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Book
Premium
join:2004-05-24
Shepherd, MI

1 recommendation

[Bus. Ops] Gas Prices and Your Bottom Line

Just curious what others are doing about the rising fuel costs? On the cost side, We're contemplating whether to raise our rates across the board, a sur-charge or a truck roll fee for all service calls.

We've pretty much exausted route optimization. We're also considering different ways we can monetize the tech's activities and sell more off the service van.

Thought maybe this discussion would help us all solve a common dilemma.

Thanks,


Chele

join:2003-07-23
kudos:1

I don't think customers would appreciate a fuel surcharge for a product that doesn't require any fuel in order to be delivered:(
Maybe you could increase your service calls' charge, why should customers that never call be penalized for the ones that do call. We have customers we haven't seen in years! I think people are very leery of any fees in general and I wouldn't want to create any animosity if possible.



treichhart

join:2006-12-12
reply to Book

Well what you can do is go Dual fuel conversion setup like CNG/GAS setup that is the plan I am going with or flex pure E85/GAS or Pure Bio Diesel from Used Fry Oil from Fast Food Joints.


jcremin

join:2009-12-22
Siren, WI
kudos:2
reply to Book

I'm with Chele.... Make sure the ones who use your fuel are the ones who pay for it.

For service calls, just factor it into your rate, or charge a travel fee.

For installs, make sure your install fee is high enough to cover the fuel you use. We also tell people we won't come out unless we can install if there is enough signal. If they just want us to test but don't want us to setup that day, we charge them a $25 fee to do it.



Inssomniak
The Glitch
Premium
join:2005-04-06
Cayuga, ON
kudos:2
reply to Book

Buy a Chevy Volt and strap a ladder to it

Our service truck is a 2006 Dodge caravan, with a ladder rack for extra wind load.

We are just looking to replace it with something more efficient but no plans to raise any rates over it.
--
OptionsDSL Wireless Internet
»www.optionsdsl.ca


Book
Premium
join:2004-05-24
Shepherd, MI

I hear everything you guys are saying and it all stands to reason. On the flip side, many costs are spread over the entire customer base and so that's a bonafide option as well. It sounds like you guys are eating the increased costs as of right now - but for how long? At what fuel price point will you 'have' to address it and what are your plans? I think everyone has that point where it becomes unbearable. Our towers are scattered over a 1000 Square Miles area and based on our current pricing structure, we need to do something now. Thanks for your thoughts as I believe it in the cards for everyone.


LLigetfa

join:2006-05-15
Fort Frances, ON
kudos:1

Have you determined what percentage of SG&A would account for the cost of gas? Your subs may see an across-the-board increase as disproportionate. I guess it may come down to what the market can bear.

It would probably be more palatable if the cost increases went directly to those subs that call for a truck roll.
--
Strange as it seems, no amount of learning can cure stupidity, and formal education positively fortifies it. -- Stephen Vizinczey


Chele

join:2003-07-23
kudos:1
reply to Book

Book

How often do you visit your PoPs that it's affecting your monthly operating costs? Could you make your PoPs more self sufficient, not only so that it lowers your labor/fuel expenses but also so that it gives you a bit more time to take it easy:) We do visit our PoPs but not enough to affect our monthly operating costs.


Book
Premium
join:2004-05-24
Shepherd, MI

Chele,

It's not so much the Pops we visit, but the customer associated with them.


jcremin

join:2009-12-22
Siren, WI
kudos:2

What is the purpose of making so many trips to the customers? I'd focus on reducing whatever is causing you to have to have to make those trips in the first place before raising prices.



Inssomniak
The Glitch
Premium
join:2005-04-06
Cayuga, ON
kudos:2

said by jcremin:

What is the purpose of making so many trips to the customers? I'd focus on reducing whatever is causing you to have to have to make those trips in the first place before raising prices.

Yea thats a good point.

We rarely visit customers past the first truck roll. More in the summer as stuff gets damaged mostly in the summer.

It all goes to site surveys and installations for us.
--
OptionsDSL Wireless Internet
»www.optionsdsl.ca

prairiesky

join:2008-12-08
canada
kudos:2
reply to Book

It's mostly installs for me. I like to schedule all my stuff for the weekends. That way i can get it all done in one day, spend some time at the POP and away we go.



Big Chilling

@execulink.com
reply to Book

said by Inssomniak:

Our service truck is a 2006 Dodge caravan, with a ladder rack for extra wind load.

We are just looking to replace it with something more efficient but no plans to raise any rates over it.

What are you thinking about replacing it with?
Im looking for something larger than a Caravan cause i need the space but fuel cost and size dont relly fit

gunther_01
Premium
join:2004-03-29
Saybrook, IL
reply to Book

The clock starts when the van does. Either from our home base or the job before for actual service calls. Make it a very firm line between what is yours to fix for free and what is the customer's responsibility.

Problem solved, and fuel doesn't really matter at that point in regards to "service calls"
--
»www.wirelessdatanet.net



WHT

join:2010-03-26
Rosston, TX
kudos:5
reply to Inssomniak

said by Inssomniak:

Buy a Chevy Volt

WHT ponders how big a PoE needed to charge it.

raytaylor

join:2009-07-28
kudos:1
reply to Book

I would agree with the above - it seems you might be making too many visits.

I do free installs, within a 50km radius. Over 2 years, the monthly service fees for the minimum service tier covers two truck rolls - an install and a revisit.

Over 50km from my office, its at customer cost, 80c per extra km.

I have many customers that i setup 3 years ago, and havent been back since.

If its not an urgent callout, i say ill call in next time i am in the area, if i expect it to be within 7 days.


wirelessdog

join:2008-07-15
Queen Anne, MD
kudos:1
reply to Book

We increased our rates by $2 across the board.



nunya
Premium,MVM
join:2000-12-23
O Fallon, MO
kudos:12
Reviews:
·Charter
·voip.ms
·surpasshosting
reply to Book

The only realistic solution is to increase prices. Fuel is a "material" in any line of service work. When the price of materials go up and stay up, you have to raise your prices accordingly. It's a fact of life.
I foolishly used to do a "fuel surcharge", because I wanted customers to "share" in my anger at over-priced fuel. The simple fact is, they already do - and pointing it out doesn't help.
All that matters is the bottom line. I nixed that policy and did what every other business does - raise prices.

I cannot single-handedly control inflation. It's happening with or without me.

Changing vehicles is a ridiculous notion for the most part. I learned long ago that working out of a small, under-equipped, vehicle is worse than driving a large overloaded vehicle. If you don't have what you need when you get to a site, you'll have to drive to go get it. That's where you lose money.

The price of converting a vehicle to use alternate fuels far outweighs any savings. To switch to CNG would cost $9,000.00 on my E350. That does not include the expensive pump I would need to refuel. I would also have to upgrade my gas service. There are no CNG filling stations locally.
--
...because I care.



treichhart

join:2006-12-12
reply to Book

Nunya from what I was reading for CNG there is a home adapter that connects to your natural gas line then you can fill it at home.

»www.autoobserver.com/2011/03/brc···ion.html

»www.wisegasinc.com/wg-phill.htm


gunther_01
Premium
join:2004-03-29
Saybrook, IL
reply to Book

Really thought, (and this is on topic but off) what are you charging for service calls that you need worry about this in the first place? $25 an hour? All I can really say is if we roll a truck it's always been in our favor. If it's our network or issue that's fine, and free. But a "service call" isn't cheap.
--
»www.wirelessdatanet.net


Book
Premium
join:2004-05-24
Shepherd, MI

There are two types of Equipment:

1) Equipment that has failed
2) Equipment that will

We've been at the wireless side 10 years. It's not that we're making multiple trips to any given customer but certainly we are visiting customers every week. In our business model, we maintain ownership of the CPE so it's ours to fix unless it's neglect, abuse etc. We didn't build our cost model based on $4+/gallon gasoline. Of course we have stood steadfast on our rates (actually dropping rates because of cheaper bandwidth and equipment costs) throughout all the fuel price volatility over the years but fuel prices above $4 no longer works in our cost model. Whether your willing to admit it or not, all of us have a breaking point where we MUST make adjustments. I would say that I'm probably past mine and we've tried to ride it out hoping for a decline in prices but all indications are fuel costs are going to continue to rise. Denial and Hope are no longer an option for us.



nunya
Premium,MVM
join:2000-12-23
O Fallon, MO
kudos:12
Reviews:
·Charter
·voip.ms
·surpasshosting
reply to treichhart

That's what I was saying.



That does not include the expensive pump I would need to refuel. I would also have to upgrade my gas service.

The "Phil" is $4500 by itself. That doesn't include upgrading my gas service. It also takes 800W of electricity while it's running. It would have to run about 8-12 hours per day to fill my truck. That's nothing to balk at.
Don't get me wrong, I think NG is going to be the fleet fuel of the future. It's just going to require vehicles that were built for NG use (not converted).
--
...because I care.

wirelessdog

join:2008-07-15
Queen Anne, MD
kudos:1
reply to Book

Well, so much for my taking the week off LOL.

So we have a customer who is also an attorney. He is threatening to sue because he demanded a service call today as opposed to Monday when we will already be rolling a truck in the area to fix his service. His issue is because he is the only call today, 60 miles in the opposite direction my guys will be in, they quoted him $75 if the issue is on his end or $40 if it is on ours to cover the fuel. He claims that is "illegal"

Anyone have any input on this? I'm guessing he mistakenly thinks we are a regulated utility which many customers incorrectly assume.

We routinely have truck roles to this customer and it has always been his router. Up until now, we have not charged him for said service calls.



nunya
Premium,MVM
join:2000-12-23
O Fallon, MO
kudos:12
Reviews:
·Charter
·voip.ms
·surpasshosting

Unfortunately, that's a common ploy by lawyers. They think that "Esq." gives them some sort of privileged status where they should get everything for free.

What does your contract say in reference to service calls? While it's obviously 100% legit to charge the customer if the trouble is on his side, it may not be ok to charge them if the trouble is on your side. Again that depends on the contract.

If I were in your shoes, I would refund a months service and pull the plug, unless you have a contractual obligation. Any customer threatening to sue is never worth the revenue.

Maybe a little dose of dial-up or Wild-Blue will curb his litigious attitude toward you.

I used to think the 20/80 rule was a bunch of "new paradigm" B.S. mumbo jumbo.
After a few years of running my own businesses, I realized it's true most of the time. Sometimes it "pays off" to fire customers.
--
...because I care.


wirelessdog

join:2008-07-15
Queen Anne, MD
kudos:1
reply to Book

I emailed the customer offering to let him explain before I take adverse action on his account.

I believe, regardless of contract (TOS) The fact we were willing to go without charge on Monday but offered to go today for the cost of fuel is perfectly reasonable. Service is as-is as-available.

Customer is month to month so yes, I am leaning towards cutting them loose. I personally don't like threats either.


Chele

join:2003-07-23
kudos:1
reply to Book

Being able to choose who we do business with is one of the few luxuries we have. We have a 30 day money back guarantee and month to month service, neither party is locked in.