Growing Revenue by not charging a service fee

James Owen has some new ideas about winning at residential plumbing service. For one thing, he doesn’t charge any kind of service or dispatch fee. He is also willing to waive the diagnostic fees in many cases.

I’m not a plumber. And, I’m not from the trades. When I took this position, the previous year we had only around $350,000 in service plumbing revenue. Only two years later we are now on pace for between 2.5 and 3 million in residential plumbing service revenue.

I met James last year at a PRESS PLAY Training Event. James is the COO of Plumb Tite in Cincinnati. He has been in the trade for just over 2 years. So, he doesn’t filter his business practices through old school thought processes.

Not charging a diagnostic or service fee sounds risky. For a residential plumbing company, these fees can act as a filtering system for clients. RELATED:  How to Win with an Irate Women.

For James, not charging a service fee was what he would want as a client.

I believe our plumbers must earn the business of each client first, therefore creating trust. I think trust and sales work together. I don’t believe it is a coincidence that we grew so quickly after making the change.

Growing a service division by over 2 million in 2 years is impressive. So, when I had him in my car, I capture this quick interview and dug into how waiving service fees is working for his business.

I ask him for the following answers:

  1. Does this approach attract price shoppers?
  2. How do you address times when a diagnostic is required?
  3. When you charge a diagnostic fee, what are you charging?

Question: What do you think about Plumb Tite’s strategy of not charging a service fee?

Please comment and share on  and .

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