5 Tips to Create an HVAC Pricebook Your Techs Will Understand

Diana LamirandDecember 19th, 2019
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Homeowners today don’t fully comprehend how their home’s heating and cooling system works, and most don’t care to learn how an HVAC company sets its pricing, so they rely on your company’s HVAC technicians to be the experts and give them an honest estimate. 

An HVAC flat-rate pricebook filled with detailed heating and cooling product images, service descriptions, and good, better and best options can provide your techs with a tremendous resource, value to your customers and improve your company’s bottom line. Flat-rate pricing means the customer knows the cost upfront and pays a fixed flat rate for service, with time and materials already calculated in.

“Your HVAC pricebook is the foundation for everything you do in your company,” says Kathy Nielsen, a business development consultant and operations expert who’s worked in the skilled trades for 20 years, including leading a large HVAC company as general manager. “Your HVAC pricing guide drives your tech efficiency, profitability, reporting, truck replenishment and inventory.”

Today, as owner of Operations Excellence, Nielsen shares her passion for improving businesses by helping HVAC companies: 1) create customer service and office management superheroes; 2) establish standard operating procedures to increase efficiency; and 3) set up and optimize their ServiceTitan and Quickbooks accounts.

Whether your company uses ServiceTitan’s Pricebook Pro or another HVAC flat-rate pricing guide, Nielsen’s tips on how to build and maintain a profitable HVAC pricebook shows business owners:

  • Where to start if you’re in the early stages of developing an HVAC pricebook.

  • How to optimize your HVAC pricing guide to better align with your business goals.

  • How to leverage your HVAC pricebook to improve business reporting and inform your business strategy.

Make it Easy for Your HVAC Technicians to Use

Your HVAC pricebook template needs to work well for your HVAC technicians. Managers and owners sometimes set up pricebooks for office operations, without ever consulting with their techs or trying to understand how they use the pricebook in the field. Your HVAC pricebook needs to function really well for the technician’s brain, not your brain.

“If a technician is unfamiliar with a pricebook or they have too many choices for similar items, they start getting nervous in front of a customer because they kind of feel stupid, and we don’t want that to happen,” says Nielsen, who often trains techs on new software.

Most HVAC pricebooks function like a tree, with the trunk or base of the tree serving as the foundation for all of your HVAC service options. The bigger branches show the subcategories, such as an A/C or furnace tune-up, and the leaves on the tree detail the specific tasks involved, such as “replace a pressure switch” or “install a blower motor,” as well as how much time each task takes to perform — and the cost. 

As your technicians move into the leaves of the tree, your pricebook needs to clearly outline each specific task, the materials involved, the cost for service and materials, and the estimated time involved. For instance, ServiceTitan Pricebook Pro does all of that and comes pre-loaded with content so HVAC companies can focus on their most used and top revenue-generating services.

Include Coupons and Discounts in Pricebook

If your HVAC company offers coupons and discounts, make sure your HVAC pricebook template is set up correctly so techs in the field understand how to utilize those incentives when interacting with your customers.

For Nielsen, a coupon is different than a discount, so each should have its own company account for best reporting practices.

“When I manage a company, I want coupons to hit separate accounts than discounts. In my opinion, a coupon is more of a marketing tool and a discount is something we had to give away to make somebody happy or to win a sale,” she says. “I want to know financially how much I had to give away in revenue in a discount form vs. how many people are responding to coupons that we have out there on the internet, through direct mail, part of a welcome wagon, or wherever.”

It’s also important for technicians using your HVAC pricebook to properly track any coupons or discounts applied to a particular customer’s account as a way to build value for the service. If the technician simply changes the price of the task or service and fails to document the use of a coupon or discount, the customer may call your shop and demand the coupon or discount be applied, even though it was already built into the price they paid.

Some HVAC pricebooks, like ServiceTitan’s Pricebook Pro, also allow business owners to set up an alert to the service manager whenever their technicians use a certain coupon or discount. The automatic alert allows the service manager to know what’s happening in the moment and have a conversation with the tech to understand why they are offering the coupon or discount to a particular customer. Did the technician fail to make the customer happy or use an incentive to build value for the service? The service manager can react to each scenario in real time and control the giveaways.

Avoid These Common Pricebook Mistakes

One of the biggest mistakes companies often make when setting up their HVAC flat-rate pricebook? Not realizing how important it is to the overall operation of their business. 

“It drives everything in your company. It’s your complete foundation,” Nielsen emphasizes, explaining how problems occur in the set-up stage of the HVAC pricebook, because owners tend to focus on the future and not in the now.

Initially, Nielsen says some companies worry too much about linking all of their tasks with the materials used, but then find the tasks aren’t built very well because they’re too confusing or the template doesn’t include enough of them. Focus on building a strong foundation of well-defined tasks first, and then link to the materials (all of those pieces and parts your technicians use to stock their trucks).

“Instead of trying to eat the whole cake, do it a bite at a time. Choose your top 20 to 50 tasks and get those tasks really great,” she says. “When you’re adding materials, choose materials by cost. Start out with the high-dollar cost items first.” 

Keep in mind, your “equipment” (a furnace or A/C unit with a model number and serial number) should not be considered “materials” for your business’ reporting purposes. Documenting both correctly helps to keep your pricebook simplified.

Another very common mistake made in HVAC flat-rate pricing books is allowing techs to choose a “miscellaneous task” as the type of service provided to a customer. It’s typically a generic task or service with no real description or price. A tech may choose the miscellaneous option because they don’t want to look up a particular item or your HVAC pricebook includes too many choices and they don’t know which one to pick.

“When we use miscellaneous too often, it will not give us reportable data,” Nielsen says. “I can’t figure out if I need to stock more of a particular item or add it to their truck stock if it’s always listed as miscellaneous.”

A dishonest tech also might take advantage of the miscellaneous option in your HVAC pricebook. “Maybe he goes in and does a lot more services than he used specific tasks for, but when he puts it in as generic and changes the price, he might be pocketing money from the customer. It’s keeping honest techs honest,” Nielsen says. Specific tasks and prices also provide better transparency for the homeowner, who may ask for a detailed history of services for insurance purposes.

Explore Features Specific to ServiceTitan

Take the time to become familiar with your HVAC pricebook and take advantage of everything it can do. Some cool features specific to ServiceTitan include:

  • Payroll Reporting — While it doesn’t calculate payroll with tax tables, it allows you to run a report to show the company’s gross payout for a specific payroll period. 

  • Master Pay File for Technicians — Shows the services provided by each technician for a specific period of time and total sales, and easily calculates any bonuses or SPIFs owed.

  • Upgrades and Recommendations — Allows the HVAC technician to show customers a good option for repair or replacement as well as possible upgrades for better and best options, along with recommendations for all of the required parts.

  • Pricebook Categories by Technician — Limits what each HVAC service technician sees in the HVAC pricebook so they only access information relevant to them, eliminating errors when discussing sales options with customers.

  • Pricebook Wizard — Allows you to set your company’s markups and labor rates, while ServiceTitan’s built-in feature calculates what prices to charge for each service. 

  • Service Descriptions and Images — Gives your HVAC technicians the ability to search for specific service descriptions with easily recognizable images when discussing repair or replacement options with a homeowner. While this feature comes standard in many pricebooks, Pricebook Pro includes detailed descriptions and vivid images already built-in.

“We all know the more times a technician offers options and educates the customer, the more money that can bring in for the business and the technician,” Nielsen says.

With ServiceTitan, each member also gains access to a sandbox site, which is another feature Nielsen says she uses all of the time, especially for teaching and training purposes. Nielsen also uses the sandbox site to test new pricebooks before they go live.

Tie Your HVAC Pricebook Back to Data Reporting

Make sure all of your company’s business reporting feeds from your pricebook and any cost information listed on invoices comes straight from your pricebook.

“I say this a million times a week: Consistency breeds accuracy!” Nielsen says. “If your tasks are really clear, and the techs are not falling back on that generic or miscellaneous choice and editing and changing the pricing, you can feel very confident about your reporting.”

Using data from the HVAC pricebook makes it easier for your techs to provide solid service estimates to customers, and eliminates any grumbling or guesswork.

“If your techs are writing what they used on a piece of paper, it’s probably a guess, because they’re probably doing it at the end of the day,” she says. “I’ve been in shops before where they did it once a week. That is a guess! A digital HVAC pricebook makes it really accurate for you and your reporting.”

Most reporting discrepancies and issues will come back to haunt your workflow, so be sure to set up your HVAC pricebook correctly before things get out of hand.

“Volume will cover up a lot of problems for awhile, but if you get a handle on your pricebook sooner rather than later, then your foundation is strong and stable,” Nielsen says, “and your reporting, accuracy and everybody’s workflow is correct.”

ServiceTitan is a comprehensive HVAC business software solution built specifically to help service companies streamline their operations, boost revenue, and achieve growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.

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