How to Set Up Service Call Fees for Field Service Businesses

Of all the service prices available in any given trade, call fees are the easiest to get wrong. Either they’re too high, which instantly turns customers off, or they’re too low, causing them to eat into the profit margin.

Some contractors write them off as losses and forget about them altogether, which isn’t wise from a business perspective. Especially when you have a lot of clients calling in for quote estimates and diagnostics, but never actually booking the job.

Today, we’ll discuss how to calculate your call fees, what they should actually cover, and how to communicate them without losing the customer.

What Should Service Call Fees Cover and What to Charge?

The service call fee should cover everything related to that specific call, including travel fuel costs, diagnostics, and time spent on location. How much you should charge varies depending on the trade, local market conditions, and the job itself.

Here are the average call fees to consider for some of the most widespread trades:

*It’s worth noting that some service call fees are worth as much as the service itself, with locksmithing being the best example. A $35-$50 call fee for a $50 job can seem excessive. This isn’t necessarily the fault of the contractor if that’s what the expenses actually add up to, but, in cases like these, the CSR team should inform the client of the situation over the phone.

This will prevent unpleasant situations like the customer refusing to pay the fee or paying it, but leaving a negative review afterwards.

Trip Charge vs. Diagnostic Fee vs. Hourly Labor Rate 

A major part of the industry treats trip charges, diagnostic fees, and hourly labor rates as interchangeable. This is a problem because each of these terms carry different meanings and costs. Plus, not distinguishing clearly between them can confuse clients, because they don’t know what they’re actually paying for.

So, here’s what each means:

Trip charges: Simply put, these include easily-quantifiable costs like fuel expenses and drive time translated in labor costs. The actual costs of moving the technician from the company’s headquarters to the client’s location can vary between negligible and high. For this reason, some contractors fuse them with the diagnostics costs, while others treat them as separate fees.

Diagnostic fees: Diagnostic fees are pretty explanatory and refer to the actual work involved in identifying the problem on site. The fee is typically a blend between the time needed for the diagnostics process itself, the complexity of the job, and the technician’s expertise (professionals will charge more for the same job). In short, longer and more complicated diagnostics have higher fees.

Hourly labor rate: The hourly labor rate covers the actual job once the diagnostics is complete. It’s not part of the call fee; we’ve only included it here because some businesses often use it as a synonym for diagnostic fee, on the basis that diagnostics work is still work.

An important note here: Many contractors either don’t charge anything aside from the hourly work rate or only charge for diagnostics, since it also involves some work. As a result, the business will absorb the costs of all those un-monetized services, which will show on the end-of-the-year spreadsheet.

How to Present Your Service Call Fee to the Customer 

The truth is that not all clients are even aware of the concept of call fees. This means that presenting them with one, especially if it’s on the higher end, might not sit well with them.

It’s not your fault, because you need to cover your call-related services (diagnostics, travel expenses, time spent on site) somehow, but it’s not really their fault either. 

So, how you present your service call fee to the customer matters. Here are some useful tips in this sense:

Disclose your fee beforehand: Your fee should be visible next to the rest of your service fees. This eliminates the surprise factor, as clients know what to expect even before you reach their doorstep.

Explain what the fees cover: Many contractors ignore this point. They just state the fee and expect the client to swallow it whole. But questions like “Why does it cost $100 just to show up?” still need answering. Just because the fee makes sense to you, from a business cashflow perspective, it doesn’t mean it makes sense to the client as well. 

State the fee model clearly*: Most of the contractors charge the fee as a standalone model, regardless of whether the client moves forward with the job or not. Others prefer to include it in the overall job costs. You should state the preferred model clearly, so the client knows what to expect.

*Regarding the fee model – Contractors who include the fee into the final bill typically do so on the basis of “Free diagnosis if you fix it with us”. If this sounds similar to the “Free oil changes” marketing strategy car workshops use, that’s because it is. It’s exactly the same principle.

The problem is that this may transpire as a deceptive tactic. You advertise something as free (your time or work), when it’s not. For this reason, you should always use the standalone model and state your call fee beforehand. It won’t help you close as many leads as the other method, but that trade-off earns you higher customer trust, which will serve you well long-term.

What to Use to Calculate Call Fees – Pricebooks or FSM Software?

Pricebooks and FSM software typically serve different purposes, but you can use both to calculate, update, and track your call fees. 

Pricebooks are more limited in their capabilities, as they’re specifically designed for calculating accurate prices consistently. Contractors use them to calculate their service pricing from a cost-plus-profit perspective. Call fees are just one more addition to the whole.

FSM software is in charge of much more than that. These tools are necessary to run the daily operations, from booking to dispatching, invoicing, and general operational logistics. Naturally, you can also use them to set and integrate your call fees in your pricing model.

FSM software is a must for any growing business, because it helps with operational functioning, but pricebooks are also a good choice if you want something simpler and more specialized.

The only downside to current FSM tools is that they lack customizability. Your business either fits the software or it doesn’t, at which point you need to start looking for alternative solutions.

How Dalton Mills Helps with Call Fee Calculation

FSM software models today have almost every feature you could need for your business operations, with one caveat: they’re not customizable.

As an AI-powered platform, Dalton Mills fixes this problem by allowing you to build your own FSM or field-service model yourself. This matters because businesses operate in vastly different environments from one another, which explains why, for instance, they have such different call fees, even within the same trade.

A 10-truck plumbing company operating in an urban environment will charge considerably higher fees than a 2-men plumbing crew active in a rural area with a lower clientele. Some contractors also prefer to include their review ratings as justification for their higher call fees, along with things like same-day services and premium equipment.

Standard FSM software may not be able to account for all these variables, but you could. If you could build your own FSM software, you’d know exactly how to set it up to cover those niche differences.

Dalton Mills allows you to do just that: build your own FSM or field-service tool just the way you want it, tailored to your specific operations and challenges. You don’t need to know coding or possess any software engineering skills – Dalton Mills’s AI system will handle that.

We currently cover 36 trades so, if you want to test our system, apply for early access on our official website today.

FAQ

How high should I make my call fee? 

How high your call fee should be depends on the type and business model you’re running, as well as variables such as your costs and local market prices. For HVAC, for instance, the average is between $89 and $175.

You can check the table at “What Should Service Call Fees Cover and What to Charge?” for more services.

Should I skip the call fee to win more clients?

You can ignore the call fee if you’re a brand new business and plan to use the no-call-fee strategy to increase your clientele. But, long-term, that’s not a wise strategy. Every visit burns through travel expenses and treating diagnostics work as non-billable time will just eat into your profits.

Clients keep refusing service because of my call fee – What do I do?

If clients keep refusing your services because of your call fee, there’s not much you can do, if your call fee is actually justified. The best thing you can do is be transparent about what the call fee entails and what it covers.

That helps clients understand its necessity and realize it’s not arbitrary, designed merely to “rip them off”.

Should I charge clients different call fees?

You should, but only if it’s justified. If jobs have variables like different travel distances and different diagnostics work time, having different call fees for each is justified. Other than that, you should apply the same fee to similar jobs.

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