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ForumsA thread recently came up in the Technibble forums where a Technician asked about how to charge friends and family for computer repair work. This computer technician seems like your typical nice guy who wants to be good to his friends, family and clients. We all want to do the right thing by these people but there comes a point where your “being a nice guy” just gets taken advantage of. This can be in the form of friends and family calling you at 10pm on a saturday night for every single little technical problem they have. He might even give a discount if a client asks for one because hes such a nice guy.
By doing this you will eventually hurt your fully paid work by devaluing it. Here are the two most common ways technicians devalue their services and why you should avoid them:
Discounting When People Ask for It
Everyone loves a discount right? I do and I often ask for one when I buy computer stock since I buy stock in decent volumes. I also know the price can only go down so far because I know that the sellers have their own costs for the stock that I am now buying. Discounting for hardware doesn’t create much of a problem, but discounting for service does.
You see, your client knows that what they are paying for is your time and your knowledge which are both intangible items. If the cost for you to arrive onsite is only $10 for petrol and you are charging $70 per hour, why cant you charge the client $50 since its mostly profit?
Lets say you are a nice guy and you only charged the client $50 this time. Since they don’t know that your costs are $10 and you were able to discount $20 just because they asked, they will begin to wonder how much money is left on the table? How low can you go?
You don’t want the client to ever think like this. If you give them an inch they will take a mile and these are the worst type of clients to have. They will expect the most work for the cheapest price.
“But Bryce, if I don’t give them a discount they will go to my competitor who does”
With the 30% extra I make, I will put that into even more marketing and get more full paying clients. You see where this is going.
I’m not saying I don’t give discounts at all. I’m just saying I don’t give them to people who ask for one. It devalues the work.
Doing Work For Family and Friends for Free
It is always hard to decide what to do when doing computer work for friends and family. You want to help them out but you don’t want to be taken for a ride either. There is a trap that many technicians fall into and that is doing free work once for their cousin/uncle/aunt like talking them through some computer problem. A few days later they find that the relative calls them up with another tech question, then another and another. The calls get more frequent and what they are asking gets smaller and less important. Basically, they call you the moment they hit something they cant do on the computer “How do I copy and paste again?”. Suddenly you are the infinite fountain of tech wisdom. Why should they try and figure out something basic by themselves when a quick call to you will fix it? You have devalued your work to the point of being almost worthless amongst your family and friends.
How can you prevent this? Always charges something. Anything.
I will work for free for my immediate family consisting of my mother, father, sister and fiancee since they will all do anything for me but any outside family has to pay something. I personally like to run on a beer/spirit system where the amount of beer/spirits depends on the amount of time it will take. If I spend 1 hour removing a virus, I want a 6 pack. If its 2 hours I want two 6 packs. If you convert this to a monetary value, one 6 pack is only $12 USD so I am still doing them a huge favor and I make sure they know that. I am not even that big of a drinker, the beers can stay in my cupboard for months. It just makes my time valuable to them and means if they want to take up my time, they better make sure its worth buying me a beer for.
What Happens Down The Road of Devaluing Your Work
What happens when computer repair work becomes too undervalued? There is a small example of what happens on a computer repair provider platform called Onforce. Onforce links businesses who want to outsource some tech work to other computer businesses that want some extra work. The company that wants to outsource the work posts a job on the Onforce site (goto this address, install network cables, act as if you are part of our company etc..) and another computer business or freelancing technician accepts it.
The platform itself is good and there is money to be made on the service but its users are the problem. What seems to be happening there is that many companies are submitting extremely underpriced jobs like “drive 2 hours and install 100 metres of network cable for only $40″. This wouldn’t be a problem if none of the technicians accepted this work as it would force the submitter to pay more to get someone to do the job. However, inexperienced teenage technicians known to Onforce users as “Pizza Techs” (I guess that’s because they still live with their parents and do cheap tech work for pizza money?) constantly accept these lowball jobs that no proper business could make any profit on.
After some time, the companies that are doing the outsourcing keep putting out unrealistically low jobs since they know they will eventually be accepted. These “pizza techs” devalued their work, the work of other techs and now decent jobs on the platform are harder to come by for all.
Lets make sure this doesn’t happen to you. Lets make sure it doesn’t happen to the rest of us. Don’t devalue your work.
Hardest thing to do is value your services. It is a bit easier if you are not doing the work yourself (as in you are paying someone to do it) but there is always that fear in your gut that you are overcharging. There are a lot of charts out there that show raising prices actually results in dropping the low end customers and gaining higher end ones equaling an increase in gross revenue. There is obviously a limiting factor to this but usually the first limiting factor is having the belief that your services are worth what you are charging. And that comes from giving the best quality of service that you can imagine giving and then charging for it. I always think that I’d like to hear my customers telling other people: “They are expensive but their service is so good I don’t mind paying the extra money”. That is the customer I want.
And I’ll work an hour for anyone that buys me $12/6 pack beer. That is the best. It is expensive but so good it is worth the money.
Great post as always Bryce. It’s important not only for you, but for your fellow technicians in the industry. If you suffer, at some point it trickles down and we all suffer. This industry is heading straight down the tubes if something isn’t done to get these “pizza techs” to get lost, or at least value their services and quit accepting/offering to do work for such low prices. Us seasoned guys, with real bills can’t compete with them, because we simply can’t afford to devalue our work as they do.
This is an issue I have wrestled with myself – where do you draw the line and all. Thanks for writing this up and offering some additional perspective.
The only time i give a discount to outside family and friends(usually my wife’s family and friends) is when it is something I can learn from. For instance, a brand new virus variant. Other than that, i need cash. Especially if you will pay the guy across town full price with no questions. Although beer sounds good
I remember this topic in the forums, And you deifinitly hit the nail on the head on this subject. Is “pizza tech” a buzz word? lol never heard of that one before
I have mates rates and have since day 1, nobody gets a job done for free ( parents brothers sisters are the exception)if my standard rate is £40 I’ll discount £10, but 9 times out of 10 the job will lead to a follow on or a referal so its worth the discount everytime.
Good Read Bryce. I personally use Onforce and fortunately have been profitable with it. It’s a good, albiet small portion of my business. We however do value our service, so we set a price per hour and stick to it. If they “buyer” doesn’t want to pay, then we walk away. Sometimes we get the job, sometimes we don’t. We’re lucky, we are in a rural area with not that many techs that work onforce, so it works out pretty well. Now we have seen some jobs go for nearly nothing, but that’s par for the course. Word of advice on using onforce. Do not base your business on it, wheather pizza tech or Seasoned tech. Services like that are only supplemental. I do back you 100% on the undervaluing our work, we have many people locally doing that and I loose alot of business to them…but, eventually, they come to me in the end after the other tech screw up.
Spot on, yet again. We wrestled with raising our prices too (for years). Finally, once we did… we saw significant growth. So we did it again.
It boils down to the perception of value. People are willing to pay a little more to have someone with higher end skills work on their equipment.
We started offering two different pricing models… you can have fast service or cheap service, but you can’t have both.
Fast service warrants an on-site service fee at standard rates.
Cheap service is done after everyone who wants to pay a little more is taken care of first, on a pickup/delivery basis (sounds like a pizza tech now that I’m typing it…). This lets us set up a more efficient depot style environment and rapidly resolve multiple issues across many machines as quickly as possible.
Plus, it caters to both the upper echelon and the lower end of the mid-tier. Granted, our lower tier is still in line with our average service ticket price point… so in essence… we’re not losing anything. Only enhancing the perception of value.
Onforce… had multiple issues with the quality of the service techs from a buyers perspective and from a providers perspective… I guess my area is to saturated to grab a ticket. By the time I’m logged in (I use Roboform, so login is about as quick as possible), there’s usually 2-3 people in front of me. The only time I’ve been able to have the opportunity to snag one is when it’s someone looking for a pizza tech.
Personally, I won’t leave my house for less than a C-note.
This is my life exactly! I appreciate this article!
I’ve fallen victim of underpricing. I dont mind helping a uncle, but what Bryce stated,
“…A few days later they find that the relative calls them up with another tech question, then another and another. The calls get more frequent and what they are asking gets smaller and less important.” is true.
The only person I do free tech work for is a step brother, i dont know, i just feel bad when ‘friends’ ask him to install their stereos, or just check their car for problems- i guess i feel bad for him, getting taken advantage of.
great article
Thank you for this. It needs to be said every so often.
It is hard, sometimes, to “stick to your guns”.. especially when it comes to family (or worse, your ’significant other’s’ family) as I imagine anyone who does this well knows. (Can any say “Catch – 22″?)
As for a “solution” to the “pizza techs”…
A few years ago, it seemed I had a dozen ‘fair weather friends’ all come out of the woodwork at the same time, all looking for free repairs. I came up with a “one hour deal” where, no matter how long the repair took me, they paid me for one hour of my time.
Immediate family and very good friends get free help and, ironically, the close friends are the ones who usually say they should be paying me, recognizing my skills are not come by cheaply.
“Pizza techs”…love it.
It reminds me of an article I read a long time ago about a guy whose computer repair business model involved him hiring waiters/salespersons to do the tech work. His philosophy was “it’s a lot easier for a customer service person to learn the tech side than it is to hire a tech guy and try to teach him people skills.”
While I like to think my theatre sideline helps keep my people skills in check, it’s been a good reminder not to be a tech elitist around my customers.
I’ve got a “gentleman’s contract” worked out with family members: I do the work for free, they send their friends, co-workers, etc to see me.
So far, so good.
Getting people to understand that you’re making a living out of doing this is akin to being a doctor at a cocktail party, where everybody expects you to give your professional opinion for free….
I have been seriously stuggling with my devalued service. I do good work. I know my stuff. I have had trouble figuring out what to do. Now I realize i need to improve my business practices, reorganize my shop. Then raise my prices.
The timing of reading this article couldn’t be more perfect and relevant to what I am currently wrestling with.
I also see the devaluing through Craigslist. There are plenty of “pizza techs” and side-jobbers on there. I used to post years ago, but most people wanted low rates and very little brick and mortar businesses use it.
I recently started posting again because, well, face it, I need new business. But the “pizza techs” are dropping their rates to almost nothing, to a rate that know one can actually live off of.
For example, I got a call late Saturday afternoon from someone that needed a brand new still-in-the-box Windows Server 2003 to be setup and to replace an old Windows 2000 server in a AD structure. 30 desktop company. I thought “Great! Finally, real business”. But he only wanted to pay $20 an hour. Good luck in finding quality to do that. He said he would keep calling around.
I could have lowered, but it just didn’t seem worth it. Period.
Your article was great. It really spoke to an issue I’ve been wrestling with. Especially the part about OnForce.
I joined OnForce a few months ago. I work a “day job” as IT support for a local school system. My thought was that this would be a good way to pick up some extra cash to help pay down some debt.
Just now, I received an e-mail alert for a job. It was accepted by someone else within two minutes. I didn’t even stand a chance. The worst part is the fees I’ve been seeing. In some cases, gas cost alone would eat up almost half the fee.
I’m debating whether it’s even worth it to keep my account on OnForce.
The hardest thing for me at first was billing people and asking them for the money. I’d worked in sales for so long I was used to handing someone off to someone else to finalize the transaction and take their money.
Once I realized that most people are happy to pay for good service, that timidity went away quickly.
You have to believe in what you’re selling ultimately, because you ARE the product now. If you’ve got that covered, you won’t have any problem valuing it correctly.
I will always help my family for free, because like everyone has mentioned, family does a lot for each other. However, friends and family friends know I will need a little compensation for my time, and I am honest with them if I don’t feel comfortable doing something and if I can’t help them I tell them and I don’t expect anything. If I am able to help them they will always do something for me like getting me dinner, and one of my mom’s friends will do my hair as a trade service, which is an awesome deal because stylists charge obscene amounts, lol.
Great article. However, I must say even asking family/friends for a little something, such as beer, will not work like you stated, sometimes it’s not that simple.
For example, I helped family members to fix some computers, and every time they would buy me a nice dinner, so it’s kinda like your free beers. But this doesn’t stop them calling you in the future for some small problems or questions that can be solved over the phone. Now you have a great dilemma, do you help them over the phone or not? I doubt they expect to give you a beer every time they call you. So what should you do?