Client wants to possibly switch to hourly because of Corona

[Velvis]

I have a small business client who has had to layoff more than half his staff and is no longer taking a salary. The users are fairly needy but usually small quick issues. (how to do this? how to do that?, etc) but over all things run smooth. They frequently reach out after hours and weekends which I do not mind, as I want to be someone they can rely on. Honestly I don't think the owner knows how much I am there for his employees.

He had asked me if I would consider hourly temporarily because of the situation with Covid-19. His business is literally getting large groups together so this has hit him extremely hard.

I don't want to switch to hourly because honestly I don't want to deal with tracking every little thing I do or charge accordingly for it. For example: "I can't remote in" on a Sunday night and I fix it in 5 minutes and send the guy a bill for 1 hour with a surcharge for after-hours and weekend service. It just isn't how I operate.

I am not at all opposed to taking a temporary large monthly reduced rate do to the current situation as I realize he can't pay what he had been and he has half the staff for the time being so likely less support needed.

I do all the monitoring and resell O365 to him.

I'm just not sure how to present it to him that I would prefer to reduce the retainer than switch to hourly.

Any tips or suggestions on approaching this?

 

[Porthos]

For example: "I can't remote in" on a Sunday night and I fix it in 5 minutes and send the guy a bill for 1 hour with a surcharge for after-hours and weekend service.

In the end, This will end up costing more since they seem to be needy. If they are not as needy as I gathered from your post, I can see where he can save money but he might want to keep it that way down the line.
And with technology being needed more now, He needs systems working at top-notch.

 

[Mike McCall]

If you show him how moving to hourly will cost him more given his usage it may help him understand the value of what he's currently getting. If you want to help the guy out by reducing his bill temporarily that's fine. He may gain a bit of respect for you if he sees you understand the pressure he's under, and are offering some ways to help.

 

[SAFCasper]

I would snatch your hand off at the offer of largely reduced monthly fees. Getting the best of both worlds - reduced costs and predictability.

Sell hard on that last one. In times like these you need costs to be predictable. A few unexpected large bills can put you in serious trouble when cashflow is already an issue.

Also, make it very very clear this is a temporary thing to help them out. I would be setting a date such as "we will review the pricing again in 2 months time. Hopefully things are back on track by then."

 

[Markverhyden]

So you weren't clear, at least to me, exactly how you have this customer's support financially structured. Generally MSP contracts have a per seat charge which includes certain things. If it's not an AYCE plan then additional per event, time etc charges as they occur. So if they've let go of staff they should be eligible for a reduction. Even if it's not spelled out that way that's how I'd handle it. Otherwise if they want to go T&M pre-paid is the way to go. Blocks of X hours for $Y billed out in Z increments of time.

 

[Steven O'Neill]

I'd agree that if you reduced the monthly fee then this would be the way to go but the client will most likely ask about why it's so high after this is all over (how come you can do it for X when you've been charging me Y all along basically). So you'd need to be very clear that you're reducing the costs based on the fact they have fewer users at present but if you can show them what you are doing for them on a day to day basis that goes a long way in helping them decide the best route to take for support.

We tend to offer multiple options to clients and we're pushing the Support Hour blocks more and more (especially around Development work). We then use MinuteDock to record our time against Projects and the clients have a means to see what we've been doing by simply going to their client page. Means we only need to record the info once and the client can see this data whenever they want. Most likely other tools out there but been using this for years and works really well for us. You can also use it to bill clients directly using something like Xero (again we use this) and this just keeps everything clean from our PoV.

So essentially, offer them the options but weigh it in such a way to get them to go i the direction you wish to go.

 

[sapphirescales]

Change to hourly and charge them out the a$$.

Of course, warn them what will likely happen if they change to hourly. If they still insist, then let nature take its course. They'll be begging to switch back to monthly in a heartbeat. Problem solved.

 

[YeOldeStonecat]

We're anticipating this. Already had 1x client cancel (a hair salon..they, they're closed).

I don't know what type of calls the client has, or....how many staff total, perhaps how many "essential" staff are still there, or what other services they have which they'll be able to cancel, or..will have to maintain. So..hard to give an answer. But I'd strive to have a meeting (teams/zoom) with the client ...and discuss options, give examples of how "this" would look, and how "that" would look..and reach an agreement.

It's gonna take a few spreadsheets to give examples...for both you and the client.

I'd be as accommodating as possible...clients will remember that and be that much more loyal and appreciative when we come out the other side of this nightmare.

 

[timeshifter]

For example: "I can't remote in" on a Sunday night and I fix it in 5 minutes and send the guy a bill for 1 hour with a surcharge for after-hours and weekend service. It just isn't how I operate.

Bill that time for a quarter hour or a 1/3 of an hour. With a surcharge for after-hours / weekend. Every time you answer the phone or do anything then log it. I use Tsheets.

I'd do what I could to be accommodating. He'll remember that when things improve. I think offering to lower the rate makes it look like you've got too much margin in the deal, and like others mentioned he'll begin to wonder why it was so high to begin with.

You could even say "we're going to hourly until the end of June, then on July 1 we're back to MSP plan" or something like that. I wouldn't say we'll renegotiate then. You might have to, but you're negotiating by saying you're going back to normal on July 1 (or whatever date you pick), because you're setting the terms now.

 

[kwest]

I have offered to pause or discount my business accounts. Pause is if I can shut off their server. Discount if they have less employees or need.

instead of switching to hourly offer them a discount for the month of April. And say you can discuss in may how much they are using their service and adjust. Keep track of your time.

 

[Markverhyden]

I'd be as accommodating as possible...clients will remember that and be that much more loyal and appreciative when we come out the other side of this nightmare.

Yep. Now is not the time to be burning bridges if one wants to stay in business. People/businesses really remember what happens when times are tough. Both the good and the bad.