President, The New Flat Rate
Uber is brilliant. I’ve listened to every podcast I can find by the founders and I’ve also done the same with Lyft.
Watching the two companies go neck and neck, watching many of my friends start picking up late night driving shifts after their day jobs…the business model is brilliant. They’re solving a problem by providing a solution to the need of transportation in an affordable way, keeping the overhead low <drivers only work during ‘billable hours’>, and they’re international! But, what do, and don’t they have? They have brand loyalty by the end user, but they do not have driver loyalty. Every time you take an Uber or Lyft, you use a different driver, based on your convenience.
How does this model relate to our industry? It totally relates, and it’s the direction the Amazon’s and big business are headed. They’re headed in the direction of click to order your service repair and a technician will show up, regardless of which ‘company’ he/she works for. Until all those tech’s work for the big internet giant or whichever other players take the field.
We’ve already seen the beginnings of this happen, so sure, let’s say Amazon starts controlling the service calls and uses the Uber pricing model of raising and lowering prices on demand, that would work for them…but they are not you.
The contractor today is working hard to build their company brand, not a national or international brand but a good ole solid trustworthy local town brand. So why should they raise and lower their prices providing inconsistency for their customers? When you walk into Best Buy on a holiday weekend to get a new TV, did the price spike up because of high traffic? No! When you walk into Home Depot to pick out a new ladder are you nervous the prices might be high because it’s during peak hours? No! If you’re building your company and YOUR loyal customer base, then why raise and lower your prices based on demand? Instead, this is where true dynamic pricing is needed, and it comes in the form of a menu. The power of the menu comes to play in a real way.
If every time you do a diagnosis, you present the customer with a menu of choices, they can pick their level of service. If it’s peak season and after hours but your customer chooses the bottom option, a quick fix, then terrific! You perform the repair in the shortest amount of time and you’re off to the next call after collecting the money for the repair which ensured the entire job was billable time, like your accountant does. Boy, we all know accountants don’t do anything for free, so, why should you?
However, if it’s peak season and after hours on the weekend and your customer chooses a top option, your Platinum repair…well then, they just bought your day. No pressure, no price objections, no buyer’s remorse or sales resistance. And actually, if you look closely, Uber and Lyft do that too…they have a menu of car types, you can choose economy to premium so even if their prices are changing, they still give power to the consumer to choose based on their budget.