3 Red Flags to Look for When Considering Flat Rate Pricing
If you’re like many business owners, charging a flat rate for your SIP trunk services initially seems like a great pricing scheme: it’s easy to quote customers on projects, customers know up front what they are paying, and, if you work efficiently, you’ll come out ahead financially.
As good as flat rate pricing seems, there are a few red flags to be aware of before you embrace it wholeheartedly.
Projects Take More Time Than Planned
When you set up your flat pricing rates, you probably estimated how much time each client would take from your schedule and built an hourly rate into the flat rate. This system works well if everything goes as planned for each SIP trunk customer.
Unfortunately, you will have some customers who are especially needy, some customers whose equipment fails regardless of your tender loving care, and some customers who like to shoot the breeze when they call your tech support number.
When a project eats up too much of your time, your hourly rate actually goes down and you lose money.
While a group of your customers will hit your estimated time allotment, many will go over if you don’t track your time carefully. If you find yourself losing time on flat-rate projects, it’s probably time to switch to a different fee structure or to raise your rates.
Projects Cost More Than Planned
In addition to estimating the time needed for each client, you also likely estimated the cost of the SIP trunk services you provide. Any overhead fees you must pay, equipment costs you incur, and employee salaries must all be figured in.
If your overhead fees increase for some reason or you experience an equipment failure, you may end up losing money on your flat-rate pricing, unless you built that cost into your pricing structure.
Customers Wonder What They Are Paying For
As hard as you try to make your flat-rate pricing transparent by listing all the included services, customers will wonder if you’ve built any hidden fees into your pricing.
Customers who require very little of your time may especially feel that they are paying too much for too little service.
Unless you break down your flat rate by category and show those customers what exactly they are paying for, they may never be satisfied.
Flat rate services work really well for some industries, but SIP trunk resellers may do better with a different type of fee structure.