Pricing Strategy & Margin Analysis
Purpose
Defines how Spartan sets and maintains pricing — the flat rate philosophy, Good/Better/Best structure, minimum margin targets, and how pricing decisions protect profitability. ## Who This Applies To
Josh (owner), coaches, and any tech or sales person presenting pricing to customers. ## Pricing Philosophy
Spartan uses flat rate pricing — customers are quoted a fixed price for a defined scope of work, not an hourly rate. This protects customers from runaway cost and protects Spartan's margins when jobs take longer than expected. All pricing is built to cover:
- Materials cost
- Labor
- Overhead (vehicles, insurance, technology, facility)
- Desired net profit margin
Slack insight: When a customer objects to price, the explanation is: costs associated with labor, materials, and overhead justify the price. Techs are coached to explain value, not apologize for the price. ## Minimum Revenue Targets
| Metric | Target |
|---|---|
| Revenue Per Lead (RPL) | $5,000+ |
| Minimum revenue per job hour | $950/hour |
| Gross Blend Average (GBA) | $1,500+ per job |
A job that cannot yield $950/hour in revenue should not be accepted without manager approval. ## Good/Better/Best Pricing Structure
Every service call should result in a 3-option presentation:
- Good — minimum viable fix (addresses immediate issue)
- Better — resolves underlying cause (recommended)
- Best — comprehensive solution (full value option)
Techs are expected to build 3-5 options per call. (Slack: "Technicians are instructed to build 3-5 options for the customer. ")
Call before presenting (Slack policy): Techs are instructed to contact their manager before presenting options to the customer — this allows for strategic guidance and alignment with company sales goals. ## Discounting Rules
- Standard discount for scheduling-related customer dissatisfaction: 10%
- Demands above 10% require manager (Josh) approval
- No tech or salesperson can offer more than 10% without authorization
- No cash prices — ever (Slack: tax implications + inability to cover equipment costs)
- Deposits: 40% non-refundable before job start (install/estimate jobs)
## Pricing Updates
When Josh updates the price book:
1. Josh updates pricing in ServiceTitan. 2. Office notifies all field staff: "Sync changes and download the updated price book in ServiceTitan before heading to your next job. "
3. Techs sync ServiceTitan app on their device immediately. 4. Any tech using an outdated price book is quoting wrong — create a compliance issue. Slack warning: When the deposit policy changed from 20% to 40%, techs who had not synced ServiceTitan were still showing 20% terms to customers. This created confusion and disputes. Price book updates must be treated as urgent. ## Margin Analysis — When to Revisit Pricing
Review and potentially update pricing when:
- Material costs increase significantly (review with the Production Concierge at Tradeshift/Lee Supply annually)
- RPL trends below $5,000 for more than 4 consecutive weeks
- GBA drops below $1,500 for more than 4 consecutive weeks
- A new service line is added (needs its own pricing model)
## Important Notes
- The price is the price. Spartan does not negotiate on routine service work. - Large install projects may have negotiated scope — but the price per scope unit does not change. - Never leave a customer with one option. Multiple options increase average ticket and customer satisfaction simultaneously. ## Related SOPs
- Revenue Targets & KPI Dashboard Guide — KPI benchmarks
- Good/Better/Best Guide — how to present pricing in the field
- Complaint Handling & Resolution — price objection response