Anode Rods: How To Add $200 To 95% Of Your Service Visits

Behold … the lowly anode rod.

Most water heaters have them and nearly every home in North America has a water heating system of some kind. And you know just like I know, that anode rods are sacrificial – they rust out so that the tank doesn’t. But have you ever considered that anode rods should be checked every time you do a plumbing call? Have you considered that if you send a plumber out to a leaky faucet and he asks the homeowner, “when was the last time someone inspected your anode rod” that the homeowner will likely cock there head to the right and say, “what’s an anode rod?”

Now I know that an anode rod isn’t exactly an expensive thing to stock – you can put ten on each technician’s truck and train your guys/gals to pull the anode rod on every call as a courtesy service to homeowners. Train your team to ask the homeowner about their anode rod and then explain:

a) What it is

b) What it does

c) Why it needs to be checked

d) Is extending the life of your water heater important to you?

I guarantee the homeowner will want you to check it. And when you pull it, they will more often than not see an anode rod that looks disgusting. There is shock value in that. Pay attention to the homeowner’s reaction.  Train your team to say the following:

a) Do you see that?

b) What do you think all this stuff is?

c) What do you think we should do?

The homeowner will tell you to replace it nearly every time. Why? Because the anode rod looks disgusting and they want it out of their house. But also because they want to extend the life of their water heater. I mean, where I live, the average life span of a water heater is eight years. My water heater is now ten years old. I drain and flush it regularly and it’s on its second anode rod. I’m conducting an experiment. I want to see how long my water heater lasts in a city where the average life span is eight years.

So by checking the anode rod on every call, you now have to opportunity to replace it which will increase your service invoice. And you also have the opportunity to service the water heater itself by asking if the homeowner would like the tank flushed. You could also offer to clean the burners if it’s a gas water heater. Now you have three service items on a call for a leaky faucet!

I like to talk about anode rods because they are they ultimate passive need – literally a need that has to be filled that your customer isn’t even aware of. It’s like going to the doctor for a sprained knee and the doctor informing you that you have high blood pressure and something needs to be done right now.

So … what should you price your anode rod replacement at? I’d recommend the following formula:

Price of the part X 2 + Hourly Rate

So if a magnesium anode is $40 and your shop rate is $100/hour then you should charge around $180-$200.  (If you don’t know what your shop rate is, drop me an email and I will tell you.)

I know. You’re probably going … HOLY @#$%! BUT THE PART ONLY COSTS $40 AT THE SUPPLY HOUSE! THAT’S HIGHWAY ROBBERY!

Um … no it’s not. It’s business. And if you have a visceral reaction to charging between $180-$200 to replace an anode rod then you don’t understand markup and the value of service that you provide. The top 5% of plumbing companies are probably priced using a similar formula and have likely trained their people to check anode rods every call, every time. And those companies are likely giving their team a 5% spiff for every anode rod they install. (One company I worked with had a technician who created a separate bank account for all his anode spiffs, He’d set a goal of buying a pontoon boat with the spiffs from anode rod change-outs. Oh … and he got the boat within two years. Think about that for a second.)

So, given the sheer volume of water heaters in North American homes, each with an anode rod, doesn’t it make sense to check it every single time. Remember, it was a courtesy service: the customer appreciates you taking the time to show them how to extend the life of their water heater. All you have to do is train your team to ask the homeowner if they want to replace it and I guarantee that you will increase your average service invoice for plumbing by between $180-$200.

Well … what are you waiting for? Get cracking on those anode rods!