Rate Comfort

I am just winding down from a short winter, and since it was about six weeks shorter than normal, I am not feeling like the checking account is a flush as it might be. If global warming is here to stay then my "normal" winter revenue cycle is probably going to be permanently shortened. So, to make the same money in fewer weeks I really need to raise my cost per call.

I have used a $75 minimum charge since I started in business. I used to break my rule when I had a string of pullouts on the interstate, but dropped that a couple of years ago (it's just too dangerous out there to discount). I'd like to nudge my prices up some, but in the last 3-4 years the only charge I have changed has been my milage rate, by just 50 cents. So, I know my rate chart by heart. I rarely make a mistake and short change myself. The numbers rattle out quickly and professionally, no "ummm, let me find a calculator". It's comfortable.

When I started in the towing business I purposely set my rate higher than the guy already running here in town. I didn't want to undercut him and honestly, I didn't want a heavy work load since I was winding down something else that was flexible but still took a fair amount of my time. Now the other guy is towing very little and I am the "go to" guy for tow calls around here. People know my rates, which are now equal or less than the other guy's, and it's pretty, well, comfortable.

Comfortable customers, comfortable operator... static tow prices. The only problem is that means I am now netting less per call than I was a year ago (or worse, than three years ago). And if I have to pay for my four wheel drive wrecker with three months of work vs. five months or winter, that's a higher caost per call. Since I am now the "go-to" guy, I am making it up on volume (like the triple A motto, LOL) , but that can only go so far.

My point is, when your rates get comfortable, maybe it's time to start looking around and make sure your not missing some of the picture, or some of the profits. If you don't, sooner or later inflation is going to creep up on you and you are going to have to make a sharp adjustment in rates, which will really confuse (or more probably alienate) your customers.