One of the biggest hurdles to clear for customers is price. These days anyone with a smartphone or internet access can find the price of the part you are installing. If you mark it up, the customer wants to know the reason for the big markup. If you do a flat rate, the customer wants a breakdown so they can see how much you’re charging for parts. This has led to the great race to the bottom of the barrel.

How many times have you heard, “I don’t understand why you are charging me $160 for a part that I just found online for $15?” We try to minimize the arguments by explaining the complexities and costs associated with our type of business — how expensive overhead and insurances are that we have to carry, tech wages, licensing, fuel, ongoing training, parts storage, van payments, etc.

We work in one of the most complex industries in the world. There is no cookie cutter business model for the plumbing, drain cleaning, heating, and air conditioning business. It is not something that is easily understood by someone who works in a typical office job or in a manufacturing plant. All of our assets are mobile. Technical training and products change by the minute. The typical person would be shocked to see how much it costs just to get a technician to their front door.

It is such a complex industry that both customers and company owners alike get a mental fog mid-explanation, cut the comprehension, and focus on what they can see and touch — the material. The customer can physically see the material and has a general understanding of what it does. Company owners have been beaten into submission with price so much so that they have the same mindset as the customer — everything must be priced low.

Cutting Costs

We convince ourselves that if we buy the cheapest parts and buy them in bulk, the savings will be passed on to the customer and we will get more jobs. We are so focused on the price of material that we overlook the most important factor of all: The quality and experience of our technicians.

Think of a surgeon. The most important factor in picking a surgeon would be the quality of work and reputation of the surgeon. Materials would be an afterthought. The worst surgeon and the best surgeon would both use roughly the same kind of materials and follow the same procedures. You would be paying for a surgeon’s experience, reputation and tried-and-true hand. Why do we not think of ourselves in the same regard?

Consider this scenario:

Mrs. Jones wants a new bathtub installed so she gets two quotes. One quote is from your company, which is a legitimate insured and licensed plumbing company that employs master plumbers. The second is from Ron’s Handyman Service, which has installed one tub since it’s been in business. Mrs. Jones has picked out a very expensive and high quality cast iron bathtub that costs $1,500. You give her a quote for $6,000 and Ron’s Handyman Service gives her a quote for $3,000.

Mrs. Jones reviews the two quotes and calls for an explanation of why you are charging her so much money. She just got a quote for half of yours, and she doesn’t understand why you are trying to take advantage of her. After all, the tub only costs $1,500. She looked it up online. How does a $1,500 tub turn into $6,000?

Instead of attempting to explain the cost of running a professional service business, try this approach:

“Mrs. Jones, the extra costs you are concerned about can be easily explained. They are for the experienced technicians we are lucky to have at our company. They can do this kind of work in their sleep. They are honest, fair, and hardworking individuals like yourself who have been training for years so that they can install your bathtub correctly and safely the first time.”

The customer can buy the best quality bathtub in the world, but the installation results go hand in hand with the skill and experience of the installer. You get what you pay for. If the tub is installed by Ron the handyman, the installation could prove disastrous. Because of his lack of knowledge and expertise, he may struggle in the face of adversity and take shortcuts.

What the customer is paying for is the experience and expertise that come with a licensed master plumber and his crew who do this type of work once or twice a week, every week for the last 25 years. Customers are so focused on price because they have become accustomed to believe that all labor is equal. Why would they pay $100 an hour to have someone move that tub from point A to point B, when they can pay someone to do the same thing for $20 an hour? This is a ridiculous notion that we in the industry have allowed to grow for years now. There is a huge difference between what we are providing versus what the handyman is providing, and it’s not the material. An experienced veteran plumber can make the $200 bathtub from the home center last for a century, just like the handyman can make the $1,600 bathtub leak in a single day. We cannot get wrapped up into arguments with customers over pricing.

In the words of my father, an old time pipefitter, “Not everyone can afford quality service. Don’t apologize for being the best at what you do.”

About the Author

Anthony Pacilla is a registered master plumber for McVehil Plumbing in Washington, Pennsylvania. He has 23 years' experience in the plumbing and HVAC trades, and has a bachelor’s in business and economics from Thiel College.