Dynamic PricingLast updated on 01/16/2023
Dynamic Pricing lets you set pricing for flat-rate services based on multiple factors such as after hours jobs, add-ons, membership discounts, and more. Dynamic Pricing uses industry best practices to calculate prices so you can optimize margins across multiple trades for every situation.
Set rules based on billable rates, markups, surcharges, and custom modifiers
Supports progressive billable rates and markups
Set markups by gross margin, flat and percentage markups, or by a multiplier
Set discounts and surcharges based on multiple factors such as price level, after hours services, or add-on items
Create exceptions from Dynamic Pricing for specific services
Simplified membership discounts
Manually revert to static pricing on an estimate or invoice
Things to know
The price fields set for a service item in your pricebook are not used in Dynamic Pricing calculations. Fields include:
Add On Price
Member Add On Price
Use pricing rule modifiers to set add-on prices.
Discounts set on membership types are used to calculate member prices.
Dynamic Pricing can treat material and equipment added as sub-items, the same as linked material and equipment. Technicians can add materials specific to a job and have an accurate price. There is a setting within the price builder that needs to be enabled for this to happen.
To navigate through the setup pages of Dynamic Pricing from the setup summary, hover over what you want to change then select the Edit pencil icon to go to that screen.
How it works
Costs and billable hours
Dynamic Pricing uses these fields from your pricebook services in its calculations:
Billable hours: Estimated number of technician hours to complete a service, also known as sold hours
Material costs: Cost of materials that are used to complete the service
Equipment costs: Cost of equipment included in an install service
You can apply pricing rules to specific pricebook categories or sub-categories. Costs and billable hours are used to dynamically calculate prices based on these values and conditions you set in your pricing rules:
Billable rates: Per hour labor costs
Material markups: Flat amount or percentage applied to the cost of materials
Equipment markups: Flat amount or percentage applied to the cost of equipment
Surcharges: Flat amount or percentage applied to the service item price used to set discounts or surcharges
The general calculation of dynamic pricing is as follows:
(Billable hours * Billable rate) + (Material costs * Material markups) + (Equipment costs + Equipment markups) + Surcharges
Dynamic Pricing uses settings added to membership types to calculate membership discounts for a service if a customer has an active membership.
Apply Dynamic Pricing
After you set up your pricebook, pricing rules, and membership discounts, Dynamic Pricing automatically sets prices when you add services to an estimate or invoice.
Membership discounts are applied after Dynamic Pricing sets service prices.
Override Dynamic Pricing
After you create a pricing rule, you can test it by comparing the dynamic price of a service to the static price, which is the price based on the standard price as set in your pricebook.
If the dynamic pricing rule is insufficient for a service item, you can exclude it from Dynamic Pricing in the rule modifier settings.
Before you start
For accurate pricing, make sure the services in your pricebook that you want to use Dynamic Pricing with are complete and up-to-date.
Add billable hours to services
Add sold (billable) hours to all your services. Billable hours are multiplied by the billable rate set in a pricing rule to calculate the labor component of a service price.
Configure materials for services
Attach materials that are used to complete the services in your pricebook.
Also, make sure to include the cost of materials when you add materials to your pricebook. The cost of materials attached to a service is used, based on pricing rule markups, to calculate the materials component of a service price.
Configure equipment for services
Attach equipment to all services that install equipment.
Also, make sure to include the equipment price when you add equipment to your pricebook. The standard price of an equipment item is used, based on pricing rule markups, to calculate the equipment component of a service price.
Set membership type discounts
Set member discounts for your membership types. You can create percentage discounts by business unit or by pricebook category or subcategory. These discounts are applied to the dynamically set prices of services added to an estimate or invoice.
Create pricing rules
The Dynamic Pricing rule builder is a five-step process.
1. Set categories
Set which categories you want to apply your pricing rule to. The rule applies to all items within the selected categories and subcategories.
Go to the navigation bar and click Pricebook > Pricing Builder.
Click Create Rule.
Select the categories and subcategories you want the rule to apply to.
When you’re finished, click Continue to set billable rates.
2. Set billable rates
Set the hourly rate for services covered by the pricing rule. This rate is multiplied by billable hours to calculate the labor component of the service price. You can use progressive rates to create a sliding scale. For example, you can decrease the billable rate based on the number of a service’s billable hours.
To set billable rates:
In Billable Rate, set a static rate or use progressive rates:
To use a static rate, under Billable rate, enter the amount to charge per billable hour.
To create a sliding scale, click Use progressive rates.
Enter the upper limit for the first range of billable hours.
Enter the billable rate for that range of hours.
Click + to create another range of billable hours. Tip: For the final range of hours, enter 999 for the upper limit to cover all amounts of billable hours.
When you’re finished, click Continue to set material and equipment markups.
3. Set markups
Set markups for materials and equipment attached to a service covered by a pricing rule. You can set markups based on:
Gross margin: Percentage of the final price that’s profit. For example, if you want 30% of the price of materials to be profit, $100 of materials is priced at $142.86 because 30% of $142.86 is $42.86.
% Markup: Percentage of the item cost that’s added to the item cost
$ Markup: Flat amount that’s added to the item cost
Multiplier: Number multiplied by the item cost. For example, if the multiplier is set at 2, $100 of material costs is priced at $200.
You can also create progressive rates so that as the cost of materials increases, the markup amount decreases. To set markups:
In the Markup step, in the Materials table, select how you want to calculate markups:
In the second $ field, enter the upper limit for the range of material costs then add the markup you want to use.
Click + to create additional ranges of markups. Tip: For the final range of markups, enter $99,999 for the upper limit to include all amounts of material costs.
In the Equipment table:
To use the same markup rates as materials, turn on the Use same rules as Materials toggle.
To create separate markups, follow steps 1 through 3 for equipment attached to services.
When you’re finished, click Continue to add surcharges.
4. Add surcharges
You can add a flat or percentage surcharge to a service item. For example, if you want to include a dispatch fee, you can add it in this step.
To add a surcharge:
In the Surcharge step, click $ to add a flat surcharge or % to add a surcharge based on a percentage of the service price then enter the amount or percentage for the surcharge.
When you’re finished, click Continue to review your price rule and add modifiers.
5. Review your price rule and add modifiers
After setting billable rates, markups, and modifiers, review your billing rule. Click a section to modify the price rule. You can add modifiers to the pricing rule based on different conditions:
Add-on: Add discounts if a service is an add-on to another service on an estimate or invoice. For example, if a service already includes a dispatch fee as a surcharge, you can discount the dispatch fee from the add-on price.
After hours: Use separate calculations for jobs outside of your normal business hours. For example, if you pay technicians a different rate for late-night jobs, you can modify billable rates accordingly.
Price level: Add an additional dollar amount or percentage to the base price for different price levels. For example, suppose the service requires additional work such as moving heavy boxes to get to a furnace. In that case, the technician can choose a higher price level to accommodate for the unexpected additional level of effort.
Static pricing: Create exclusions by using Dynamic Pricing. For example, if the dynamic pricing of a specific service does not calculate prices appropriately, you can exclude it and use the service’s static price fields set in your pricebook.
Create an add-on modifier
Set rules on how to modify pricing when the service is an add-on to another service.
Click Add-On Pricing.
Select how you want to discount the service when it’s an add-on to another service:
To deduct a flat amount from the price:
In the field, enter the amount to deduct from the add-on price.
To deduct a percentage from the price calculation:
In the field, enter the percentage to deduct from the base price.
To modify a service’s billable hours in Dynamic Pricing calculations:
Select clock. A list of billable hour options opens.
In the first field, enter the number of billable hours you want to modify. Note: To be modified, a service’s billable hours must match the amount exactly.
In the field after change to, enter the adjusted number of billable hours. Note: If a service matches the number of billable hours in the first field, this field is used to calculate the service price when the service is an add-on.
Click Add another time to add another entry for billable hours.
3. When you’re finished, click Save.
Create an after hours modifier
Set after-hour pricing for a service.
In the Review & Add Modifiers section, click After Hours.
In If Scheduled Start Time, enter the time your after-hours start and end.
In Then Add Charge, enter the addition to your base price as a percentage or dollar amount.
Select $ to modify the price with a flat amount or % to modify the price by a percentage.
When you’re done, click Save.
Create a price level modifier
Set price levels to quickly modify a base price.
In the Review & Add Modifiers section, click Price Level.
Select $ to modify your base price by a flat amount or % to modify by a percentage.
In the Level 2 field, enter the amount to adjust your base price for that level.
Click + to add price levels.
When you’re done, click Save. You can also click Deactivate to remove price levels.
To test your pricing rules:
Use the Service dropdown to choose a service to test.
Test your dynamic pricing
Select if this is an add-on service
Test your different price levels
Use the time dropdown to adjust the job start time
When you are done, click Close.
When you are finished, click continue to name your rule and add a description then click Finish.
Price breakdown in ServiceTitan
Click the unit price on an invoice to open the price breakdown so you can see how the price was calculated.
Using static prices
If you have an individual service that you don’t want to use Dynamic Pricing you can use a static price that will not adjust in different situations.
Go to the navigation bar and click Pricebook.
In the side menu, click Services.
Click More > View/Edit Service.
Under the Details tab select Use Static Prices.
You can edit Price, Member Price, Add On Price, and Member Add On Price, if necessary.
When you’re done, click Save.
Calculate prices from ServiceTitan Mobile
Dynamic pricing applies to items by default in ServiceTitan Mobile. For example, if an item is added after hours or if the item is an add-on.
Select an item or search for the item you want to add.
On the invoice tap the item to open Edit details.
Select the Quantity.
Select Add-on item, if it is.
Select a Price Level.
When you’re done, tap Save.
Check to be sure dynamic pricing was applied.
Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.