'm happy to say to my fellow tradesmen that I don't play price games.*
*I'm also happy that most of my customers know they can trust me.*

*The ones that still complain regardless how hard you work, or what price you give them make things hard to keep in perspective sometimes.*


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## skyhook (Mar 17, 2007)

Grumpyplumber said:


> *but apparently the "take the money and run" routine works.*


It seems to be working for the oil companies.


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## Milhaus (Feb 11, 2007)

I believe the same on the religious junk Finley. 

I've been questioning myself lately on pricing too. I've had a couple of decent paying jobs that ended up well. Then I start questioning whether or not price was too high, if I am ripping them off. It's a bear to stay in the frame of mind that I offered a service with minimal straying from the original contract, no hassles, and good service. That costs money. I'm not for ripping people off, but making good money balancing a project with 50 potential problems is not a bad thing. 

I'll take the honesty route. But, it still boils down to what you think you're worth and what the customer thinks your worth. Seems like they no matter what you do, they still think your trying to rip them off.

mark


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## Putty Truck (Oct 6, 2007)

On the west coast, people tend to move around a bit. Within a few square miles, I'll bet there are 10 homes for sale and they will be sold soon. The people will be gone and new ones will be here. I bet 25% of the current residents are native to the area and the rest are newbies or passing through. How loyal should I be to that demographic?

In my immediate neighborhood, the average length of stay is 30 years (its killer here), but I haven't said more than a few words to my neighbors in years---do I know or care who does their crafts? Nope and they probably do it themselves.

Am I honest? You bet. Am I expensive? That depends if you're poor, I suppose. Will I bend over backwards for a ho? No way. Do I bid up the price on a job? Only if I'm blind sided by something..

What the hell was the question again? Was it "Does Grumpyplumber know how to bid to a ho?"


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## CPlumb (Jan 17, 2008)

Ha Ha !! Good one Putty ,,, I wander off at times too !!

Ethics vs bottom line ? Seems to me that we are all giving the same answer . I make plenty of money when charging my norm . Yes my prices are too low especially in the area I work . Got a big surgery coming up and will be down for 4+ weeks . Planning on re-working my price book at this time . So IF there is a next time I won't have to stress SO MUCH ! 

Now -- How does this tie into the question ? If I come back from surgery WITH A VENGEANCE against all homeowners and their wallets because i'm bitter that I wasn't smart enough to save more $, that would make me NO BETTER then the "Grab & Run " big boys . Spiritually , I refuse to do that . 

Now, If I raise my prices , say $ 25-$60 per job (as feasible) and continue to offer my customers great service / quality /commitment . I am now looking at $ 18,000 --$45,000 MORE a year ( that's $25-$60 x 15jobs x 50 weeks ) .

Anybody NOT want that money ?? I don't have to force sell , I don't have to lie to ho's , I don't have to sacrifice my ethics . We just have to have confidence in charging what we are worth .

Sorry to wander off ,,,, it sounded good in my head .
CP


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## DavidC (Feb 16, 2008)

Here's an explanation of a fair price that I read about years ago. 

A fair price is when both parties feel they have gotten a good deal.

As a tradesman, you need to make sure you are paid a reasonable amount to sustain a decent standard of living. Your customer needs to perceive value for their money. As a businessman you should be watching both sides of the line.

It's tough sometimes to notice how some of the others can rake in the cash while taking advantage of the clients. There is a roofing contractor in my area that has been at it for years. He makes a killing, has very few repeat customers and you can forget about him ever coming back if there is a problem. I've fixed a few of his screw ups and shake my head wondering how he gets away with it. He must have the gift of persuasion. I'd rather be out of business than make my money like that.

Now everybody knows that you plumber guys make more money than doctors. Imagine my glee when I discovered that our hourly rate was higher than my favorite plumbers. But it's a fair price.

Good Luck
Dave


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## AtlanticWBConst (Mar 29, 2006)

We believe in ethics at all times for business, and life.

We always send back overpayments immediately (over $15K last year).
We try and always give cost breaks to the single mother raising their children.
We give discounts to certain senior citizens on fixed incomes.
We allow cash strapped folks to pay us "next month" or in payments, if their repair work has gone over their budget.
The extras on residential work are always calculated, based on the actual hours used and materials +20% markup. Not by inflated numbers.
If the client is paying for materials, we always refund them for any materials returned.
Several times, suppliers have let us out the door, and forgotten to charge us for material. We notify them.
If we break, dent, or damage something, even minor, on a client's property, we tell them, and don't wait to be asked.
If it's not installed right and the payments have all been made, we will go back and fix it, without being asked.
If it's not up to code, we refuse to cover it up.
If we see that there is something "fishy" going on somewhere, on the job, we will bring it to the client's attention, in some tactul way.
etc, etc, etc.

Do we think we are better than anyone else? Do we think doign any of these things is something incredible?
Absoltutely not. These are things we feel, are our duty and responsibility to do. We SHOULD be doing that. 
To not make an attempt to do so, is despicable.

Sometimes, it has alot to do with how you are raised. Ethics are morals.
My mother brow beat us with the responsibilties of doing what is right at all times...There were no other options. My business partner was raised the same.


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## AtlanticWBConst (Mar 29, 2006)

Ethics - The discipline dealing with what is good and bad and with moral duty and obligation...the principles of conduct governing an individual or a group... -http://www.merriam-webster.com/dictionary/ethics

Ethics can define who we are as a person. 
They can define who we are as a company. 
They can define the quality of the work we do.
They can define the way we make a profit.

If we are solely focused on profit, and not concerned about doing what is conscionably right, then we are in company with some of the most notorious names that have come down through the annuls of history. Enron, is such a name.

The "desire" to be ethical and the "ability" to be ethical, go hand-in-hand. 
One, cannot exist without the other.

Either you are, or you are not.


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## Mike Finley (Apr 28, 2004)

Sometimes I feel it's our duty (the good guys) to even out the karma in the world. There are so many scum bags (watch that to catch a predator show just once!). We are doing a job for a 65 year old widow woman. When we signed the contract 8 weeks ago the last thing she said to me was - "Let me know if you are going to need more money.", I kind of looked at her funny trying to figure out what she meant. She said "I have to transfer money from my accounts so just let me know if things cost more so that I can transfer money so you won't have to wait for it." 

I reasurred her that the price on the contract was a fixed price and I didn't see anything in this job that would end up having to cost more (hidden defects), and that the price shouldn't change unless she decided she wanted to add something.

She again says just let me know if I need more money, I know how these things can go, I just want to make sure you are making some money on this.:no:

When I left there I was really glad she had signed up with us, all I could think was that she is the perfect target for some scum bag to take advantage of. You know the scenario where the little single old woman ends up paying $120,000 for some siding, new windows.

A lot of times I feel it's our duty to watch out for those who are easy targets in this world. That's the way I feel. I'm sure some people would laugh at that or call me naive.


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## kevjob (Aug 14, 2006)

character is defined by what you do when no one is looking!


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## Tom M (Jan 3, 2007)

Is there any doubt that cost , ecomony and competition all go together. It has never cost more to run and operate business nor has there been more contractors bidding on the same thing. I get irritated and walk away from a job that is not a fair request or realistic task quote. Everyone does it different.


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## smellslike$tome (Jan 22, 2006)

Here is the difficulty. Contractor/service provider A and contractor/service provider B, for a given job and all parameters and materials being equal should have roughly similar material and overhead costs. A however is content to use the cheapest labor he can find and B wants his people to make a decent living with the best benefits they can afford. A figures he's rolling in it with a 5% profit and B feels like 30% is perfectly reasonable. All of a sudden A is all noble and B is a scum bag rip off artist because he ended up charging 2x what A did. I know there is abuse and I know this is a simplistic example but when Blowe's will send a so called "installer" to put in a new 40 gal gas Whirlpool water heater for $550.00 (this includes the wh) and I want twice that to put in a quality product that they won't be calling me about in 3 months because it's not working, does this make me a rip off artist? I'm not talking about slick talking people into buying things that they don't need or want or lying about the condition of equipment but if someone presents a price for a job and the customer agrees and authorizes the work and is happy with the result my question then is, has anybody been ripped off simply because someone else would have done it for less, possibly much less? I went on a drain call this afternoon and while I was there the ho was telling me about other plumbing companies that had been there in the past. He, at one point had been quoted $1400 to run about 25' of soft copper gas line to supply a gas grill on a deck. I'm slow to criticize other plumbers so although I thought that was pretty high I didn't say so. The ho then proceeds to begin to tell me what he had it done for but I stop him and say "let me figure what I would have done it for". Now I didn't make anything up, I calculated it right out of my price guide which lists prices, so much per yard of pipe, so much per fitting, etc. I knew I wouldn't be at $1400 but I wanted to see where I would have fallen. So my price came to $539 which was $200 more, it turns out, than what he paid to have it done. Now if the $1400 company had never been called and it had just been the company that actually did the work and me I would have been right at 60% higher than them. Does this make me a rip off artist? Now add the $1400 company back in the mix, now all of a sudden I don't look unreasonable anymore but the $1400 company are the bad guys. If I sell my company to the customer and can satisfy them that what I am offering is what they want/need and they agree on the price and then I deliver exactly what I promised, is it even possible that the price was wrong. I'm not talking about making a game of it as I know some do. I'm not suggesting just "going for it" to see just how much you can squeeze out of someone, but if you set up a pricing system and it's the same system you use with everyone then won't the market determine whether your system is right or not? If I sell residential 40-50 gallon water heater installs for $10,000, guess how many I will actually sell? If I sell the same wh installs for $550 of course I will sell a lot more I just won't make any money but if I have a standard install for $1100 and a deluxe with more features, better warranty etc. for $1600 I will sell some and make some money but am I a crook because someone else will give them hot water for $550?


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## Grumpyplumber (May 6, 2007)

DavidC said:


> Now everybody knows that you plumber guys make more money than doctors. Imagine my glee when I discovered that our hourly rate was higher than my favorite plumbers. But it's a fair price.
> 
> Good Luck
> Dave


*Dave, I know you well enough to know you were kidding, of course.*
*However, thats a real steriotype that often causes homeowners to beleive the price is too high...regardless what we quote.*
*Which is part of the reason for the thread...sometimes I feel like just throwing out rediculously high prices and taking fewer jobs for more money, enabling me to use better stock and take more time.*
*I suspect that would increase my ad budget though...I wonder if there isn't some equation there.*

*Smellslike...you got it nailed.*
*I have been underbid by HD subs who go in and do a water heater for 150-200 less than I do.*
*What burns me up is the subs only get a fraction of what HD charges...the subs have no choice but to upsell on "necessary" extra's to homeowners to make a living, leaving me out of a job and the unsuspecting homeowner out more money.*
*I've gotten to the point where I rush bargain hunters off the phone with a price and state thats final just to save my time and trouble.*

*Putty Truck..I know how to price.*
*I think it was a post of yours that got me thinking about ethics vs pricing.*
*I'm not stupid enough to think I'll get more than one, maybe two jobs a year per customer.*
*I have an example for you in particular.*
*A simple lav faucet replacement I did last year in early winter, the guy told me when I was done that he'd gotten one other bid at $150 over my price for the same faucet (almost double for labor, maybe with a higher mat'l markup).*
*I got it done in less than an hour, made decent money for my time.*
*He called me back in the spring, I wound up doing a $9,000 boiler upgrade for him over the summer.*
*He didn't bat an eye on the proposal, he trusted me.*
*That was a nice score, all for not doing the "hit and run".*

*Then there are the far more frequent opposite extremes, the "I'll be doing some work in six months...maybe we can talk about that also" routines...the folks that dangle a carrot thinking you'll work cheap to get the extra work.*
*I don't bite, my price is my price.*

*Cplumb, smart man to have the cash reserve, knowing things happen.*
*You're right in thinking it would be wrong to financially torture customers over something you hadn't been smart enough to prepare for...good man.*

*I wanted some insight, and man did I get some.*

*Thanks guys.*


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## smellslike$tome (Jan 22, 2006)

*Smellslike...you got it nailed.*
*I have been underbid by HD subs who go in and do a water heater for 150-200 less than I do.*
*What burns me up is the subs only get a fraction of what HD charges...the subs have no choice but to upsell on "necessary" extra's to homeowners to make a living, leaving me out of a job and the unsuspecting homeowner out more money.*
*I've gotten to the point where I rush bargain hunters off the phone with a price and state thats final just to save my time and trouble.*

I'm in Alabama and I had a guy in Georgia call me last year who wanted to pay me to "randomly" check gas appliance installs that his guys would be doing for Blowe's. He swore up and down that he wouldn't be doing water heater installs and just needed me to check some jobs to make sure everything was correct. This of course would require my master certification being used by his company. I had to laugh. This guy actually thought I would give him the use of my license so that he could send out his flunky's to do work which if done improperly could VERY EASILY kill people and that he could pay me $100 to go by once a month to look at a job and pronounce *all of his jobs ok*.

I have a friend who was a former employer of mine who told me last week that he went on a call for some problem with the ho's wh and when he got there he found that the gas was a 2# system with no regulator serving the wh. The ho reported that the "installer" from HD (I think it was HD but it might have been Blowe's) informed him that "Oh you don't need that (gas regulator)."

I know this thread is about ethics and I don't mean to hijack it. My point is this: just because a quote may be 2X, 3X, 5X higher than another, does that necessarily mean that the higher quote is an attempt to rip someone off? What is the value of the service, the value of the company? There are so many things involved right down to whether you are going to have to clean up a huge oil slick from your driveway that Bubba and his cheap install left behind from his truck. If you are more than another guy and you give no better service than he gives then maybe it's harder to justify but if you and your company are daily striving to give the finest service in your market, then first of all it will cost you more to do that than what it costs Bubba to roll up in someone's driveway, throw it in and leave, and second your service is simply worth more than his service. 

In this business it is not necessary to deceive anyone into spending more money with your company. If you will do this one thing you will make more money. Simply offer the ho options. I can repair it for this, or I can install this new standard grade for this, or I can install this deluxe grade for this. Nicer things cost nicer money but it is the customers choice. LET THEM CHOOSE! Many will want the repair only, some will want standard replacement, some will want deluxe, but let them choose and make more money. There is nothing unethical about that!


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## Mike Finley (Apr 28, 2004)

I think the litmus test is easy. It's historical based upon delivering consistently upon customer expectations.

I think there is no confusion between a high priced company who consistently delivers upon customer expectations. This company will have a long list of satisfied customers and a good reputation in the community.

Versus

A high priced company that has dozens of complaints lodged against it with the Better Business Bureau and the attorney general, and has a long list of unhappy customers.

In the end it doesn't come down to how much is being charged, it really comes down to what is being delivered.


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## Putty Truck (Oct 6, 2007)

Grumpyplumber said:


> *Thanks guys.*


We're not done with you yet.



Grumpyplumber said:


> *...**Putty Truck..I know how to price.*
> *I think it was a post of yours that got me thinking about ethics vs pricing.*
> *I'm not stupid enough to think I'll get more than one, maybe two jobs a year per customer.*
> *I have an example for you in particular.*
> ...


One or two jobs a year would be sweet, but take my house, for instance...I've lived here 2 years and not one thing has gone wrong and its 15 years old. Sure, its slated for demo as soon as I get the cash money, but that's not the point. Repeat business I do not count on. If I sold pizzas, maybe....

Why is my price on the high end? Is it the well maintained trucks, uniforms, licenses, insurances, schooling, communications, ads, warranties, workers or a combo of all the above?

Is it because I'm really good at what I do and demand a better price?

Or is it that I'm unethical? Ethics is in the heart of the beholder and my ethics are just fine, thankyouverymuch.

The reality of the deal is this. This This. I can do one job to your two and make more money. Multiple that out (ignoring all the scary monsters that eat profit) by a few men and I'm cool. In a perfect world, of course.

We are not plumbers. We are businessmen.


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## mahlere (Aug 6, 2006)

there have been studies...average customer needs a plumber roughly every 9 months..an HVAC contractor roughly every 24 months, and an electrician roughly every 3 yrs....

you need to ethically (ethically being the keyword) take advantage of every call and maximize it monetarily...

do not sell what's not needed...but try to sell them everything that is needed...

it's a fine line...but I liken it to taking a car to a mechanic for an oil change...when he has the car on the lift, he notices a crack in your break line, leaking brake fluid...do you want him to tell you? or just change your oil and send you on your way, so he doesn't appear 'unethical'?

tell me, and let me make the decision...same with your customers...no GFCI's in the house, tell me....no clean out in the basement, tell me...called out replace filter in the HVAC system, and notice that they don't have a set back t-stat? tell me...

don't tell me I need a new water heater when my kid shut off the breaker...but if my water heater is 8 yrs old, and only has a 6 year warranty, tell me and give me the option...


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## Grumpyplumber (May 6, 2007)

*All good points.*
*I'm tossing out two extremes here, price gouging/ questionable tactics and lowballing.*
*Neither are good IMO and the replies are fantastic here.*

*Smellslike...*
*I'd have called the local inspector or state board on that company...I don't think that'd be unethical.*
*Allowing that jackass to find some fool willing to accomodate him would be unethical.*

*Mahlere,*
*great stats, 9 months sounds about right..oddly I have gotten some first time customers that'd called me numerous times in a year, many more that I never hear from again, and likely resort to DIY rather than pay a pro. I'm trying to weigh the worthiness of either upping my rates and pursuing potential upgrades more aggressively while on the job...it's a fine line between ethical and smart business.*
*The other end of the spectrum is only a fool beleives that lowballing is good business.*

*Putty, *
*You might be getting the wrong impression (or not), I'm very seldom the low bid.*
*That right there is part of the reason I posted this thread.*
*I often find myself second guessing whether it would be worthwhile to take a $100 hit on a water heater just to fill my schedule.*
*The logistics of repeat business from that demograph dissuades me, do I really want repeat/return business from customers that prioritize price?*
*NOPE.*
*There are larger shops that bid higher than I do, for the most part they are notoriously high in my area...part of me feels like I ought consider the idea that if they are able to bid that high, something apparently works for them.*
*My guess is the ad budgets for those shops is HUGE...as they say "Throw enough sh-t against the wall and some of it is gonna stick".*
*Over the years I have also noticed a trend with some of the MUCH larger shops...they pummel local radio, TV and media with ads for maybe a year or so...then stop.*
*Makes me wonder if one of two things are happening, either they burn the market and max their ROI to the point they either down size or reopen in a new name, OR they accrue enough residual/referral & repeat business to end the ad campaign.*

*I need to be clear here...I DO NOT harbor ill thoughts, or speak badly, of any company for the rates they charge if they charge more than I do.*
*Part of my thinking is more of the idea that maybe I should be upping my rates to keep the playing field level. *
*One concern is my close rate would go down even further, increasing my ad budget and possibly creating a hole I might have a hard time getting out of.*

*Charging $250 for a boiler thermocouple that takes 15 minutes on a retired womans home with a fixed income is unethical.*
*Expecting to make $100+ an hour for emergency/service work during regular hours is good business.*



Putty Truck said:


> We are not plumbers. We are businessmen.


*We are both, I agree with your point.*
*A great plumber can diagnose, install and troubleshoot effectively, but could lose his shirt in a month in self employment.*
*A good businessman can hire great plumbers and knows how to price and run a business with all overhead.*


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## mahlere (Aug 6, 2006)

Grumpyplumber said:


> *Charging $250 for a boiler thermocouple that takes 15 minutes on a retired womans home with a fixed income is unethical.*


why is this unethical? what if you're billable hour rate is $250 (not that extreme, especially for a well run flat rate shop)...this 15 min job is minimum an hour of time on site between diagnosing, talking to the customer, doing the work, clean up, billing, etc...and possibly an hour or 2 in travel (that all depends)

so, you need to charge $250 to do the job to make your money...is it really unethical?

now, if you were a knuckle-dragging turd herder who would normally charges $100 to change it, but figure you can get one over on this little old lady and bang her for $250...then that's unethical...

the difference is what she gets for $250...company 1 - qualified techs, drug tested, insured, etc...

company 2 (in this example)- unqualified tech who is probably high on drugs, doesn't clean up, doesn't explain the situation to the lady, won't warranty the work, etc...

that's the difference between ethical and unethical...


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## Mike Finley (Apr 28, 2004)

Any company dominating the market mindshare in an area like the ones you are describing can and should be the highest priced company. That branding that they pay dearly for helps them not be shopped as much as you are, and therefore they keep a high enough closing ratio at their high prices to keep paying for those expensive ads to run all the time. They are staying at the top of consumers awareness which pays huge dividends.

While you might certainly be able to raise your prices, (you might be lower than you need to be) the pricing comparison to yourself and them probably won't hold true. Looking at them as a bell weather for your pricing is probably not accurate, because they and you are usually not even seen as equal compeitors. I'd predict you will have a hard time pricing as high as they do, you and they are not on an even playing field with your leads.


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## Grumpyplumber (May 6, 2007)

mahlere said:


> now, if you were a knuckle-dragging turd herder who would normally charges $100 to change it, but figure you can get one over on this little old lady and bang her for $250...then that's unethical...
> 
> the difference is what she gets for $250...company 1 - qualified techs, drug tested, insured, etc...
> 
> ...


*I'll elaborate, the example I stated was a real one.*
*I'd replaced a water heater for this woman at my usual rate, she told me the last plumber she'd called was from down the street, she figured he'd be reasonable as he was so close, and he'd do it right for the sake of reputation. She refused to call him again, after watching two kids under 20 come in and get it done in under 15 minutes while talking to the boss over the Nextel.*
*Too many shops in my area skip the formalities and use the Nextel to coach unlicensed guys along at regular rates.*
*I guess it's not so much ethics as it is overhead (barring the unlicensed part).*
*BTW..."knuckle-dragging turd herder"..hilarious...I like it!*



Mike Finley said:


> While you might certainly be able to raise your prices, (you might be lower than you need to be) the pricing comparison to yourself and them probably won't hold true. Looking at them as a bell weather for your pricing is probably not accurate, because they and you are usually not even seen as equal compeitors. I'd predict you will have a hard time pricing as high as they do, you and they are not on an even playing field with your leads.


*I agree with your whole post (I edited the first half to make room).*
*Branding is what I'm curious about, my credit has been increasing surprisingly fast over the last few years and I'm potentially sizing up using it to my advantage.*
*So many small details have to be scrutinized, like ethics vs profitability, ROI/target marketing, legal/liability, payroll...the list goes on and on.*
*Now is NOT a good time to expand, I know...but it is a good time to look into all those things with the extra time I assume I'll have on my hands in coming months.*


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## DavidC (Feb 16, 2008)

Grumpyplumber said:


> *Dave, I know you well enough to know you were kidding, of course.*
> *However, thats a real steriotype that often causes homeowners to beleive the price is too high...regardless what we quote.*
> *Which is part of the reason for the thread...sometimes I feel like just throwing out rediculously high prices and taking fewer jobs for more money, enabling me to use better stock and take more time.*


The fair price quote doesn't neglect to mention an amount. It doesn't matter if your rates are $10/hr. or $1500/hr. What ever it is it needs to suit the needs of your business, provide for you and your family and at least give you a shot a attaining your profit goals. At the same time your customer needs to perceive it as reasonable value.

It may require some sales skill to bring the job in, but it's how you treat your customers once you have it. In other words, you won't cheapen the job by using lesser materials than you sold, won't cut corners to get it done faster and you'll stand behind your work when necessary. 

Consistency has been mentioned also. Charge all your customers the same rate. Nothing wrong with the $250 boiler call if that is what you normally charge. Nothing wrong either with giving the widows a break in some situations. Advertising more makes more sense to me than cutting your rates to get more work. 

The roofer I mentioned uses more lawn signs than anyone I've ever seen, has a small fleet of nice new professionally lettered trucks and advertises everywhere. I don't know what his rates are, just that they are too high for what he delivers (IMO) based on some of the work I've repaired and stories from common clients. I've rarely heard anyone say a good word about him, but he keeps on keeping on. I doubt he worries about ethics like you do.

And I doubt you work like he does.

Good Luck
Dave


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## 3Kings Plumbing (Jan 2, 2008)

We are a Christian company 3 Kings (WE the Three Kings) I was picking up my 5 year old from Sunday school and he had a piece of paper saying "We the Three Kings" Me and my wife spent 2 weeks thinking of a name. I prayed to God to help me choose the right name. We had 20-30 names we thought of had it narrowed down to 3 names. That Sunday before Christmas our name found us and it wasn't even one of the 3 remaining names we liked. I'm not saying I'm 100% holy! I still have my issues. But, I treat my customers as I would like to be treated if I was the customer. I don't rape there pocket books But I don't give away my services either. I'm new to the game and still learnig new things on ownership side of business. I stuggle on if I should give free estimates or charge something for them and how much should I charge? Should I charge like $50 to show up and look at the problem. I'm a new company struggling to stay a live here.

I know of an company here that charges $700.00 to set an 1/3 hp sump pump. I feel that's a little high.

I feel like maybe $300-400 is better price.

This is a very good topic I'm sorry for HI-Jacking it for a second there.


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## Putty Truck (Oct 6, 2007)

Grumpyplumber said:


> ...*.Now is** NOT a good time to expand, I know...but it is a good time to look into all those things with the extra time I assume I'll have on my hands in coming months.*


Maybe not a good time to expand, but use this time to develop a aggressive ad campaign. Most companies will cut their ads first (or second) during a downturn, but what if you increased while they decreased? What if you broke even doing it, but ran them out of business? 

I guarantee that this is the time that will shake out the plumbers from the businessmen and guess who will survive.

As for a 250.00 thermostat---I have a flat rate book, see? Everyone gets screwed equally and if they can't afford the thrill, they can call someone else. That seems ethical to me.


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## Grumpyplumber (May 6, 2007)

3Kings Plumbing said:


> I know of an company here that charges $700.00 to set an 1/3 hp sump pump. I feel that's a little high.
> 
> I feel like maybe $300-400 is better price.
> 
> This is a very good topic I'm sorry for HI-Jacking it for a second there.


*I don't see any hijacking, right on topic.*
*I'm loo**king for diverse perspectives.*

*For example:*


Putty Truck said:


> Maybe not a good time to expand, but use this time to develop a aggressive ad campaign. Most companies will cut their ads first (or second) during a downturn, but what if you increased while they decreased? What if you broke even doing it, but ran them out of business?


*The last thing in the world I'd want to do is crush the competition, thats a silly way to think...I'd rather be on the same page with the locals and keep the punches above the belt, maybe even send work their way, maybe get some my way. (yeah, sure...it could happen)*
*I do that with an ex employer on occasion, jobs too big go his way, jobs too small he'll send my way.*


Putty Truck said:


> I guarantee that this is the time that will shake out the plumbers from the businessmen and guess who will survive.
> 
> As for a 250.00 thermostat---I have a flat rate book, see? Everyone gets screwed equally and if they can't afford the thrill, they can call someone else. That seems ethical to me.


*Today & tomorrow I'm slow, but I'm booked Weds through Sat and most of next week (screwed if emergency calls come in), 75% of my work this week are repeat customers.*
*Admittedly thats higher than normal weeks.*
*I don't know if thats just the norm, regardless of price or quality, or if these people have come to trust my work & prices as reasonable.*
*I do know that I am frequently asked to go down on price with new customers and I suggest they shop around, some do & I never hear from them again, some have me work once, I never hear from them again.*
*Others yet call me back anytime they need a plumber.*

*I started this thread for that reason, to gain insights from different schools of thought...Three Kings and Putty have almost opposite views...excellent to get perspectives from so many angles.*

*I said earlier, I have a handful of regulars, at this point with the market like it is I don't know if I played my cards right and am better off **for the next 6 months during the slowdown, or if I get these customers repeat biz regardless what price I charge.*

*Again, I'm not cheap, but I'm defintiely not the "brand" type like Mike Finley states above. (One man show here)*

*I'm of the same thinking as Cplumb, my rates are going up.*
*As I sorted through sales & reciepts for last year and added the overall profit, I could see that a simple increase of 10% overall would set me up nice for a reserve to expand within 6 months to a year.*
*I highly doubt anyone would shop around any more than they already do, nor would I lose repeat customers at a rate increase of that little.*
*The only way I could even take a step in the "branding" direction is to start building the capital to fund it.*
*I won't risk doing it on credit alone, and current profits are banked for overhead, maintanence, personal savings & **e**mergencies.*
*In the end, I guess it's a roll of the dice in many ways...nothing ventured, nothing gained.*

*Putty, you're **100% correct, times are going to seperate the good business men from the bad in the near future.*
*Panicking and dropping prices, or failing to agressively pursue options for fear of loss is not good business.*
*I can't charge **a 68 year old widow on a fixed income **$230 for an hour of my time and walk away feeling good about myself.*
*I can charge a 40 year old **broker in a $2 mil home **that rate and suggest he shop around if he's not happy, IF** I know it's necessary to run my business and it's what I usually charge.*

*Loose translation to me...knowing when you're being ethical, or just too afraid to stand by your work & price** wi**th confidence.*


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## Grumpyplumber (May 6, 2007)

KillerToiletSpi said:


> I will not hesitate to say we are the most expensive contractor in town, and we have a handful of architects and designers that will specify we are the only acceptable plumbing sub for their jobs, it is not negotiable. There are four large high rise buildings that will only allow our company to work in the building.


*LOL ..I can't imagine you have any major competition though, yours seems more like a niche, residential union highrise plumbing.*
*My states code changes for reidential highrises over ten stories, I imagine yours is similar...no PVC, no PEX, no CPVC.*
*Here usually commercial outfits or specialty shops take on those types of work...they usually deal with the same engineers, architects and GC's over and over.*
*There are buildings in the city that are "union" and "non union"...meaning a non union shop cannot enter that building other than to stop by and say hi to a friend that lives there.*
*For union "owned" buildings, the competition isn't exactly stiff, it's a given that the price is going to be substantially higher when you face the potential liability of 8 stories of finished living spaces below that could be damaged in a leak or defective fixture.*
*In having seen you post, there is absolutely no question you work with that frame of mind, quality & detail take TOP priority, it has to.*
*But the majority of us here have a different market altogether, we are often wedged into bidding wars & unrealistic expectations, with advertizing budgets hanging in the balance.*


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## DavidC (Feb 16, 2008)

Grumpyplumber said:


> *.*
> 
> *The only way I could even take a step in the "branding" direction is to start building the capital to fund it.*


We are all establishing our "brand" every time we interact in any way with all customers, prospects and suppliers. Branding is unavoidable. 

You've mentioned a handful of repeat customers. These are folks that have sampled your brand and like it. I wouldn't hesitate to let these people know that if they know of anyone else that could use your services you'd appreciate the referral. And you don't have to give them any incentive because most people like to help out.

The ones that hire you once and don't call back either don't care for your brand or have more recently found one they like better. Can you believe that there are some people out there that don't like lasagna? I was shocked, but there you go.

But the ones that ask about your rate and disappear with out giving your brand a chance.... They just simply aren't your type of customer. Shrug shrug. What would you do if you had all of the customers anyway? 

Treat the ones you have to the best of your ability and they will refer you to friends and family to be treated likewise. Market to the second group, maybe they will come around eventually. Don't worry about the third group, AKA tire kickers.

We have a favorite plumber that refers us to his clients for baths and kitchens. I have never heard anyone talk about the technical aspect of his work, which he excels at IMO, but everyone talks about what a nice guy he is. We try to refer work his way but he seldom accepts it, preferring to tell me what to do to fix it because he is too busy to take on more work. He will show up if I ask twice.

Who says nice guys finish last anyway?

Good Luck
Dave


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## KillerToiletSpider (May 27, 2007)

Grumpyplumber said:


> *LOL ..I can't imagine you have any major competition though, yours seems more like a niche, residential union highrise plumbing.*
> *My states code changes for reidential highrises over ten stories, I imagine yours is similar...no PVC, no PEX, no CPVC.*
> *Here usually commercial outfits or specialty shops take on those types of work...they usually deal with the same engineers, architects and GC's over and over.*
> *There are buildings in the city that are "union" and "non union"...meaning a non union shop cannot enter that building other than to stop by and say hi to a friend that lives there.*
> ...


We have competition, not nearly as much as you guys that are doing service work, but it does exist, we never vary from our price, and we have finished more than one job started by someone else on our terms.

Shouldn't quality and detail be a priority for everyone? The thing that separates a pro from an amateur is being able to do it right every time. I take pride in my work, I want it to look as good as it works, I instill this in my apprentices.


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## mahlere (Aug 6, 2006)

3Kings Plumbing said:


> I know of an company here that charges $700.00 to set an 1/3 hp sump pump. I *feel* that's a little high.
> 
> I *feel *like maybe $300-400 is better price.


you're a business man, shouldn't you *know* if it's too high or a better price?


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## 3Kings Plumbing (Jan 2, 2008)

Mahlere, 

I've been an new construction installer for 11 years. I never had to run service calls until now. Some of you guys before you started your company probably did service work, So they probably got an idea what to charge from their employer. Me on the other hand got an idea how to charge for plumbing a custom home. I can get an pump for $100-150 takes me close to 2-3 hrs. (drive there switch out pump and drive back.) $80 hr since I'm not flat rate company (yet! still thinking about it.) I'm not getting rich as H E Double hockey sticks (HELL) here. I feel I'm making an honest living though.

I just think $700.00 to install an sump pump is unreal. Yeah good money!!! But you think they will tell Mrs Jones down the road at there Bridge game. (I know a good plumbing Company for your problems. I just had an sump pump installed for $700.00 and their plumbers smell good though.) or do you think they would more willing to offer Mrs Jones infomation if you had an more reasonable price? like $300.00-$400.00 for the same pump and service.


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## Putty Truck (Oct 6, 2007)

3Kings Plumbing said:


> Mahlere,
> 
> I've been an new construction installer for 11 years. I never had to run service calls until now. Some of you guys before you started your company probably did service work, So they probably got an idea what to charge from their employer. Me on the other hand got an idea how to charge for plumbing a custom home. I can get an pump for $100-150 takes me close to 2-3 hrs. (drive there switch out pump and drive back.) $80 hr since I'm not flat rate company (yet! still thinking about it.) I'm not getting rich as H E Double hockey sticks (HELL) here. I feel I'm making an honest living though.
> 
> I just think $700.00 to install an sump pump is unreal. Yeah good money!!! But you think they will tell Mrs Jones down the road at there Bridge game. (I know a good plumbing Company for your problems. I just had an sump pump installed for $700.00 and their plumbers smell good though.) or do you think they would more willing to offer Mrs Jones infomation if you had an more reasonable price? like $300.00-$400.00 for the same pump and service.


Man, I've seen this a dozen times in a dozen downturns. New construction gets slow, so the plumbers "branch out" into service.

Soon, the help wanted ads will state "Repair Plumbers Needed, New need not apply".

My head hurts.


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## smellslike$tome (Jan 22, 2006)

3Kings Plumbing said:


> Mahlere,
> 
> I've been an new construction installer for 11 years. I never had to run service calls until now. Some of you guys before you started your company probably did service work, So they probably got an idea what to charge from their employer. Me on the other hand got an idea how to charge for plumbing a custom home. I can get an pump for $100-150 takes me close to 2-3 hrs. (drive there switch out pump and drive back.) $80 hr since I'm not flat rate company (yet! still thinking about it.) I'm not getting rich as H E Double hockey sticks (HELL) here. I feel I'm making an honest living though.
> 
> I just think $700.00 to install an sump pump is unreal. Yeah good money!!! But you think they will tell Mrs Jones down the road at there Bridge game. (I know a good plumbing Company for your problems. I just had an sump pump installed for $700.00 and their plumbers smell good though.) or do you think they would more willing to offer Mrs Jones infomation if you had an more reasonable price? like $300.00-$400.00 for the same pump and service.


I understand your concern. I am a christian too. I don't want to go to bed wondering if I took advantage of someone. Think about this though, Jesus was a carpenter before his ministry began. He would have started very young and after Joseph leaves the scene he would have plied his trade to provide for his mother, brothers, and sisters. Do you think he would have charged an unreasonably low amount for any given project simply because someone complained that it was too much or because the carpenter around the way was doing it for less. He wasn't worried about it. Did he help the little old widows? I'm sure He did. Did every body else pay full rate? I'm sure they did. What does that mean today? It is a basic law of economics, a product or service *is worth exactly what someone is willing to pay for it*, no more or less. The same law governed economics when Jesus walked the Earth. The market determines what someone will pay for your services and you determine whether or not that amount is satisfactory or not. It is your job to provide for the needs of the family that God has given you. I do not believe that you should do any less than your best at that task. That means that you should *always* probe the upper reaches of what the market will allow. When you get out of line the market will let you know. You should be fair in all your dealings. This means not making it up as you go, treat everyone the same. If it costs $500 for the woman who drives an Accord then it also costs $500 for the guy driving the Mercedes and vice versa and when you encounter the little old widow woman you have perfect freedom to do whatever your heart leads you to do, but she is the exception not the rule. Ok, sermons over. You do not have to nor should you feel guilty about earning a handsome living from the skills and talents God has developed in you. We do not worship money but we ought not be afraid of it either.


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## Grumpyplumber (May 6, 2007)

KillerToiletSpi said:


> Shouldn't quality and detail be a priority for everyone? The thing that separates a pro from an amateur is being able to do it right every time. I take pride in my work, I want it to look as good as it works, I instill this in my apprentices.


*Yes it should be a priority, there's a little bit more of both quality and detail in a dorne Bracht mutiple shower unit, than a Moen single handle.*

*If I were testing drainage on a single family underground, I do what code calls for...if I were testing the DWV on the tenth floor I have no question whatsoever I'd be alot more scrutinizing & attentive to that guage.*

*I got away from new construction & most remodels I get calls for.*
*When your bidding against every Tom Dick & Harry thats willing to use PEX from a hardware store to get the job, things get a little scary.*

*I'd had the distinct displeasure of going from a VERY detail oriented commercial shop that was extremely focussed on quality, to working for a shop owned by a 26 year old kid that got the biz from his dad and underbid almost every job for lack of experience & fear of not making payroll, then rushed us through the work with utterly no concern for quality...things like shortsweep 90's on horizontal changes, no C/O's, telling us not to use primer to save money, skimming on hangers...the list goes on.*
*I left that shop in less than a month.*
*There are hacks out there, and there are folks willing to pay them lower prices to make more money as long as their liability is up to date.*


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