Homeowner Survey Offers Valuable Insight for Contractors
ACHR News recently conducted a homeowner’s study to help HVAC contractors better understand what homeowners are looking for from HVAC pros and other home service contractors in general.
The results were shared today in an ACHR online webinar with five contractor service professionals including representatives from ServiceTitan, Sera Systems, Climate Control Group, and Answerforce.
What Percentage of Contractors Charge Visit Fees?
According to the ACHR survey, approximately 70% of contractors do not charge a visit fee, while the other 30% do charge visit fees.
Homeowner Willingness to Pay a Visit Fee to a Contractor
The ACHR News Homeowner Survey then asked homeowners about their willingness to pay a visit fee to a contractor.
The survey found that 60% of homeowners were opposed to the idea with 38% saying they Probably Would Not and another 22% saying that Definitely Would Not.
The other 40% of homeowners surveyed in the ACHR study expressed either indifference or willingness to pay a visit fee to a contractor with 28% Undecided and the other 12% saying they Probably Would or Definitely Would.
Millennials More Willing To Pay Contractors A Visit Fee
While homeowners in general were reluctant to pay a visit fee, the survey results dug deeper by age groups which revealed that younger generations and especially Millennial homeowners are more willing to pay contractors a visit fee.
"As home ownership continues to increase among Millennials, I think we are going to see more of that willingness to pay a fee."
“As home ownership continues to increase among Millennials, I think we are going to see more of that willingness to pay a fee. And as more Millennial contractors enter the workforce, we will see a shit as well with more of a tendency to charge a visit fee,” said Mitch Henderson, Co-Founder of Clear Seas Research.
How To Bring Up The Visit Fee Without Getting Yelled At
The question put to the panelists was then, If you are in the practice of charging a visit fee, how do you bring up the visit fee with a homeowner without getting yelled at?
Angie Snow, the Principal Industry Advisor from ServiceTitan suggests that it’s all in the wording. She recommends terminology like a “dispatch fee” or a “diagnostic fee” rather than a “visit fee.”
She then cautioned that there are times when a homeowner will say, “I’ve already diagnosed the problem, so I’m not paying you a diagnostic fee.” In that case, using a term like “service fee” is more all encompassing, but you need to back that up by delivering great service.
Elements of Great Service To Justify A Contractor Service Fee
Snow then listed some elements of great service to justify a “service fee” including sending text updates to the customer prior to the technician’s arrival, having the technician thoroughly explain the diagnosis and the solution to the homeowner before beginning the jobs, and explaining in detail pricing and options for the homeowner.
“That’s how you educate your team to communicate that to your customers, and then you, as the business owner, need to live that through as well. At our company we have the Red Handkerchief promise which promises that we are going to do the job right the first time. And if we don’t, we come back and we make it right,” said Snow.
“I think when contractors can package up their service with a promise or a guarantee, people are willing to pay for it,” she added.
Advantages of Contractors Not Charging A Visit Fee
One of the panelists then offered a counter argument for why contractors should not charge visit fees.
“We don’t believe in service fees, because 60% of customers don’t want to pay them,” says Billy Stevens, the Founder of Sera Systems.
"65% of the people would rather book online now, and they only need one or two touches to book that call. It’s about time more than it is about money now. That's the world we live in today."
Stevens says that his company uses software to test everything that his company does. And what they found was that “what HVAC customers really want is an experience where the job can be completed in two or three touches, because 65% of the people would rather book online now, and they only need one or two touches to book that call. It’s about time more than it is about money now. That’s the world we live in in now,” said Stevens
Advantages of Contractors Putting Prices Online
The panel discussion then shifted to the topic of contractor willingness to put prices online. The ACHR News survey found that 80% of the contractors surveyed do not have any pricing whatsoever on their websites.
Once again, the panel cautions that contractors need to be cognizant of the changing preferences or younger homeowners. Just as GenX and Millennial homeowners are more willing to pay for a visit fee, they are almost unanimously more likely to call a contractor with some basic pricing listed on their website.
The Push For Greater Transparency in Online Pricing
“I think that follows the trend of what we are seeing in general…more transparency online. People are going to go and search and search and search to find what they want to find. And if they don’t find it, they are going to go another route,” said Henderson.
“And I think we can all agree that Millennials (the segment of the population between 28 and 43 years of age) are the ones buying houses,” added Kyle Gargaro, Editorial Director of ACHR News.
Different Approaches for Contractors Pricing Online
The conversation then shifted to the different approaches that contractors can take when it comes to pricing online. Everyone has an hourly service fee and consumers are going to want to compare those fees and price shop, says Wallace Kitredge of Climate Control Group.
But let’s say you are scheduled to install a new permanent system that is going to require a considerable amount of time and effort, the homeowner may start to get concerned about how quickly that hourly service fee is going to add up.
“When it comes to transparency, give the homeowner an idea of those hourly rates, what those amounts could be, but on that initial quick conversation, you are going to do your potential customer and yourself a disservice if you just start spitballing prices or if you just throw up prices online.
“More than pricing, ultimately what is going to most important is that level of respect and trust that your potential customer has with you with whatever method you use to bring them in, whether it’s that low hourly fee or a free first service call, or free inspection or whatever that might be. Really it’s about building that level of trust, and not about putting all of your prices online,” said Kittredge.
"Really it's about building that level of trust, and not about putting all of your prices online."
Potential Liability for Contractors Who Put Pricing Online
In closing out the topic of online pricing, ServiceTitan’s Snow says that contractors want to be as transparent as possible, but cautions because you’ve got your competitors checking out your prices as well.
As far as online pricing goes, she encourages contractors to be upfront and transparent about membership pricing and definitely put that pricing on your website.
Beyond that, Snow says there is just too much potential liability of a homeowner coming back and saying to a contractor and saying, You had THIS price on your website.
“We all know that pricing changes, our suppliers raise their prices, and equipment shortages and supply chain issues cause inflation, among other factors,” she concluded.
Contact CII Today
If you are the owner of an established home service business and would like to learn more about the current market value of your company and steps you can take today to maximize that value, contact a CII business advisor today.