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What Most Techs Don’t Realize About Price, Profit, and Staying in Business

⏱️ 45:58 🎤 Chris Elmore, Harold James Walker Jr.
AUDIO EPISODE
What Most Techs Don’t Realize About Price, Profit, and Staying in Business
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Chapters

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  • 0:00
    Introduction & Iconic TV Shows
    Chris Elmore introduces the episode and engages in a lighthearted discussion with Jdub about iconic TV show theme songs from their youth.
  • 4:17
    True Cost of a Service Call
    The hosts transition to the main topic: the true cost of a service call, addressing common technician questions about pricing.
  • 11:02
    Fixed vs. Variable Costs
    Chris and Jdub explain the difference between fixed costs (overhead) and variable costs (expenses directly tied to doing work) that contribute to service pricing.
  • 31:44
    Profitability & Reinvestment
    They discuss typical profitability targets for businesses, emphasizing that profits are often reinvested in the company and used to pay off debt, not solely for owner's luxuries.
  • 37:00
    Marketing & Advertising Costs
    The discussion highlights the significant and rising costs of marketing and advertising to acquire new customers, which factor heavily into the price of a service call.
  • 50:45
    Customer Lifetime Value
    The hosts explain the importance of customer longevity and membership programs to offset initial acquisition costs and ensure long-term profitability.
  • 1:03:33
    Why Prices Vary
    They address why larger, reputable companies often charge more than smaller operations, citing differences in operational costs, quality standards, and ability to stand behind work.
  • 1:16:51
    Pricing: Necessity, Not Greed
    The episode concludes by reiterating that pricing decisions in reputable companies are driven by necessity and comprehensive math, not greed, and encourages technicians to seek clarity from their owners.

Speakers

C
Chris Elmore
Host — host and controller
H
Harold James Walker Jr.
Host — Jdub from the sister podcast, Jdub Ruins podcast

Key Takeaways

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Understand that service prices are not just about parts and labor; they encompass significant fixed costs (overhead) like rent, insurance, phones, and marketing, and variable costs like fuel, tools, and warranties.

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Recognize that customer acquisition is expensive; the initial cost to get a new customer can be hundreds of dollars, making customer retention and membership sales crucial for profitability.

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Appreciate that company profits are essential for reinvestment in the business (e.g., new vans, better equipment, training) and paying off debt, contributing to the overall quality and stability of your workplace.

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Explain to customers that reputable companies often charge more due to higher standards of quality, adherence to codes, insurance, employee benefits, and the ability to stand behind their work and provide prompt support.

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If you question pricing, engage with your owner or manager; most want you to understand the financial reasoning behind their pricing structure to foster buy-in and clarity.

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