runaway fuel/inflation costs??

Posted by Steve on May 23, 2008, 10:02 am

How are you guys dealing with the effects of the costs of fuel and
inflation?? I have been getting a *LOT* of calls from tire kickers, and
folks wanting to get it done for free. I have a bunch of regular customers
that are doing without because they can't afford the needed repairs, and my
service agreement renewals are way down too. I have been talking about this
for the last couple of years.... and it seems that what I predicted is
coming to pass.

Are you using your service call fee as a loss leader to get your foot in the
door, then raise the labor rates in your flat rate book?? or... are you
charging a fuel surcharge?? or???
I can tell you that folks in this area can't afford to pay the $75 service
call that I charge, and assuming 30 minutes one way (with last years fuel
prices) it costs me $167 to put a truck on the road. Yes I am charging a
fuel surcharge for more than 15 miles one way.

I know that you guys in the big cities are getting a lot more $$$, but the
same still applies to you too. At this point, I am contemplating keeping my
service call fee the same for the time being, and adding to the fuel
surcharge, plus increasing the labor rate in my flat rate book(again). I
dunno, business is way down, and I am not seeing hardly any of the other
companys trucks on the road either. How are you guys handling this??

Posted by KJPRO on May 23, 2008, 12:47 pm

> How are you guys dealing with the effects of the costs of fuel and
> inflation?? I have been getting a *LOT* of calls from tire kickers, and
> folks wanting to get it done for free. I have a bunch of regular customers
> that are doing without because they can't afford the needed repairs, and
> my service agreement renewals are way down too. I have been talking about
> this for the last couple of years.... and it seems that what I predicted
> is coming to pass.
> Are you using your service call fee as a loss leader to get your foot in
> the door, then raise the labor rates in your flat rate book?? or... are
> you charging a fuel surcharge?? or???
> I can tell you that folks in this area can't afford to pay the $75 service
> call that I charge, and assuming 30 minutes one way (with last years fuel
> prices) it costs me $167 to put a truck on the road. Yes I am charging a
> fuel surcharge for more than 15 miles one way.
> I know that you guys in the big cities are getting a lot more $$$, but the
> same still applies to you too. At this point, I am contemplating keeping
> my service call fee the same for the time being, and adding to the fuel
> surcharge, plus increasing the labor rate in my flat rate book(again). I
> dunno, business is way down, and I am not seeing hardly any of the other
> companys trucks on the road either. How are you guys handling this??

The economy sucks...
What's the answer, dunno maybe open up a gas station or an oil refinery!

Posted by KJPRO on May 23, 2008, 5:57 pm

> Something has got to be done.

Yep

Posted by Don Ocean on May 23, 2008, 11:18 pm

KJPRO wrote:

>> How are you guys dealing with the effects of the costs of fuel and
>> inflation?? I have been getting a *LOT* of calls from tire kickers, and
>> folks wanting to get it done for free. I have a bunch of regular customers
>> that are doing without because they can't afford the needed repairs, and
>> my service agreement renewals are way down too. I have been talking about
>> this for the last couple of years.... and it seems that what I predicted
>> is coming to pass.
>> Are you using your service call fee as a loss leader to get your foot in
>> the door, then raise the labor rates in your flat rate book?? or... are
>> you charging a fuel surcharge?? or???
>> I can tell you that folks in this area can't afford to pay the $75 service
>> call that I charge, and assuming 30 minutes one way (with last years fuel
>> prices) it costs me $167 to put a truck on the road. Yes I am charging a
>> fuel surcharge for more than 15 miles one way.
>> I know that you guys in the big cities are getting a lot more $$$, but the
>> same still applies to you too. At this point, I am contemplating keeping
>> my service call fee the same for the time being, and adding to the fuel
>> surcharge, plus increasing the labor rate in my flat rate book(again). I
>> dunno, business is way down, and I am not seeing hardly any of the other
>> companys trucks on the road either. How are you guys handling this??

>
>
> The economy sucks...
> What's the answer, dunno maybe open up a gas station or an oil refinery!

Hire an Air conditioner assassin! ;-P

Posted by KJPRO on May 24, 2008, 12:16 am

> OTOH, I have been especially mindfull of other service trucks on the road,
> and have seen *very* few, and those I have seen are still running calls
> for $55 and $50/hr... I don't expect them to be in business much longer.

Don't count on them going under anytime soon...

They have low prices for a reason. They cut corners that cost their
customers in the long run! Their work not only looks/works like shit, but it
ends up costing the customer in operational costs. That's a cost that not
many clients can understand. It's an electrical bill and they don't see the
direct cost for running their A/C. Most people can't understand that their
equipment can be running (and working) yet it's not running to it's top
performance.

Hell, for that matter, not many technicians understand what it actually
takes to make the equipment efficient. All they care about is getting it
running and making it to the next call on their list. Large companies are
the ones making the money. They hire people to run their calls, if the
serviceman doesn't get many callbacks or complaints... all is well. Does the
said owner of that business care if the customers utility bills are high?
Nope.

My point is, till the end user understands some basic info and knows what a
quality job looks, runs and sounds like... all bets are off. The lowballers
are going to get their share of the work and we are the ones that get to
clean up the mess while having to justify our high prices. Yep, I said
justify... because, even though the client gets the shaft, they still THINK
you should be able to do the job correctly for the same cost as the hack.

Not only that, but their are companies here that cut one job and make it up
on the next. They like to play the buddy system and make themselves look
good while ripping off the "litlle ole lady" or the person that doesn't know
any better. They just heard from "this guy" to use this said company, not
knowing that "this guy" got a deal on his system or repair and the new guy
is going to be paying for half of it!

It's all "clear as mud" to client.

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