Boost Margins With Dynamic Pricing | TAD Tune-Up Series

Hey there folks. Welcome to another video in our TAD Tune up series. My name is Erica Jeffries, I am a program facilitator here at ServiceTitan and I'm excited to chat with you folks today about dynamic pricing price controls that boost margins in our Titan Advisor which is that rocket ship icon in the top right corner of your screen. Just as a reminder TAD Titan Advisor is a virtual best practice guide. It helps to make sure that your utilizing the most of your Service Titan software and associates points and essentially turns into its own KPI, its own metric about how well you are utilizing Service Titan. We are actually going to be looking at a feature together today and that is the dynamic pricing price controls that boost margins. Before we hop into that too much, just a couple things to know about dynamic pricing in general. Dynamic pricing and as we go through things this will make more sense. But dynamic pricing does not use the price member price or add on price fields in your price books. It does rely on the pricing rules and the actual cost call out is that dynamic pricing can treat materials and equipment added to jobs as sub items the same way that it treats items linked in the price book. And the way to enable that is through some dynamic pricing settings which we are going to go through together. Those are some kind of call outs before we get started. But let's get into this. I will share my screen. Bear with me. Awesome. So here is Service Titan the the modular dashboard. We all know it, we all love it. We are looking to get into Titan Advisor that best practice guide. So that is the rocket ship icon in the top right hand of your screen. To get to this dynamic pricing feature we are going to go to the left under business sections we are going to pop into price book and then into the acceleration tab. In that acceleration tab we then see our feature in this account here. Let's get into it. So we have this nice pop up. It tells us who this feature applies to. Residential, commercial, both service and replacement. It also gives us this about kind of summary. So unlock the power of dynamic pricing. Automate flat rate calculations using billable hours, materials and equipment costs from your PriceBook services. Tailor your rates for after hour jobs. Add ons and membership discounts to maximize your efficiency and profitability. Dynamic pricing is not to be confused with client specific pricing. That's more when we're talking about rate sheets that we then apply to specific clients. Dynamic pricing is for flat rate calculations and these are rules that we create that then apply to different categories inside of our price book. So we have our nice Video here that's kind of showing us how dynamic pricing looks once we do get these rules set up. So that is a nice video to look at. Talk about this, what to set up. Step here. So we do need to create one dynamic pricing rule. How do we do that? We're going to go into our price book, we're going to go into Pricing Builder and then we're going to create a rule. We will go through this together. Blue Collar Nerd also does a really great, very nuanced, pretty granular video on this as well. So I will link that down below in the description in case you're looking for some really step by step. He has lovely videos as we all know. So what is our setup piece? We're going to get one of these rules made. Awesome. We'll do that as a team. Then how to use, how are we getting these points? So use dynamic pricing services on invoice. What we are measuring is the percent of completed jobs in the last 30 days that have items with services calculated using dynamic pricing. If it's over 30% of jobs, you're getting one point. If it's over 85%, you're getting two points. Alrighty, let's pop into our service tighten price book because that is where we are going to set up our dynamic pricing rule. So you probably just saw me duplicate my tab there. The only reason I do that is because when we're working in tad, it's nice to kind of have them both up so you can flip back and forth. So I am going to go into the price book and I'm going to go into Pricing Builder. You'll see here that there's two tabs, there's the client specific pricing and then dynamic pricing. Just as a reminder, again, client specific pricing is essentially creating rate sheets and assigning it to to customers. Whereas dynamic pricing are those rules that we're talking about today. Blue Collar Nerd also has a video on the client specific pricing and I'll link that down below as well in case that's of interest. I'm going to click on this tab here, Dynamic Pricing and we'll see that. I do have a couple rules created already, but we'll go through creating one together as well. So if you have no rules in here, you'll see a button right in the middle that says Create Rule. Absolutely fine to use that. Alternatively, you are able to click this Create Rule button and you have client specific pricing or dynamic pricing. I had mentioned at the beginning of the video as well about some settings. Inside of dynamic pricing that can be accessed right here. Right now the only setting that we have for this is apply dynamic pricing to sub items added to a service. But there will be additional settings coming and that's where you'll be able to find that. So I'm going to hit save here, create rule and then go into dynamic pricing. So as we know dynamic pricing, the rules are going to be associated with specific categories. So in this case I am in a demo account that has lots of different things in it. It is going to look different than than your account. So for example, we could say, you know, we want a dynamic pricing rule for anything that's on our, you know, garage door in in this example. But it could be H Vac service or install or plumbing whatever category you want it to apply to in your price book. Going to click on. Continue. Our second step here is what is your billable rate? So Service Titan uses your billable rate and sold hours for services to calculate your service. As we know dynamic pricing, the rules are going to be associated with specific categories. So in this case I am in a demo account that has lots of different things in it. It is going to look different than your. So for example we could say, you know, we want a dynamic pricing rule for anything that's on our, you know, garage door in in this example. But it could be H Vac service or install or plumbing whatever category you want it to apply to in your price book. Going to click on. Continue. Our second step here is what is your billable rate? So service Titan uses your billable rate and sold hours for services to calculate your service. So here we see inside of that category that we selected, garage doors. These are the subcategories. Then we have here our billable rate. So we have the option to just put one billable rate in here saying, you know, regardless of how much time spent, the billable rate is always the same. Alternatively you're able to use progressive rates. I just have some like dummy numbers in here but you know, between the z0 hours and 2 hours our billable rate is $50 between 2 and 5 etc. So again this would look different for everyone. But that is an option inside of these dynamic pricing rules. I'm going to go back to single billable rate just for the sake of this example. Going to hit Continue. Our third step here is talking about markups. So it's asking how do we want to mark up our materials and equipment. You are able to create separate price markups for your materials and for your equipment or you can use the same rule for both. The first thing that it's asking is select the markup type that will be calculated in the service price. So either individual, select individual to markup items according to the table below or aggregate select aggregate to add all material costs before for applying the markup on the sum. So it's basically just saying are you looking at those materials individually and marking up based on what their individual prices are in reference to this table below, or are you taking all of the materials, adding them, getting the total and then applying the markup based on that total? So we have our materials and what markups we want for that. If you use the hover to discover which exists all over service Titan and in TAD gives you some additional information as well. And in this case it's talking about the different ways that we can do our markup. So we can either do it by gross margin percentage, dollar markups or by multipliers. So in this point I'm just going to put crazy numbers, keeping in mind that obviously everyone's is going to look a little bit different and probably make a lot more sense than what I have written in here. So once you get your your markup set up inside of materials, you're able to make the choice between do I want my equipment to use the same rules or is equipment markups going to look a little bit different in this case? Again, I'm going to toggle it on just to be the same. But there is that functionality As I scroll down. We also have configurable services price rule and this is asking to select the calculation that will be reflected in price. So are we going to be using the generic cost? So that just means that the service price doesn't change and it would stay consistent across all the jobs or are you looking to do an exact cost variation which means you're recalculating the service price and then use the cost of the selected variation so that your your margin, you can protect your margins essentially. Right. Everyone does it differently. We see a lot of exact cost variation. Going to click continue. Then it's asking if we want to include a surcharge so you can add a flat amount or percent surcharge to your base rule. This is an optional step. I'm going to skip it in this case. Then we have our next step. This is an optional step and it is about adding adjustments based on business unit. What this is setting up so if you were to create a rule in here is it would override the default billable rate for specific business Units. If you were to click on the plus button, you are able to create that rule here. In this case I'm not going to create one, but it is an option I'm going to click. Continue. We have our success. That says you've set up dynamic pricing so your basic rules are now all set. But if we scroll down a little bit here, we see that there's also modifications to this rule. So what this is setting up and there's four different kind of pieces to this is that if something is an add on we can, we can change that. So saying okay, sure, this is the pricing of it. This is the basic pricing rule. However, if this is an add on service, then this is what we're going to be using instead after hours. So right now you are able to use a combination of if statements in here. That basically makes it so that if anything is outside your regular working hours, weekends, that sort of thing, you're able to to add those after hours in there price level. So this is for cases where say your tech goes out and the work is a little bit more complicated or a little bit more intensive than than what is typical. You're able to set up modifi modifiers on those price levels. Then finally we have rounding as an option as well. I like this one a lot. It just makes it so that our invoices and estimates are super clean and we're not looking at at cents. We're able to round to different amounts. So whether it be the nearest dollar, the nearest $10 or the nearest hundred and you can either round up or round down folks usually round up, but it's up to you. I am going to delete all of these rules or modifiers rather on the rule and I'm going to click continue. It's going to ask for a title. So we're going to say test for Tad Tune up. That's us. And then I'm going to click on finish. So we now have this dynamic pricing rule in our dynamic pricing list. That is how we set up a dynamic pricing rule in our price book. Like I said, it is a very nuanced process. Every rule is going to look a little bit different for every business. So I will link the blue collar nerd video in the description and we're also going to include some knowledge articles about dynamic pricing. Once we have a dynamic pricing rule set up, then we're looking at those points. So like I said before, if over 30% of completed jobs in the last 30 days have items with service calculated using dynamic pricing then we're looking at one point. And if it's over 85% of completed jobs in the last 30 days, then we're looking at two points. Thank you so much for joining me today. I appreciate your time and see you for the next one.