Should Diagnostic Fee Only Count Toward Average Ticket?

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“Should Diagnostic Fee Only Count Toward Average Ticket?”

Contractor University Expert Response:

“The answer is yes. It is okay to exclude Diagnostic Fee Only (DFO) calls from your average service ticket calculation, but only when those calls result in a turnover or flip to a salesperson.

The key distinction is whether the DFO call creates a sales opportunity. If the call flips to a salesperson, it should be measured as part of your sales turnover process instead of being included in the average service ticket calculation. That flip closing KPI should be around 70%, as discussed.

However, if a DFO call does not result in a flip, it should stay in the service call profit center and be included in your average service ticket calculation. Leaving those calls in gives you a true picture of your service department’s performance and prevents the numbers from being artificially adjusted.

As far as an average ticket goal of $450, that can be a good target depending on your market, as long as it meets the X5 service tech W2 wage test.

The X5 test works like this: if you pay a technician $250 in burdened wages for the day, that technician’s daily production target should be $250 x 5, or $1,250. If your average ticket is $450 and the technician runs four calls in a day, they should exceed that production goal every day.

That is the kind of service technician who is helping the department perform profitably.

The reality is that more than 50% of HVAC contractors have a hard time meeting that X5 production threshold. That is why it is so important to track these numbers correctly. Exclude DFO calls only when they turn over to sales, but include DFO calls that do not flip so your average ticket still reflects the true performance of your service calls.”

Contractor University members can click here to log in to their member dashboard and submit a question through the Ask the Expert portal.

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