Author Topic: Is this a good deal? (Business "Clubs" and math confusion)  (Read 803 times)

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jpcher

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Is this a good deal? (Business "Clubs" and math confusion)
« on: April 05, 2013, 06:09:02 PM »
I had to call in a plumber today. It seems like the flat rate for a plumber to even lift a tool in your home is around $300. (I've had experience with this.)

This is the first time I've used this company and I was very pleased with the Plumber. He was personable and polite, gave options, showed me the (very nicely printed) price-list book and even told me that one of the jobs I was asking about would be so much cheaper if I did it myself ("don't tell my boss I said that.")

Then he asked if I would be interested in becoming a company club member for the mere cost of $200/year.

In the price-list catalog, all of the options he showed me had a "standard price list" and a "club member price list." The club member price was $100 cheaper for all of the options.

Plumber went on to explain that one of the benefits of being a club member* is that they offer free AC/Heat inspection and cleaning for all of their club members.



Math confusion: I paid $400 for a $300 job -- Since I signed up for the membership, the cost of my plumbing was only $200 instead of $300 (so there's a savings of $100) plus I'll receive a "free" AC/Heat inspection and cleaning.

For reference: I had a new furnace installed last year. That company keeps bugging me about signing up for the same type of service that Plumber was offering for $90/year. That doesn't include my AC.


Okay, not "free" but I'm only paying $50 for each service, right? Since I've saved $100 from today's plumbing bill?


I just can't seem to wrap my mind around this.


I have 3 days to cancel the club membership. But then I'll owe them $100 for today's service (because they gave me a membership discount.)


Is this a good deal or was I rooked?



Opening this thread to all for general conversation:

Are you members of any type of business clubs? Do you find substantial savings by being a member? Or have you ever signed up for a business club and felt that you were rooked?













*This company does plumbing, heating, AC, and electrical. Club membership includes a discount on all services.
« Last Edit: April 05, 2013, 06:47:47 PM by jpcher »

Knitterly

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Re: Is this a good deal? (Business "Clubs" and math confusion)
« Reply #1 on: April 05, 2013, 06:33:17 PM »
What is the cost of the AC/Heat inspection normally?

Do you expect to need a plumber at least once a year?

In the many years I've lived in my home, I have only needed the services of a plumber once, and that was to install the rough-in for a bar sink during some renovations.

If you don't anticipate needing the plumber very often, it's probably not a great deal.

oogyda

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Re: Is this a good deal? (Business "Clubs" and math confusion)
« Reply #2 on: April 05, 2013, 06:36:30 PM »


Never mind. I just reread your post and see that the membership is $200.

This is only a good deal if you have a lot of problems that would make up the extra $110 you're paying for membership.
« Last Edit: April 05, 2013, 06:42:32 PM by oogyda »
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LazyDaisy

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Re: Is this a good deal? (Business "Clubs" and math confusion)
« Reply #3 on: April 05, 2013, 06:48:50 PM »
I would read very carefully what the yearly AC/Heat "cleaning" entails. If it's just vacuuming out your vents, and looking inside the ductwork with a flashlight, you're better off doing it yourself once a year.

Also POD Knitterly. If you don't need a plumber at least 1 more time this year, and at least 2 times every year, then it's not a good deal.

Cost without Membership                      Cost without Membership
1 time plumbing job $300.00                 Plumbing job #1 $300.00
                                                            Plumbing job #2 $300.00 = $600

Cost with Membership                           Cost with Membership
1 time plumbing job $200                      Plumbing job #1 $200
annual membership fee $200                 Plumbing job #2 $200
= $400                                                  annual membership fee $200  = $600
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Slartibartfast

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Re: Is this a good deal? (Business "Clubs" and math confusion)
« Reply #4 on: April 05, 2013, 07:42:28 PM »
Also keep in mind you'd be effectively locked in with this company, even if they send out someone who doesn't do a good job or they can't make it to your house until next Thursday or their prices turn out to be higher than a new competitor.  It's also possible that their "free" services are really just chances for them to tell you how much you really need to pay them to do X, Y, and Z.  If I were you I'd cancel and put that $200/year towards a "next time I need a plumber" fund.

jpcher

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Re: Is this a good deal? (Business "Clubs" and math confusion)
« Reply #5 on: April 06, 2013, 03:24:13 PM »
Thank you for your responses.

My thinking was that the company that installed my new furnace asked for $90/year for inspection/cleaning, the same service that the plumbing company offered.

My central AC has never been inspected nor cleaned and it's close to 20 years old. But since it's still in good working order, why would I have to have it inspected?

So I was thinking for this one year only, since I already was discounted $100 on the plumbing service, I'll only pay $50 for each the furnace and AC inspection instead of $90 for furnace alone and then would have to pay for an additional cost for AC inspection/cleaning.



But the math still doesn't figure.

$300 plumbing job.

+$200 for "free" AC & Heat service and other discounts (joining the club) = $500

Minus $100 discount on the plumbing job = $400.

So, in actuality, I paid $100 for each AC and Heat service. Along with possible discounts for anything else that I might use this company for.


Where did plumber come up with only $50 for AC and Heat service?



I'm so confused, but I will cancel the club membership.

Thanks! ;D

Virg

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Re: Is this a good deal? (Business "Clubs" and math confusion)
« Reply #6 on: April 09, 2013, 04:26:27 PM »
jpcher wrote:

"But the math still doesn't figure.

$300 plumbing job.

+$200 for "free" AC & Heat service and other discounts (joining the club) = $500
Minus $100 discount on the plumbing job = $400.
So, in actuality, I paid $100 for each AC and Heat service. Along with possible discounts for anything else that I might use this company for.
Where did plumber come up with only $50 for AC and Heat service?"

The total cost for total work is easy to consider.  Without the club, you pay $300 for one plumbing service.  With the club, you pay $400 for one plumbing service, one heat inspection and one A/C inspection.  So in the plumber's description, for $100 more you get two inspections.  You're considering the heat and A/C inspections to be one item for $100 so it's just a difference in terminology.

As to whether it's a good deal, that depends on how often you use their services.  Not counting the inspections, you'd have to save the cost of the membership every year in discounts, and based on what actually happened that would mean you'd have to need basic plumber's services twice in a year to break even.  Keep in mind that services that cost more than the basic visit fee would make it more likely to be worth it, and since their club includes heating, A/C and electrical work, the club would save you on those services too.  That said, if you don't have a serviceperson doing something on those things twice a year, it's probably not a big bargain, and since your furnace is brand new it's even less likely to be a benefit.  But one other thing to consider is that (assuming services are on a sliding discount) it'll work a bit like an insurance policy, so if your A/C goes and needs major repairs you might save more than your membership fee (or even several years of membership fees) in one shot.  You'll have to examine the paperwork to see if that's the case.

Only you will know for sure how often you need professional help with these things, but a quick calculation is to consider if you need service of this kind twice a year or more.  If you usually do, stay signed up.  If not, cancel.

Virg