• Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • CONTRACTORS
  • ENGINEERS
  • RADIANT & HYDRONICS
  • INSIGHTS
  • MEDIA
  • RESOURCES
  • EMAGAZINE
  • SIGN UP!
cart
facebook instagram twitter linkedin youtube
  • CONTRACTORS
  • BATH & KITCHEN PRO
  • BUSINESS MANAGEMENT
  • HIGH EFFICIENCY HOMES
  • TECHNOLOGY
  • WATER TREATMENT
  • PMC COLUMNS
  • PMC COLUMNS
  • Dave Yates: Contractor’s Corner
  • John Siegenthaler: Hydronics Workshop
  • Kenny Chapman: The Blue Collar Coach
  • Matt Michel: Service Plumbing Pros
  • Scott Secor: Heating Perceptions
  • ENGINEERS
  • CONTINUING EDUCATION
  • DECARBONIZATION | ELECTRIFICATION
  • FIRE PROTECTION
  • GEOTHERMAL | SOLAR THERMAL
  • PIPING | PLUMBING | PVF
  • PME COLUMNS
  • PME COLUMNS
  • Christoph Lohr: Strategic Plumbing Insights
  • David Dexter: Plumbing Talking Points
  • James Dipping: Engineer Viewpoints
  • John Seigenthaler: Renewable Heating Design
  • Lowell Manalo: Plumbing Essentials
  • Misty Guard: Guard on Compliance
  • RADIANT & HYDRONICS
  • RADIANT COMFORT REPORT
  • THE GLITCH & THE FIX
  • INSIGHTS
  • CODES
  • GREEN PLUMBING & MECHANICAL
  • PROJECT PROFILES
  • COLUMNS
  • SPONSOR INSIGHTS
  • COLUMNS
  • Codes Corner
  • Natalie Forster: Editorial Opinion
  • Guest Editorial
  • MEDIA
  • PODCASTS
  • VIDEOS
  • WEBINARS
  • RESOURCES
  • INDUSTRY CALENDAR
  • DIRECTORIES
  • EBOOKS
  • PM BOOKSTORE
  • CE CENTER
  • MARKET RESEARCH
  • CLASSIFIEDS
  • EMAGAZINE
  • EMAGAZINE
  • ARCHIVE ISSUES
  • CONTACT
  • ADVERTISE
  • PME EMAGAZINE ARCHIVES
search
cart
facebook instagram twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • CONTRACTORS
    • BATH & KITCHEN PRO
    • BUSINESS MANAGEMENT
    • HIGH EFFICIENCY HOMES
    • TECHNOLOGY
    • WATER TREATMENT
    • PMC COLUMNS
      • Dave Yates: Contractor’s Corner
      • John Siegenthaler: Hydronics Workshop
      • Kenny Chapman: The Blue Collar Coach
      • Matt Michel: Service Plumbing Pros
      • Scott Secor: Heating Perceptions
  • ENGINEERS
    • CONTINUING EDUCATION
    • DECARBONIZATION | ELECTRIFICATION
    • FIRE PROTECTION
    • GEOTHERMAL | SOLAR THERMAL
    • PIPING | PLUMBING | PVF
    • PME COLUMNS
      • Christoph Lohr: Strategic Plumbing Insights
      • David Dexter: Plumbing Talking Points
      • James Dipping: Engineer Viewpoints
      • John Seigenthaler: Renewable Heating Design
      • Lowell Manalo: Plumbing Essentials
      • Misty Guard: Guard on Compliance
  • RADIANT & HYDRONICS
    • RADIANT COMFORT REPORT
    • THE GLITCH & THE FIX
  • INSIGHTS
    • CODES
    • GREEN PLUMBING & MECHANICAL
    • PROJECT PROFILES
    • COLUMNS
      • Codes Corner
      • Natalie Forster: Editorial Opinion
      • Guest Editorial
    • SPONSOR INSIGHTS
  • MEDIA
    • PODCASTS
    • VIDEOS
    • WEBINARS
  • RESOURCES
    • INDUSTRY CALENDAR
    • DIRECTORIES
    • EBOOKS
    • PM BOOKSTORE
    • CE CENTER
    • MARKET RESEARCH
    • CLASSIFIEDS
  • EMAGAZINE
    • EMAGAZINE
    • ARCHIVE ISSUES
    • CONTACT
    • ADVERTISE
    • PME EMAGAZINE ARCHIVES
  • SIGN UP!
ColumnsBusiness ManagementMatt Michel: Service Plumbing Pros

Matt Michel: 9 professional plumbing pricing practices

By Matt Michel
9 professional plumbing pricing practices

The No. 1 problem affecting the plumbing trade is inadequate pricing.

June 26, 2018

The single biggest problem plumbing contractors face is also the easiest to fix. It is poor pricing practices.

Here are nine professional plumbing pricing practices you can use to boost your business.

 

Use flat-rate pricing

It is difficult to find a large, professionally run plumbing business that does not deploy flat-rate pricing. There are many reasons to utilize flat-rate pricing, but the most important is nine out of 10 consumers prefer it.

Consumers hate the uncertainty of time and materials pricing where the final price is a surprise. This is why they try to get your plumbers to give them a ballpark price. Guess what? When you give a ballpark, you are all but flat rating, only it is a flat-rate swag.

In focus groups, consumers have described flat-rate pricing as fair pricing and a better value. The companies that offer flat-rate prices are seen as more honest and lower priced. Any negatives plumbers perceive come from within the trade, not the public.

In addition to more positive consumer perception, when a company switches to flat-rate pricing, complaints about how long a plumber was on the job are immediately eliminated. Because the price is presented before work begins, most price complaints disappear.

Since flat rate bundles material pricing and labor, neither gets questioned. Pricing is also simplified, since math mistakes are reduced and pricing games are unnecessary. You may still charge a fee to show up at the customer’s house, but it is no longer needed to subsidize your labor pricing.

 

Charge enough

The No. 1 problem affecting the plumbing trade is inadequate pricing. Too many plumbers fail to charge enough. If you do not charge enough, you are effectively subsidizing your customers. Do they need your subsidy?

Proper pricing is the basic platform that drives everything else in a retail plumbing company. When you price right, you can afford to pay well, offer good benefits, invest in new trucks, pay for training, invest in marketing, and reward the company investors for risking their capital in the business. If you do not know how to calculate your service pricing, the Service Roundtable has a free pricing calculator you can download from the “Free Stuff” tab on the website.

 

Charge maintenance agreement customers less

If you offer a maintenance program (and you should), your maintenance customers will be your most loyal and profitable customers. They are repeat customers, so it costs less to attract and serve them.

They deserve to pay less. However, you deserve your targeted net profit, so how do you charge your maintenance customers less while still hitting your numbers? Easy. Set the pricing for your maintenance customers at your targeting net profit and charge everyone else more, which becomes your “standard” price.

 

Charge a subscription

It seems every company is attempting to move to a subscription model today. This is because consumers would rather pay a low monthly fee that they can forget about than a larger annual number. In keeping with the national trend, contractors are beginning to switch to a subscription pricing model for maintenance agreements.

The subscription model presents all kinds of ways you can price innovatively to bind your customers to you. For example, credit six months to a year of the subscription payments to any repairs as long as the customer remains maintenance program member in good standing. This makes it harder to quit since the customer must walk away from credit toward repairs.

 

Rename repair parts

Everyone in the service industry has experienced a customer conducting an internet search for a repair part and going ballistic upon discovering the price. Make it harder by renaming parts. For example, an angle stop becomes and emergency shutoff valve. Just make sure you keep a good cross reference for your new plumbers and warehouse manager.

 

Do not charge overtime

If you correctly allocate all of your overhead against standard billable hours, there is none left to allocate against overhead for overtime work. This makes overtime work extremely profitable. In fact, it is likely you can charge your regular prices for overtime, pay your plumbers time and a half, and still make more money. This is because the overhead is usually more than the 50% markup for overtime pay. In addition, overtime work involves little, if any, unapplied time (basically, just the travel time).

 

Be strategic with response charges

If you are flat rate and have your overhead fully covered in your pricing, your response charge (i.e., trip charge, truck charge, travel charge, diagnostic fee, etc.) is unnecessary for profit, but might be beneficial from a sales and marketing perspective.

For example, if you have price shoppers in your area, you can have the response charge apply to the repair. If you want to encourage maintenance agreement subscriptions, you can waive the response charge for maintenance agreement customers. If you want to make lots of discount offers, mail out coupons approximately the same as the response charge.

 

Add surcharges

If your price books are not digital, you should print them every six months or sooner or you end up missing your targeted profit due to inflation. In the interim, consider adding surcharges from time to time to cover expenses like gasoline price spikes. Eliminate the surcharges the next time you print books.

 

Flex your prices

Ultimately, pricing should be flexed up and down. When a task is particularly distasteful, complex, or difficult for a DIY approach, charge a little more. Then, lower prices on tasks that are simple and easy. Market the reduced prices. This is retail pricing, where a few items are priced very competitive and marketed heavily, but others carry greater profits.

KEYWORDS: business coaching contractors marketing sales

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Matt michel

Matt Michel is the founder of Service Nation, and author of “Contractor Stories.” Looking to grow your plumbing business? Read PM magazine — subscribe for free — and join the Service Roundtable. Learn more about the Service Roundtable at www.ServiceRoundtable.com.

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Worker using the Milwaukee Tool SWITCH PACK drain cleaner

    Pipeline profits: Drain cleaning, pipe inspection create opportunities

    Drain cleaning and inspection services offer lucrative...
    Plumbing News
    By: Nicole Krawcke
  • Uponor employee, Arturo Moreno

    The reinvestment in American manufacturing and training

    Plumbing & Mechanical Chief Editor Nicole Krawcke and...
    Plumbing News
    By: Nicole Krawcke and Natalie Forster
  • March 2024 Women in Plumbing hero image of woman engineer overlayed by circle of hexagon shapes with numbers from 1 to 10

    Celebrating 10 Influential Women in the Plumbing Industry

    Celebrating Women's History Month and Women in...
    Plumbing News
    By: Nicole Krawcke
close

1 COMPLIMENTARY ARTICLE(S) LEFT

Loader

Already a Registered User? Sign in now.

Subscribe For Free!
  • eNewsletters
  • Online Registration
  • Subscription Customer Service
  • eMagazine
  • Manage My Preferences

NIBCO Press Solutions

NIBCO Press Solutions

Bell & Gossett Illustrates Path to Net-zero at AHR Expo

Bell & Gossett Illustrates Path to Net-zero at AHR Expo

AI can boost efficiency and profitability for plumbing, HVAC contractors

AI can boost efficiency and profitability for plumbing, HVAC contractors

IPEX celebrates grand opening of new Florida distribution center

IPEX celebrates grand opening of new Florida distribution center

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Plumbing & Mechanical audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Plumbing & Mechanical or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  • J.J. Keller CMV vehicles on road
    Sponsored byJ. J. Keller & Associates, Inc.

    The dash cam game-changer for small business safety

Popular Stories

The interior of a government building.

President Trump signs executive order promoting skilled trades and apprenticeships

Figure 1 is a sketch of the flow problems of the current plumbing system.

Hydronic heating glitch solved: Why adding a circulator won't fix primary loop flow issue

Underfloor heating installation with drain sewer hole in bathroom close up on water floor heating.

Using hydronics to leverage time-of-use electrical rates

PM BEMIS June 25 Free Webinar: Optimizing Plumbing Solutions for Single-Family, Multi-Family & Public Spaces

Events

November 13, 2024

Future Proofing MEP: Navigating the 2026 High Efficiency Water Heating Standards

Join our deep dive into DOE’s new standards so you can future-proof your MEP practice.

EARN: 0.1 ASPE CEU; 1 AIA LU/HSW; 0.1 IACET CEU*; 1 PDH

View All Submit An Event

Poll

Will business be up or down in 2025?

Do you anticipate business in 2025 to be up or down in comparison to 2024?
View Results Poll Archive

Products

The Water Came To A Stop

The Water Came To A Stop

See More Products

Download the FREE Water Conservation, Quality & Safety eBook: Plumbing Trends Increasing Safe Water Availability

Related Articles

  • Matt Michel

    Matt Michel: 9 lies small contractors tell themselves

    See More
  • Four stacks of silver coins next to a red and white toy house with a blurry background.

    The psychology of plumbing pricing

    See More
  • Matt Michel

    Matt Michel: 9 ways to help your plumbing company stand out

    See More
×

Keep your content unclogged with our newsletters!

Stay in the know on the latest plumbing & piping industry trends.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
    • Supply House Times
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing

search
cart
facebook instagram twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • CONTRACTORS
    • BATH & KITCHEN PRO
    • BUSINESS MANAGEMENT
    • HIGH EFFICIENCY HOMES
    • TECHNOLOGY
    • WATER TREATMENT
    • PMC COLUMNS
      • Dave Yates: Contractor’s Corner
      • John Siegenthaler: Hydronics Workshop
      • Kenny Chapman: The Blue Collar Coach
      • Matt Michel: Service Plumbing Pros
      • Scott Secor: Heating Perceptions
  • ENGINEERS
    • CONTINUING EDUCATION
    • DECARBONIZATION | ELECTRIFICATION
    • FIRE PROTECTION
    • GEOTHERMAL | SOLAR THERMAL
    • PIPING | PLUMBING | PVF
    • PME COLUMNS
      • Christoph Lohr: Strategic Plumbing Insights
      • David Dexter: Plumbing Talking Points
      • James Dipping: Engineer Viewpoints
      • John Seigenthaler: Renewable Heating Design
      • Lowell Manalo: Plumbing Essentials
      • Misty Guard: Guard on Compliance
  • RADIANT & HYDRONICS
    • RADIANT COMFORT REPORT
    • THE GLITCH & THE FIX
  • INSIGHTS
    • CODES
    • GREEN PLUMBING & MECHANICAL
    • PROJECT PROFILES
    • COLUMNS
      • Codes Corner
      • Natalie Forster: Editorial Opinion
      • Guest Editorial
    • SPONSOR INSIGHTS
  • MEDIA
    • PODCASTS
    • VIDEOS
    • WEBINARS
  • RESOURCES
    • INDUSTRY CALENDAR
    • DIRECTORIES
    • EBOOKS
    • PM BOOKSTORE
    • CE CENTER
    • MARKET RESEARCH
    • CLASSIFIEDS
  • EMAGAZINE
    • EMAGAZINE
    • ARCHIVE ISSUES
    • CONTACT
    • ADVERTISE
    • PME EMAGAZINE ARCHIVES
  • SIGN UP!