Contract vs Chargeable (A History)

[Dave_Conway]

Well it’s been looming hasn’t it 😉

This is surely not an easy subject as there are pro’s and con’s to both sides of the coin really.

Chargeable work is probably where many of us started so I will here as well. There are distinct advantages for all of the reasons mentioned in the related postings recently for regular chargeable work, mainly financial. You get paid on the nose, the charges will generally be higher than contract work and you make a far higher mark up on spares. If the customer is a happy one when you leave, they will tell all of their friends and family should any of their appliances fail, cheap and easy advertising and the best sort, word of mouth means you are already trusted and respected when you enter the house for the 1st time.

So, now we come to contract work. Regular income, yes; and a must for many of us to survive in recent years with the major drop in prices of appliances and the subsequent drop off of chargeable work. Probably more applicable to those of us that grew to employ engineers to handle the advancing chargeable work before the afore mentioned price cut craze.

As time advanced and we saw the massive influx of “the work provider” (or WP as we lovingly now know them), mainly due to a huge increase in retailers selling extended warranties, manufacturers realising they could no longer support highly paid engineers only visiting 6 customers a day…. many of us became more than a little optimistic when we were offered shed loads of contract work. “Great” we thought, it’s less than I would normally charge but it’s regular and there’s lots of it, so I can keep the extra engineer(s) who may have been a burden on the monthly wage bill.

I won’t bore anyone with the “middle history” as most of it is in the Rumour Mill, suffice to say, lessons have been learned along the troubled path of contract work, wrongs have been put right to some extent, friends have been made along the way and the WP now reads what we are saying (well most anyway), whether they choose to listen is entirely their choice.

So, being a bold sort of post that this is, let’s name names.

Connect Distribution: Kevin has rightly pointed out that they appear to be doing the right thing, good communication, reasonable rates, prompt payments etc, I have myself had extensive talks both sober or otherwise with Connect’s representatives and the sentiments that we all try and put across seems to have gotten through. Only time will tell, let’s hope it stays that way.

D&G: Always supportive of their agents, prompt payment, always very willing to take on matters, whether technical or otherwise with the various manufacturers/insurers they represent. A BER rate applies.

CDA: Excellent communication, good rates, very flexible, customer service paramount to the business. No BER rate.

AIS: Varied work, mainly low volume obscure brands, easy to work for, excellent understanding of the service industry, reasonable rates apart from the BER rate.

ISDAL: Mainly refrigeration, a high level of BER’s but no lower rate for this. Very good level of agent support and communication. Rates are not so good though, this is in some way compensated by the very high 1st time fix/write off. Teba spares are the main issue, there aren’t any.

GBDar: Very poor rates and agent support as far as I can tell, never having accepted any work from them, but I’ve seen the rates and conditions of work. A BER rate applies, given that most of the appliances are Servis; the BER’s may well be significant.

JTM: Again, not worked for but seen the rates and conditions, A BER rate applies; the rates are low by comparison. Work varied by the looks of it, mainly extended warranties for Powerhouse.

NESN: Very possibly the main reason for much of the distrust and animosity toward the WP of recent years. Much has been said and repeated so I won’t. They seem to be getting their current house in order but need to rectify their wrongdoings of the past before being in a position of trust again. Rates, OK, they do negotiate some reasonable deals and the evaluation calls for accidental damage insurers is very good. Prompt payment has always been poor due to a high level of rejections, apparently this has been rectified.

That’s the WP’s that I have dealt with or know something about, I’ll maybe delve in to the manufacturers another day.

Still we come back to the main reason for the post, chargeable or contract?

Well, I’d have to say, whichever works best for your own personal business. There’s little point in listening to or reading the praises of anyone in particular. All I would say is, don’t get bogged down by the contract work, chargeable is always there. I made the huge mistake two years ago of completely overwhelming my business with that work and it took me 6 months to get the chargeable work back after I chucked it out, I was running about like a blue arse fly not making any money. That was two years ago and much has changed 😉

Dave.

[Lawrence]

Re: Contract vs Chargeable (A History)

Dave_Conway wrote:

Well, I’d have to say, whichever works best for your own personal business. There’s little point in listening to or reading the praises of anyone in particular. All I would say is, don’t get bogged down by the contract work, chargeable is always there. I made the huge mistake two years ago of completely overwhelming my business with that work and it took me 6 months to get the chargeable work back after I chucked it out, I was running about like a blue arse fly not making any money. That was two years ago and much has changed ;)Dave.

I echo all of that Dave ,I was in pretty much the same position I think you and I joined NESN about the same time ,And whilst I don’t want to put words in your mouth, I found the work was pushing us in a direction I didn’t like ,But because of the contract ,Performance clauses ,intransigent management etc…I had to stick with it ,Then I had both my engineers leave and was left with huge volumes of work that nearly crippled me ,So took the decision to lose some of the contract work ,used subcontracters to see out my notice periods on various contracts ,As I lost contracts so my cash work seemed to come back on stream with all of the advantages
it has attached ,Now I am left with
CDA Fantastic to work with ,and increasing work levels all the time
D&G Prompt payment ,Back you up wherever they can
Smeg not huge volumes but pay okay ,and the cash work is good
De Dietrich Now through D&G so see above
MFI prompt payment strong agent back up
And a string of commercial clients who are prepared to pay for good back up
Having experienced lots of contract work for what its worth I think the things to bear in mind are
Know what youre bottom line is ,And don’t accept work at any less
Look out for a thing called “aborted call rate ” this means they will pay you half the normal labour rate for a write off /report
don’t put all your eggs in one basket ,spread your incoming work out dont let one source of work dominate your’e income to the degree that you have a house of cards effect i.e one source dries up and undermines everything else .
But I think ultimately it depends on individual companies and the direction there owners take them in ,I suppose the trick is to know what works for you and your’e business

Lawrence

[Dave_Conway]

Re: Contract vs Chargeable (A History)

Yep, it’s about what works best for you 😀

Sorry I forgot Smeg Service (Servevast), no issues from me, apart from the price of some of the parts 😯
The work is fine and the support is superb, rates are OK also, no issues really apart from a constant bombardment of reqests for job updates, many duplicated, I only respond to one of them with the requested information :;

If I get hung drawn and quartered because of this post I hope I get some back-up 😀

Dave.

[Penguin45]

Dave,
This is a damned fine review of where we’ve got to. I confess that I don’t work for any of the companies outlined above, but would agree that payment can be a major issue – these firms are all far bigger than we are and must understand that it’s a two way street.

We specialise in property work for Estate Agents, Letting Agencies, Landlords and the like and they are all FULLY aware that if they expect prompt service, we expect prompt payment. Apex are currently on stop (again…) and Headinley Estates and Express Lets got sacked (Very satisfying, sacking a customer – they don’t like it at all. Especially in Leeds, where all these agencies are working together to maintain their market).

“You mean you DON’T use Quality Washer Repairs?” 😥
Pay up and we’ll be there on Monday.

There is influence to be used in every field, we should use it. Fully.

Regards,
Chris.

[admin]

Re: Contract vs Chargeable (A History)

A very good post with sensible answers, dave.

I think you cover most of the facts and whilst I also don’t work for quite a few WP’s, its easy to find info on them in these pages.

As for manufacturer work, again many posters hold agencies but I suspect few manufacturers would be pleased with their agent, telling it straight, good and bad as its usually a mix.

As you point out contract rates are in some cases good and reasonable with MFI, Elba, LG all at £40.00 or above. This is for in guarantee work. So if these manufacturers can do it….why can’t they all do it.
As has been said above, its about what works best for you, but if you think about the work offered at poor rates and low Ber payment also consider how you can improve the situation by saying NO thanks. If enough say NO then its the WP/Manufacturer who has to rethink, perhaps improving the climate for the whole of the industry.
I am sure there is competition between WP’s for contracts and their biggest cost when pricing is our labour….think about it.

Good work at good rates…not so hard to “want that” is it?

Kevin

[Dave_Conway]

Re: Contract vs Chargeable (A History)

kheath wrote:Good work at good rates…not so hard to “want that” is it?

Indeed not, that sums it up in a nutshell really Kev 8)

Dave.

[Alex]

Re: Contract vs Chargeable (A History)

Further to Dave’s posting that initiated this.

There is no doubt that the chargeable calls are paramount. We give those customers a high priority, as they are able to vote with their feet & go elsewhere if they perceive any delay. We try to give a high level of response to all our other work providers, whether on insurance or under guarantee, especially when we get a good level of support and the paymasters reward us accordingly.

Over the years we have tried lots of agencies, some have had issues where we could not work with them and after a short “trial period” we chose not be part of their networks. Examples being:- G.B.Dar; D.R. Cooker hoods; Teka/Kuppersbusch; ASKO; Britannia Cookers & L.G.Electronics.

Some have chosen to go their own way such as Gias/Candy or Merloni and move away from agents. In both cases we terminated them before they dropped all their agents; we took the initiative due to operational issues in the 1st case & cash flow in the latter.

The rest whom I can only speak of from my own experience:-

DOMESTIC & GENERAL: Brilliant, they recognise the good agents and have been known to reward with promotions as well as supplying feedback from customers. They pay up very quickly and rejections are negligible.

ELECTROLUX/SERVICE FORCE: Full credit to Steve Clarke, 1st year warranty rates are on the low side, however the package is good as there are lots of add-on’s such as Insurances etc. Rejection rates low, but payment monthly right up to the last couple of days work, and Technical Support good.

CDSL. I should put something in the appropriate thread on this. The support is 1st class. Despite the pressures that are likely to be attached to such an operation, you always get a cheerful response and if you are stuck they endeavour to get the information or help that you need. The I.T. set up is out of this world. The turn around on parts and information is good, as long as they aren’t let down by manufacturers. The payments are on time & rejections unheard of. Only negative things, L.G. and something that really applies to Service Force agents, the allocation of spares we normally get from Distriparts have to be sourced from CDSL. Causes more administration at our end. Dave Parker owes me a pint.

A.I.S. We terminated back in the spring due to the low rates on offer. We hadn’t had an increase for nearly 3 years and they never replied to my letters or phone calls. Believe they have improved since.

I.S.D.A.L. Mainly refrigeration. Good payers, poor spares support on some of their obscure makes, poor rates on some as well, i.e. Norfrost £25 & Teba £30.75. The uplift on gas is about a fiver and refrigeration sundries are only £16. If you lockring a compressor the fittings & drier can be that figure alone. A review is needed between them and some of the manufacturers to negotiate a realistic rate. I am sure they are fully aware there is need for rates to come into line and ISDA need to convince a few people I suspect. Despite all the above, very agent friendly and supportive. A good team.

LEC: Good support, rates a bit low but there is recognition when it is a compressor change as the money goes up nicely, sundries are low @ £8 but the higher labour rate does compensate. They also pay more for mileage, which helps. They are very agent friendly and support us well. Again a good team.

ELCO/BRANDT. Part of the D&G package and the only negative side. Very little support from Brandt themselves, all calls are double visits and nigh impossible to return the parts when the product has been exchanged.

BEKO part of the Service Force package. For operational; reasons I have no comment.

CROSSLEE As above re the Service Force remit. Better that what they used to be, rejection levels are now realistic and payment better. Support from Crosslee themselves could improve as well as the rate on the condenser dryers.

MERCURY COOKERS. 1st Class, good product, good payers, and parts supplied overnight free, pre-diagnosed by them and they get it right as well. Very impressed. They treat you like family.

MFI: Good support, Tony Brown & his team have got it right. They know how to treat their agents, payments are on time and rejections unheard of. Spares are good as well as tech. support. Only downsides are high percentage of double calls, some are a pig to get out and time for a pay rise. London General are a pain, but if I get any problems, MFI accounts back me up.

SERVEVAST. A good lot to do work for. I used to moan about payments, as they needed chasing a lot. 3 years ago they were a nightmare, but they’ve got it together now. As long as we keep sending statements we get paid. 60 days payment regime, but I pay them every 60 days as well. The tech support is good and all parts are now on disk. Rates seem to be negotiable and not set in stone.

EXPERT: Only had 1 or 2 calls from them, early days.

I would say that sums up our business pretty well, I suspect my findings are constant among most of us.

Alex

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