To Fee or Not to Fee: New Study Reveals Pushback on Visit Fees

On the contractor side, 30% said they charge fees, while 70% offer free visits. Furthering the divide, of those contractors who do charge visit fees, the average price is $114, but among homeowners willing to pay, they said the maximum they’d be willing to fork over was $59.

This data presents quite the conundrum for contractors, who need to cover costs, but also can’t afford to be out of the running.

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GREAT DIVIDE: While most contractors don’t charge fees, the data shows that the ones that do are not in line with what homeowners would be willing to pay. (Courtesy of myCLEARopinion Insights Hub)

Justifying Fees to Homeowners

Rolling a truck has a lot of associated costs, and even though a good percentage of the time it results in a sale or new customer, there’s always those other times when a homeowner is just looking for a free second opinion so they can “do it themselves” or go with a guy they know who can “do it cheaper.”

For those contractors looking to recoup those costs, Will Merritt, managing partner, Effective Media Solutions, said first and foremost, they need to remind homeowners that they are the professionals, and that’s what homeowners are paying for.

“(Technicians) hold multiple licenses in order to perform their work, such as mechanical licenses, NATE certifications for techs, and refrigerant handling licenses, to name a few,” Merritt said. “Not just anyone can do the work these professionals do, so contractors should be proud of themselves.”

Chris Petri, operations manager at Petri Plumbing, Heating, Cooling & Drain Cleaning, said the fee they charge ensures a licensed, background-checked professional who will show up on time, assess the issue thoroughly, and provide honest recommendations, not guesswork.

“We take the time to properly evaluate the issue so we can offer the long-term solution the first time, saving you money and future headaches,” Petri said. “Unlike companies that offer ‘free’ visits and rush through appointments to pack as many as possible, we stand behind our service and show up prepared to deliver value. If you choose to move forward with us, the visit fee is completely waived.”

Patrick Garner, plumbing service manager, Cardinal Plumbing Heating and Air, added another point – their service fee is to ensure they’re sending techs to people who are serious about getting help.

“It costs money to send someone out. Things like gas, time, and missing other jobs,” Garner said. “The good news is, if the homeowner moves forward with the repair, we apply that fee to the cost. So they’re not paying extra. It just gets things started.”

Jodie Deegan, business coach, Nexstar Network, said that first, contractors must be clear when to charge the fee and when not to.

“Estimates for HVAC equipment replacement are customarily free. Even though the process of estimating and sizing can be time-consuming, it is an opportunity to build rapport with the customer and understand their need,” Deegan said. “For service, there is considerable expense involved in everything that must take place before a technician arrives on their doorstep. The cost of the service fee almost never covers that cost, but it is a realistic expectation to recapture some of that expense.”

SURVEY SAYS: As it turns out, homeowners don’t like paying any more money than they think they should have to. (Courtesy of Getty Images / welcomia)

Alternative Ways to Cover Costs

If charging a visit fee isn’t feasible in certain markets, there are alternative ways to recoup resources without losing leads.

Many contractors will deduct their assessment fee once the homeowner agrees to have them do the work, Merritt said.

“I guess we should divide diagnostic or trip charges into two categories. A diagnostic fee is pretty commonplace for service calls,” Merritt said. “The homeowner has begun to understand it is not free for an HVAC contractor to come out and assess their broken furnace or air conditioner.”

Most contractors will waive the fee or work it into the cost of the job, Merritt added, but estimates for new systems are a different thing, and most companies do not charge for these.

Petri suggests a few options: apply the visit fee to any work approved, so customers feel it’s a pre-investment, not an extra cost; waive the visit fee for first-time customers or offer a limited-time promotion to attract leads; or use fixed rate pricing to set expectations and show you’re not hiding fees.

Garner said their customer service team has the option to waive the fee if needed, especially when someone seems unsure.

“We also offer a protection plan. If someone signs up, their service visits are free,” Garner said. “Another option is to run a special offer like ‘Free Service Visit This Week’ to bring in more calls.”

Deegan suggested that if a contractor is going to charge a fee, to be confident about it.

“If the customer understands what they are getting for their money, the value will exceed the cost,” Deegan said. “The company website must also explain the fee and what is involved in the visit. This should also include the features that are beneficial to the customer, like ‘certified technicians,’ ‘well-trained,’ or ‘background tested,’ etc. Reviews also play a monumental endorsement in that value. Most companies waive the fee when the work is approved by the customer.”

How To Decide Whether Or Not To Charge

For Garner, the decision to charge a fee or not comes down to one basic factor: how busy are you?

“If your schedule has a lot of openings, free visits can help you get more customers and build trust. But if you’re already booked up, a service fee helps you focus on people who are ready to move forward,” Garner said. “It’s also smart to see what other contractors in your area are doing. You don’t want to be the only one charging or the only one not charging.”

Murphy agreed that “are you busy or not?” is the only real filter.

“Every lead is an opportunity you already paid for,” Murphy said. “If a dispatch fee is what’s keeping you profitable, something else is broken. Maximize every opportunity. Train your techs to ethically find and solve problems. If your mission is genuinely to help people, the money follows.”

Deegan suggests looking at some performance indicators, like low conversion rates with homeowners who are not investing in your services.

“Service fees are a qualifier,” Deegan said. “If someone is too cheap to pay a nominal fee to have a professional drive out to their home, perform a proper diagnostic, etc., then we have wasted precious time. This is especially damaging when we have a high volume of calls and not enough technicians. Not everyone of books a call with your company is your customer. A low fee is better than no fee.”

Merritt offers a different, yet interesting, alternative to test the waters.

“Contractors often will pose as a potential customer and call other local contractors to find what their maintenance agreements cost, diagnostic fees, financing, etc.,” Merritt said. “This is very commonplace in our industry. I do not know of many companies charging to come out for equipment estimates, just for service calls.”

Best Practices for Presenting Fees

If service fees are part of the business plan for any of the reasons listed above, it’s best to at least have a game plan in place to present these to customers.

Merritt said transparency is key, especially on websites.

“We are seeing more and more companies using tools, such as Contractor Commerce, to show actual pricing for new systems on their website,” Merritt said. “Consumers believe and want to shop for HVAC just like they shop for other consumer products. So, our industry is trying to meet that need.”

Having fees listed on a website will also assure the customer they are getting charged the same as everyone else, and not just what the salesman at their house feels like that day.

Murphy suggests just presenting them at the end.

“If you’re spending money on marketing to generate leads, use a ‘no cost dispatch’ coupon or something similar,” Murphy said. “The goal is to gain market share and customer loyalty. Make it easy for them to say yes.”

Garner and Deegan, again, both suggested being clear and upfront.

“Don’t make it a secret. Include the fee proudly on your website and other forms of advertising. The wording also plays a part in building value. If your service fee is ‘only $59.98’ or whatever the amount is, it should appear to be the value that it is,” Deegan said. “Assume the customer understands the fee while booking and gathering their information. The conversation about payment is usually handled near the end of the call booking process. Script and train on overcoming objections to the fee.”

Here are some of the simple and clear messages Garner has found successful: “The service fee goes toward the cost of your repair”; “We’re waiving the service fee for first-time customers”; “Our members never pay a service fee.”

“This helps people feel like they’re getting value, not just paying to talk,” Garner said.