Plumbing Bidding Guide: How to Create Quality Plumbing Estimates for Residential Customers
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Accurate residential plumbing estimates are the heartbeat of your business. Being able to fairly price your services and present the proposal to the customer can turn a higher percentage of leads into jobs.
If you’ve estimated correctly, those proposals can also lead to more income, and more profit for your company. But handling those residential plumbing calls and estimating the cost for the consumer is complicated by a number of factors:
The initial contact is almost always prompted by an active plumbing problem or plumbing emergency, which can result in costly repairs.
Because there’s a problem, the customer is already likely to be frustrated or upset.
The customer may not know how much professional plumbing services should cost.
For larger plumbing businesses, that means finding ways to send the right plumber to the right call, and separating the opportunities for upselling from the rest. For smaller operations, it means finding people who can handle both the emotional conversations and the repairs themselves.
And for both, empathy is required.
Dealing with the emotions caused by the plumbing problem and the associated cost is essential, and it could be the difference between the customer viewing your business as trustworthy and fair — or a scam. That distinction can be based solely on the plumbing cost estimate provided by the plumber, and how well that quote is explained.
We’ll help you understand how to build those quotes in a moment, and how Plumbing Software can make the job easier than anything you can do on a spreadsheet.
But first, let’s talk about empathy.
Plumbing Problems Mean Anxious Customers — How to Handle the Stress
Zelena Brown, VP of Operations at Britton WaterWorks Plumbing, southwest of Houston, says one of the most important traits a selling plumber can have is empathy.
Brown leads a family-owned company, with her husband as the master plumber, but before she joined the family business 11 years ago she worked in human resources.
That career gave her insight into people. To get insight into plumbing, Brown has become an apprentice plumber, and she intends to test for tradesman, journeyman and master.
That training allows her to go into the field with a great understanding of what needs to be done and how to deal with an upset customer, she says. It’s something she says she does better than male plumbers.
“If the customer starts crying, (male plumbers) don't really care, they just want to do the repair,” Brown says. “That's where I come in and we have a little bit of finesse and patience, and gentleness to help them get through some of their situations.”
Much of the anxiety customers feel when facing a plumbing problem — and the associated cost — is because they don’t understand plumbing processes. They think it’s simple when it’s not, Brown says.
“You do have some customers who can be taught, and then you have customers who are just so overwhelmed there's a mind-block and they can't even absorb what you're saying,” she says.
Brown has found using photos of previous repairs to be helpful — along with a heavy dose of empathy.
“Because plumbing customers are oftentimes so frazzled,” she says, “it's important to use empathy, adjust your tone of voice, and be ready to deal with a wide range of emotions.”
But can a plumber, male or female, be taught to express empathy, and to take time to explain what’s necessary? Or is it necessary to hire for those skills?
It’s a combination, says another plumbing company owner.
For Plumbers Doing Estimates, Finding the Right Fit is Key
Nikolai Matveev, one of the owners of Cardinal Plumbing, Heating & Air in Northern Virginia, tries to match the skills of his plumbers to the tasks he assigns to them.
Some are better at new installations while others are more skilled at diagnosing and solving a problem or figuring out where the leak is coming from. Still others excel at sales, turning proposals and estimates into work orders.
Finding the right match, Matveev says, is important.
“There is more communication (necessary) on the repairs than actually the skill and how to do the job, because you're going to have to explain (the job) fairly well — and then you have to justify the price,” Matveev says. “You have to be almost part salesman, so you're going to have to sell your job first before you even do the job.”
It can be hard to be both communicator and technician, Matveev says, so sometimes it makes sense to divide and conquer, particularly with bigger jobs. Matveev sometimes sends his plumbing manager to do estimates for larger projects, such as water or sewer line replacements, to smooth the process.
But regardless of the size of the project, it’s essential to provide an accurate estimate for your business and for the customer. How should the plumbing cost be estimated to assure that fairness?
The best way is to start at the end.
Plumbing Cost Estimates Made Easy: Work Backward
Estimating plumbing pricing services is easiest if you work backward. Let’s go through it step-by-step:
Start with how much you, or a plumber in your business, needs to make in hourly wages each week. For our purposes, we’ll assume $1,000.
Divide that by the number of billable hours in each 40-hour week. With travel time, paperwork and other issues factored in, that works out to somewhere around 28 hours per week. So, $1,000 divided by 28 is $35.71 per hour.
The cost of taxes, insurance, vacation time, retirement plan and more for each plumber must be added, So we’ll round up to $50 per hour.
Add the amount of overhead — the cost of your shop, truck expenses and upkeep — at about 30 percent of the hourly employee rate, or $15 per hour. That puts us at $65 per hour, just to keep your business running.
Add in a profit margin of 25 percent, or about another $16 per hour, and we’re at $81 as an hourly rate for quotation purposes. With average hourly rates for plumbers, according to HomeAdvisor, ranging from $65 to $200 per hour depending on location and circumstances, that rate is reasonable in many areas. Study the hourly rates of experienced plumbers near you to determine whether you are in the right ballpark.
Household Plumbing Estimates Depend On Various Factors
Now that you know the hourly rate to cover the plumber, overhead and profit, you’re ready to price individual jobs. This plumbing estimate example provides some guidelines on things to consider:
Make sure your estimate is based on a site visit, not just a block of time or flat fee provided over the phone for a common issue. You never know what you’ll find.
Some plumbers provide free estimates while others prefer a trip fee or service fee for a home visit. You’ll need to factor your policy or preference into the cost of the job.
The cost of fixtures and basic materials is usually straightforward. If a customer needs a new toilet, offering a few options at various price points is easy to do, right from the ServiceTitan app.
Consider the cost of necessary permits, debris removal for larger jobs and other expenses, such as concrete work.
Estimate the number of billable hours that will be required to do the work to produce an accurate estimate.
When you present the proposal, take time to educate the customer on what’s included in your estimate and what’s not. This is particularly important in older homes or those that haven’t been maintained well, where you could discover existing code violations, deteriorated pipes that should be replaced or other problems. These discoveries are never pleasant for the homeowner, but they go down easier if you have prepared them for the possibility ahead of time.
How ServiceTitan Software Makes Plumbing Estimates Easier
How can your business spend less time with administrative duties and more on serving your customers? ServiceTitan’s plumbing software solution makes it easy.
From the original phone inquiry to billing and payment, ServiceTitan’s software supports the customer and revenue goals for Matveev and thousands of other plumbing contractors across the country.
Among the benefits:
Integration for outstanding customer experiences — from service history and customer support from the initial phone call to dispatch and estimate to acceptance of completed work and billing.
Automation throughout those processes that increases efficiency and revenue.
The ability to customize scripted questions for customer service representatives gathering key information.
Features that help plumbers explain, complete with pictures from the visit, the problem and possible solutions, including any unexpected discoveries not included in the original estimate.
ServiceTitan’s Pricebook Pro, built with industry input, provides prices for thousands of items and easy, touchscreen production of estimates on a mobile tablet, with items arranged by category.
That pricebook gives plumbers the ability to create multiple estimates at different price points, complete with pictures and descriptions, to give the customer “good, better and best” choices. These choices mimic the online shopping experience so many of us are accustomed to.
Your business can be run anytime, from anywhere, from inventory control to accounting.
One Plumbing Service Call at a Time, for Education’s Sake
Matveev asks his plumbers, using the ServiceTitan mobile application’s estimate builder, to offer the customer multiple options, at various price points, for the repair. Those options range from what is essential vs. optional to good-better-best choices to service plans and more.
To give its plumbers time for a longer consultation, Cardinal Plumbing also gives them one call at a time, not a full day’s schedule of four or five, to keep them from feeling overwhelmed.
“They’re taking their time and making sure they explain to the customer, to our clients, if they have something unsafe or something they need to keep their eye on,” Matveev says. “We just want to make sure we're taking advantage of every call we go to, and it's beneficial for the customer, too.”
Matveev’s plumbers are not yet required to do an inspection on every house, although there is already a form in place for them to use. Inspections will soon become a requirement, he says, but with an incentive for the plumber.
“We're going to pay them separately just to do an inspection around the house, free for the customer,” Matveev says, “because we need to know if they have an old water heater or ... something leaking somewhere.
“People don't pay attention to that until it starts to get really bad. So, if we can catch that in the early stages, that will be to the benefit to the customer and will put our company in better perspective, like we don't rush.”
The Right Plumber for the Right Job
Matveev looks for good communicators in addition to technical skills when he hires plumbers. That can make a difference in the field, particularly for certain jobs.
Then, to inform the managers for training, Cardinal reviews some key ServiceTitan data regarding its plumbers’ performance, including gross revenue, average ticket sold and closing rate with customers.
The training includes how to handle a declined job, how to recognize opportunity, and more. But Matveev still wants to send the right person to the right job.
“If people have a water heater leaking too, you definitely want to send a good communicator to that because they can sell that job much more efficiently than somebody who's not naturally a good communicator,” Matveev says.“If the customer throws them some little objection like, ‘Oh, yeah, that's too expensive,’ they (can’t) shut down like, ‘Oh, OK. Well, goodbye.’
“We just want to make sure whoever is out there, they can explain really well and if the customer has some kind of concerns, they can address those concerns,” he says. “And, by the end of the day, close the job and make sure everybody's happy.”
ServiceTitan is a comprehensive software solution built specifically to help home service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our cloud-based platform is used by thousands of electrical, HVAC, water treatment, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.
Ready to learn more about what ServiceTitan can do for your business?
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ServiceTitan is a comprehensive plumbing 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.Learn More