Kevin N. from Mobile. Getting ready to price my very first utility audit engagement and I'm second-guessing myself. It's a manufacturing facility with about $25K monthly electric bills from Alabama Power. Should I go with percentage of savings or flat fee? What did you all charge for your first few clients?
Pricing first engagement - what did you charge?
Kevin, congratulations on landing your first prospect! For a $25K monthly account, you're looking at $300K annually which is a substantial audit opportunity. I strongly recommend percentage-based pricing for your first several clients - typically 50% of first-year savings. This aligns your interests with the client's and removes their financial risk. A flat fee requires them to trust your expertise before seeing results. With percentage pricing, you only get paid when they save money. For Alabama Power commercial accounts, look carefully at their Rate Schedule LPL vs Rate Schedule D tariffs - manufacturing facilities are often misclassified.
Carol T. here. Randy's advice is spot on. My first three clients were all percentage deals at 50% of first year savings. Built credibility and cash flow simultaneously. One thing to watch with Alabama Power - they have some unique demand ratchet provisions that other utilities don't use. Make sure you understand their summer vs winter demand billing cycles.
Ruben E. from Albuquerque. I did my first five audits at 40% just to build testimonials and case studies. Lower percentage but easier to close, and the experience was worth more than the extra commission. Now I'm at 50% standard rate. Don't undersell yourself too much, but getting started is more important than maximizing every deal.
Marc H. in Bakersfield. One pricing tip - always quote percentage of total recoveries, not just ongoing savings. You might find billing errors, rate optimization opportunities, and refund opportunities. I use "50% of all verified savings and recoveries" in my contracts. Covers historical refunds plus ongoing monthly savings.
Chris D. in Memphis. Kevin, make sure your contract specifies the measurement period clearly. I use "50% of first 12 months of verified savings as measured against the average monthly cost for the 12 months prior to implementation." Removes any ambiguity about the baseline calculation.
Margaret C. from Indianapolis. Also consider offering a satisfaction guarantee for your first few clients. Something like "If we don't find at least $5,000 in annual savings opportunities, our services are complimentary." Shows confidence and removes their perceived risk. I used this approach for my first eight clients.
This is incredibly helpful everyone! I'm going with the 50% of first year savings approach with a $2,500 minimum guarantee clause. Randy, I'll definitely check those Alabama Power rate schedules you mentioned. Feeling much more confident about this pricing conversation now.