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Exposing the Myth of Average Ticket

By Todd Liles September 6, 2014 Exposing the Myth of Average Ticket
The Myth of the Average Ticket

“What is your average ticket?”  Get a group of techs, plumbers, salespeople, or business owners in a room and the question is going to come up.  Everyone wants to talk about the average ticket of their plumbers and HVAC techs.   

Why?  Because you want to know how your techs compare to other techs.  It is a simple way to check your stats.  To see how your service company is “adding-up.”  However, most comparisons are not accurate, because most companies use an artificially inflated number for their average ticket.

The Artificially Inflated Average Ticket  

This artificial inflation is done by only counting closed calls into the average.  The calls that were not closed get taken out before the average is calculated.  Diagnostic Only calls and Zero Ticket calls never go into the calculation of an average ticket for most contractors.  

The Artificially Inflated Average Ticket Formula =

Total Money Collected / Total Calls Closed

This approach may look better on paper, and it may even make you feel better, but it is not a “true average ticket.”  

So, what is the Accurate Way to Calculate an Average Ticket?

An accurate average ticket for your service tech will be an average of the total money collected, divided by the total number of opportunity calls.

Now, you may ask, “What is included in an opportunity call?

An Opportunity Call includes the following types of calls:

  • Demand Calls
  • Scheduled Maintenance Calls
  • Tune-up Specials
  • Sales Calls

That means that even your “Zero” tickets and “Diagnostic Only” tickets go into the average when they were opportunities.

What is not an Opportunity Call?

  • Warranty Calls
  • Callbacks

Please note, I fully realize that many techs do close sales on warranty calls, as well as callbacks.  However, warranty calls are excluded.  Of course they should be accounted for.  Be sure that you are tracking your warranty calls and call backs.

Now, let’s look at the True Average Ticket Formula.

The Average Ticket Formula =

Total Money Collected / Total Opportunity Calls

Why Calculate the Average Ticket Accurately?

The primary reason is to deduce what is the True Return on Investment on Each Opportunity, or Your Dollars Per Lead.

Take a look at the picture of Steve Egner holding up the Accurate Average Tickets of his team for the month of August.  Steve’s averages are calculated accurately.  That means they follow the rules described above.

Now, just to create clarity, I’m going to turn this into a table, and add the artificial average ticket into the picture.

Can you separate the averages by the different call types?

Sure.  That is a great idea, and it is valid.  Tracking call averages by their type will point to the areas that need to be improved.

Tracking your averages by type may also create a pleasant surprise for you as well. 

As a matter of fact, here is another graph comparing True Average Ticket versus the Service Agreement Averages from Steve’s Plumbing.

I show you this, because many would argue that Service Agreements would negatively affect the results of the average ticket.  Well, that is true for 1 of Steve’s Plumbers.  For the other 3 plumbers, the service agreement calls increases their true average ticket.

Question:  How Do You Track Your Average Ticket?

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