How To Set Up Dynamic Pricing & Automate Your Pricebook

What's going on, everybody? It's Richard Kohberger here, the Blue Cloud nerd. And in this video, I'm going to be going over the game changing new feature dynamic pricing. And I don't use that phrase lightly. Quality of life enhancements happen a lot and they're awesome and they're important. But I don't say game changing unless it is truly a game changer. And this is because dynamic pricing automates the updating of your prices in your price book. And you probably don't need me to tell you that outdated pricing and it's bad for business, it's bad for profitability. Now, before dynamic pricing, updating your price book prices in Service Titan wasn't a completely manual process. We have the Pricing Wizard. But that tool had some drawbacks. The two biggest ones being one, it's not automated. You had to go in and run the wizard every time you wanted to update your pricing with your new material costs or your new labor costs or whatever. And it also just wasn't particularly flexible. There wasn't a whole lot you could do with it and it didn't remember your settings. So every time you went to run the Price Book wizard, you would have to remember what, what formula you wanted to feed it. But dynamic pricing changes all that and it makes sure that you are charging the correct price 100% of the time. So let's jump in and let me show you how it works. So first of all, in Service Titan, we're going to come to the Price Book tab. And here on the left hand navigation menu you'll have this new option called Pricing Builder. Now you'll notice that price setup is still here. That's what takes you to the old Pricing Wizard. But over here we have Pricing Builder and under there you'll notice we have two separate sub tabs. So we have Client Specific Pricing and Dynamic pricing. This video is focused on dynamic pricing, but I do have a separate video as well on client specific pricing. And I'll put a link to that in the description down below. Client specific pricing is what it sounds like. It allows you to set pricing that is specific to particular clients of yours. Two main areas where client specific pricing is useful. One would be if you are a commercial company who has negotiated pricing with certain clients. Maybe you work with somebody, for example, who owns multiple like Starbucks chains around your area. And because they have multiple locations and it's a good account for you, you have negotiated pricing with them. Then Client specific pricing is perfect for a situation like that. It's also Great if you're a company that bills based on time and materials. Because with client specific pricing, you can set up formulas based on the actual labor time that the technician spent on that particular job. Whereas dynamic pricing, the rules are going to be based on sold hours, which is a little bit different. So if any of that sounds interesting to you, then check out the other video on client specific pricing. But finish this video first because client specific pricing is going to make a lot more sense after you already understand dynamic pricing. They're very similar. But anyways, back to the topic of this video. We're going to click over into the dynamic pricing tab and then we're going to click this Create rule button. Or we could also go from up here. Okay. And that takes us into this screen, which is going to walk us through setting up our first rule. So the first thing we need to do is choose which categories in our price book this rule is going to apply to. So I'm going to make this like an H Vac service pricing rule. So I'm just going to check off this H vac section. Now, in practice, you would probably want to get a little bit more granular than that. For example, with H vac you probably wouldn't want to price things like filters or thermostats exactly the same way that you would price things, things like capacitors or contactors. There just tend to be certain services that can tolerate higher markups than others. And so you do want to account for that. But for this example, we're staying pretty high level. So we're going to hit continue here. Okay. And then we're going to enter in our billable rate. So this is the rate that we're going to charge per sold hour that's assigned to the task. Now we're building flat rate pricing here. So we're building based off of sold hour, not actual hour. Sold hour is a number that you assign to a particular price book task. It is the amount of time that you expect that task to take in general. And we have two options here. We can either put in a flat rate to charge per billable hour, or we can click this button to use progressive rates, which means we can charge a different amount per billable hour depending on how many sold hours there are. So for example, we can say that between zero and two sold hours, we're going to charge $250 per sold hour. But then from two hours and up, so I'm just going to put 9, 9, 9, 9, 9. Then we're only going to charge 200, for example. I'm just putting in some random numbers here. Your pricing should of course be based on your own individual company's breakeven and desired profit margin. And if you need some help figuring those things out, we have some great articles in the contractor playbook that can help you with that. And I will put a link to that in the description down below as well. Okay, so moving on. Now we're going to hit continue. And here we're able to set our markup rules for our materials and or equipment. So in the servicetitan price book you have services which are usually what you're selling if you have flat rate pricing. But then you can tie materials and equipment to those services. So those are the actual parts and or pieces of equipment that go into completing that service. And here is where we're going to set up our rules for how we want those marked up. Now you'll notice that we have different options for how we want to mark these materials up. So we can do it by gross margin, we can do it by percent markup, we can do it by a flat dollar amount markup, or we can do it by a multiplier. And if you need some help understanding the difference between these types of markups, you can hover over this gray eye right here and it will define all of that for you. So for this example, I'm going to go with percent markup, which is pretty common for service type pricing. And I'm also going to build this out with progressive rates. Okay. So there is my table built out. So you can see that the more expensive the material gets, the less I mark it up. And again, these, these are random numbers. You shouldn't copy them. I made them up. Okay. Now we also have the option to set a separate rule for equipment that is tied to our services, or we can toggle the switch to just use the same rule as materials. So because for my example here I'm setting up a service based rule, I'm not anticipating that I'm going to have much equipment tied to my tasks in this category. It's mostly going to be materials. So for this example, it doesn't much matter. I'm just going to toggle the switch to use the same rule as the materials. Okay. And then I am going to hit continue. Okay, now we have the option to apply a surcharge. A surcharge is just a amount, a flat amount or a percentage that we apply on top of our base rule. And it's completely optional. For this example, I'm not going to use one. So I'm just going to hit continue. And now we're on the last page. It says we've set up dynamic pricing. It kind of shows us an overview here of what we just set up. And now if we keep scrolling down here, we get the option to add on modifiers. So we can have our rule that we just set up automatically modify itself based on different variables. So if the technician selects that this item is an add on, we can have the price automatically change. If this is an after hours job, we can have the price automatically change. And we're also able to offer our technician different pricing levels. For example, we can have our basic price, but then we can have a second price for if the job is a little weird and we're going to have to do some extra work and then a third price after that for when we're really going to have to do a ton of extra work. That way we're able to offer our technicians the freedom to adjust the price based on the situation at hand without just giving them complete control to change the pricing to whatever they want. Not that there's any problems that could arise from that. So let's set up some modifiers here. Let's add an add on rule. So we're able to discount a flat amount, we're able to discount by a percentage. And we're even able to adjust just our labor hours when it's an add on service. Because really that's why we have add on pricing anyways. It's because we're already there. It's taking us less time and less gas and all of that. And so it makes sense to offer somewhat of a discount to help incentivize doing more work while we're already there. And again, you're able to set up a progressive rate with this as well. I think that's a really good option. But for the sake of simplicity and time, I'm just going to do a flat percentage based discount and we'll call it 3%. All right, now let's set up an after hours rule. Okay, so here's where we set up when it's triggered. So if the scheduled start time is from 6pm to 6am, then we're going to add either a flat dollar amount or a percentage based charge. Now this phrase right here is important. This is going to be triggered by the job's scheduled start time. So that means that if I leave this time alone, if a job's start time was scheduled for 5pm, but we ran late us the company ran late and the technician didn't get there until 6:05, that customer wouldn't get charged this fee because it's going by scheduled start time. And that customer's job was scheduled to start at 5. It's not their fault that you ran late. But do keep that in mind. I know some companies, when a technician is running late, they like to actually drag that job on the dispatch board lately. Later, if you do that, then you're actually changing the start time of the job. And then that customer is going to get this fee. So just keep that in mind. All right? And again, we're able to do this by flat dollar amount or percentage. We'll call this 8%. These are random numbers. Please don't copy these numbers. Hey. Okay, we're going to save that. And finally, we're going to add some price levels. So we're able to add additional costs again by flat dollar amount or by percentage. Now, level one, that's always just your base rule, the rule that you just set up. So it's always going to be price added zero. And you can' that because you wouldn't want to change that because if you're changing level one, then you're basically just changing the base rule. So you might as well just go change the base rule. Okay, but then let's say for level two, we're going to add 10%. And then level three, if things are getting really difficult, we're going to add 25% and we could keep going if we wanted to and add more levels. But for this example, I'm just going to leave it at three, and then I'm going to hit save. So now I've set up all of my modifiers. Now you don't have to set up the modifiers. You could set up just one of the modifiers. You can set up none of the modifiers, but I think the modifiers are pretty cool. One note. I know that after hours here, it only lets you set up a time, and some people are going to want to charge after hours based on, like, weekends. That's not here yet, but that is coming as well as charging based on, like, holidays, like holiday fees. That's coming as well. Or maybe it's already here. I don't know. When you're watching this video, I'm not a time traveler. Or am I? Okay, now, before we finish this out, we also have this preview button here. And if we click that, we're able to kind of play with what we just set up and make sure that it's all looking correct. So I can choose a service here, like here. Here's replace zone damper motor. And then it's going to show us the price that it's coming to and exactly how that price is being calculated. So this service has 0.5 labor hours assigned to it and 0.5 times 250. That's giving us 125. And then it's adding in our material markup formula. So the material here is $93.04 times one plus 100%. That's giving us $186.08 of additional cost, which is giving us this total price. We can also play with our modifiers here so we can say this is an add on service and see how that would affect the price if this customer was a member. We can play with our pricing levels. So level two would do that and level three would do that. And we could also say that this job started at 7pm to see what our after hours fee would do. So that's really cool. It just gives you the opportunity to play with it and make sure that you're happy with how everything's looking. And once I am happy with it, I'm just going to hit continue. I'm going to name my rule. This is the H Vac service rule. I can give it a description if I want, that part is optional. And then I'm going to hit finish. And that's it. There's my brand new shiny H Vac service rule. So now anytime anybody, be it a technician in the field or somebody selling an estimate from the office, when they go to create that estimate or invoice and they go to select a service, as soon as the service is pulled up for them to look at, the price is going to be calculated right then. And so they're always going to see the up to date price. Meaning if your material prices go up, which sometimes they do, that all of your prices in your price book are just going to keep following this formula. So there's nothing you have to do. Your prices are always going to be correct. Same thing if you were to go into a service and update the labor hours, you don't have to then go and update the price. It's just going to follow the formula. Now let's go into our price book and like kind of look at what this all looks like here. So let's filter down to the category that I chose to set all that up for. So you'll notice here now that there are two different pricing columns. The dynamic price that's what's being dynamically calculated and the static price. So the static price is what we understood as price before, just the old price that you'd have to go in and manually change somehow, either by changing it from here or through the price book Wizard. You'll notice that that's grayed out because that's not what we're using. We're using the dynamic price. But if, for example, there were one or two particular tasks within this category that you made a dynamic price for that you actually didn't want to apply the dynamic price to those. You wanted to use the static price and just keep updating it manually. Well, you can do that. Let's say, install access to our plenum here, make sure we're in edit mode here, and then we could add this column, use static price, and that gives us this column here. And we would simply just check that off and boom. Now dynamic price is grayed out and you see that we're using the static price instead. And remember, of course, that you're able to do bulk editing from here. So we can check off multiple things and change them all at once. If you're not familiar with the bulk editing price book features in Service Titan, I've got a separate video on that. I'll put a link to it in the description down below. Let's see what else. Oh yeah, one more thing. I'm going to go back into the pricing builder here and back to dynamic pricing. You'll notice there's this settings button up here, and as I record this video, there's only one option under that, and that is whether we want to apply our dynamic pricing to sub items that are added to a service. So item grouping is a feature that is currently gated as I record this video, meaning you have to ask somebody at serviceitan to turn that feature on for you. But it allows you to nest sub items under a parent item on estimates and invoices, and then all of these sub items roll up into that parent item. It's great for like selling packages where you just want to show the price of the one package versus breaking out all of the tasks that are contained inside of that package. And this setting right here controls whether or not we want to apply our dynamic pricing to the sub items, the child items added underneath that parent item. Okay, so at this point you might be thinking, you know, all this is great, but it still depends on my costs, my material and equipment costs that I pay to buy the stuff. It still depends on that being accurate and that I still have to do manually, right? Well, kind of. But if you're placing your purchase orders through Service Titan, then we also have a feature that allows you to update all of your pricing as you receive those orders. So if your vendor charged you a new price, then you can just have that price automatically update just as part of your normal receiving process. So if you use that feature in combination with this, your price book's automated. And lucky for you, I also have a video on that feature. Of course. Link in the description down below as well as on the end screen that you're about to see. Anyways, that's all I got for today. Be sure to hit like if you liked the video and found it valuable, be sure to subscribe to Surfaceitant's YouTube channel if you haven't done that already. If you hit that bell icon so that YouTube notifies you anytime we upload a new video. And leave me a comment down below and let me know what you're going to do with all your free time now that you don't have to manually update your price book anymore. But keep it clean. Ish, you know, PG 13. Appreciate it. Peace. Sam.