Do You Waive the Assessment Fee if a Customer Agrees to Your Service?

[pcpete]

Let me ask you something. Have you EVER had your auto mechanic waive the diagnostic fee to figure out what's wrong with your car? No? Why not? Because it costs him TIME AND MONEY to find out what's wrong with it. Why should he work for free? Because you're going to pay him to fix it? That's ridiculous. You can claim that you're bundling the cost of the diagnostic in whatever work you do, but the fact remains that you could easily charge whatever you're charging for the repair (with the diagnostic fee included) PLUS the diagnostic fee. Shops that waive the diagnostic fee really make me shake my head in disbelief. That's like your plumber waiving the trip charge if you actually pay him to fix whatever the problem is.

We have offered free diagnostic for 10 years and it has worked well for us. It is easy to say on the phone, "bring it in and let us run all of our tests and we will let you know exactly what your options are to make it run well again. This is a free service. Then with this information you can make a good decision on what to do". It has worked well for us and we have great margins in our shop and are all making great money.

 

[AML]

We wave our diagnostic fees if they agree to the repair. 95% of our clients agree to the repairs if it is fiscally responsible. Most of the time even if the machine repairs are too costly we can get them into a new or refurbished machine. The diagnostic fee keeps the free loaders away.

 

[sapphirescales]

We have offered free diagnostic for 10 years

That's the kind of thinking that makes people keep doing the same old thing when there are much better options. How many clients do you see per year? 500? 1,000? Even if you just charged $30 for a diagnostic fee (which is ridiculously low BTW, for any area), that's $30,000/year you're leaving on the table. Most clients aren't going to quibble over an extra $30 on their tab in the end. Those that do aren't worth having. Hence why 90% of auto mechanics charge anywhere between a $15 and $45 "shop supplies" or other bogus fee ON TOP of the diagnostic. It's literally free money and the types of people that complain you don't want anyway.

 

[EpicRhox]

There's actually several auto mechanic shops where I live that will look at your car and quote you for free. One gives you a discount on their oil change if you ask them for diagnostics and an oil change, and almost all of them, if you are buying a used vehicle will inspect it for free before you buy it so you know you are not buying a lemon.
Every other computer shop here locally offers free diagnostics, so I just went with the flow thinking charging more would be sending everyone to the competitors. I think in more populated areas I can understand charging for the service, and after reading this post and a few other articles on these forums, I see that switching up a couple simple prices and polices might show a difference in quality of work ethic between me and my competitors.

 

[pcpete]

That's the kind of thinking that makes people keep doing the same old thing when there are much better options. How many clients do you see per year? 500? 1,000? Even if you just charged $30 for a diagnostic fee (which is ridiculously low BTW, for any area), that's $30,000/year you're leaving on the table. Most clients aren't going to quibble over an extra $30 on their tab in the end. Those that do aren't worth having. Hence why 90% of auto mechanics charge anywhere between a $15 and $45 "shop supplies" or other bogus fee ON TOP of the diagnostic. It's literally free money and the types of people that complain you don't want anyway.

It may be a better option, but who knows. Are we afraid to stop doing something that has worked for us and try something drastically different that may make us more money, probably. We have considered adding a diagnostic fee for years, but always end up deciding against it. It would be very disruptive to our clients to just start charging them to look at a computer when they have been used to the way we have always done it.

For that extra $30,000 we may be taking off the table, we may be losing 100,000+ in unrealized income and clients which in the break fix arena are dwindling. By offering free estimates we are not mainly appealing to cheap people(who are probably more likely to spend money on a repair), but people who have an aversion to risk. They would rather buy something new, than risk spending money to find out something is not worth fixing. In their mind the diagnostic fee is throwing money away and would rather just buy some thing new. At least that is my theory

The thought that we would have to explain the likely hood of the repair going a certain way on the phone to justify the diagnositc fee makes me cringe. Especially for a new employee to try and explain possible outcomes. It is so much easier to say, "bring it in and let us run all of our tests and we will let you know exactly what your options are to make it run well again. This is a free service. Then with this information you can make a good decision on what to do".

 

[sapphirescales]

At least that is my theory

Theory vs. practice. Guess which one wins every time? It doesn't have to be a permanent (or even long-term) change. If I were in your position, I would keep doing what you're doing for a month and record the percentage of calls you don't convert into clients. Then next month tell every client about your $30 diagnostic charge UP FRONT over the phone and see if your number of conversions go down. I'll bet you it stays about the same.

I used to do free diagnostics too many years ago. Charging for diagnostics hasn't affected my conversion rate at all. I have maybe one person a year that asks if the diagnostic goes towards repair. People in general don't expect that unless you tell them that you waive it when they proceed with the repair. Better yet, I've been able to gradually increase my diagnostic fee over the years. I started at $20, then to $30, then to $50, now I'm at $69 and I'm thinking about increasing it to $79 next year. I make so much money with diagnostics I would be crazy not to charge for them.

Now if you're in a poor market with most people buying the $250 Walmart special, I recommend keeping your diagnostic rate low. No one that paid $250 for a computer is going to want to pay $79 just to find out if it's worth fixing. But honestly, this is what Staples and other big box stores charge and they seem to make it just fine. I don't know. All I know is giving up money and working for free are NOT good business practices. Hence why pizza places charge a bogus $3 "delivery fee" when they don't even provide cars to their drivers AND expect you to tip on top of it.

 

[pcpete]

That is good advice, and something to consider. Even a small $19 diagnostic fee is palatable as a start, without much shock to people.

To say not charging a diagnostic fee is akin to working for free and bad business is not accurate. Last month my employee and I billed out just under $34,000(best month ever) doing mainly break fix residential with a few business clients while offering free diagnostic. Not all of that was labor, a big chunk were computers and parts marked up at least 100% I am sure your numbers were much higher, but I felt pretty good about ours.

Many other businesses offer free time with the hopes of getting paid later: realtors, contractors (giving free bids), and many other commission based salesman are a few that come to mind.

 

[pcpete]

@sapphirescales I could almost see creeping in a $10 check-in fee, but still offer free diagnostics. That seems kind of contradictory, but if we could word it just right. Hmmmm.

 

[ell]

Hi everyone,

Just a quick question: Do you waive the assessment fee if someone agrees to your service? I'm debating on this, but I'm not sure.

On one hand you have the purely profit-driven ideology. Regardless if they go for your solution or not, you still spent your time with their computer on their bench that is costing you money.

The other is the customer service/selfish argument. That is, a company's main motive is to create profits; however, if you only look at the dollar and not the customer you lost customer service.

Am I right in my thinking? Or is this a false dichotomy? I'd love to hear your input!

I used to do free diagnostics because the competition was, big mistake. You get people wanting you to tell them what wrong then fixing it themselves. I waive the $35 diagnostic if I do a repair. I do sometimes waive the fee if its too obvious

 

[sapphirescales]

Many other businesses offer free time with the hopes of getting paid later: realtors, contractors (giving free bids), and many other commission based salesman are a few that come to mind.

But if you notice, most of those people offering "free" time is because it's a BIG purchase and they stand to make a CRAPLOAD of money on one job so they can afford to do this.

@sapphirescales I could almost see creeping in a $10 check-in fee, but still offer free diagnostics. That seems kind of contradictory, but if we could word it just right. Hmmmm.

I would highly recommend against using the term "fee" because the word "fee" has a negative connotation. I word my diagnostic fee as a "diagnostic and consultation" service. And I actually spend TIME with my clients when they get here. I don't just collect $70 along with their computer and call them in a few days. That wouldn't go over well. My diagnostic and consultation runs about an hour with most clients. I diagnose the computer while they wait and talk about what they need in a computer and whether I recommend a trade-in or repair. Because honestly, that's what people are wondering. They want to know whether it's worth it to fix their current computer or if they should just get a new one. Whichever they choose, I offer a solution.

 

[fencepost]

If I was doing break/fix, I'd absolutely charge a diagnostic fee, but as with others it'd be considered part of the cost of the repair if they chose to have me do it. The fee covers your time and overhead (it costs to have that shop that they came into), but if you're doing the repair then the diagnostic is something you'd have to do as part of the repair.

As for the car analogy, I'm pretty sure a lot of places will do a free diagnostic depending on what the issue is. "Hey, my car is doing X, can I get an estimate for how much it's going to cost to make it right?"

 

[pcpete]

I don't think at this point we will charge anything for diagnosis, but @sapphirescales got me thinking. I think a lot of people waive the diagnostic fee if the client agrees to a paid job, because of pride caused by feeling like they were taken advantage of if the client does not do the job. I don't think that is a good criteria. I think the criteria should be financial only. Financially I think by offering the free diagnostic the extra business way overcompensates the lost money in the occasional job that does not pan out. If we were to add a diagnostic fee, I think it would be a low one, say $19, but that would be separate from the actual price.

One thing I always think about is the Pareto principle, the 80/20 rule. Maybe by adding a $19 diagnostic fee this would free up some time by temporarily cutting out some business(scares me), which would allow us more time to build up a more profitable base. But after doing things the same way and making good money it is hard to take a risk and do something different, especially with the break/fix market shrinking.

 

[fencepost]

One other thing that a nominal diagnostic fee gives you (and yeah, I'm talking $20 not $50) - a convenient thing to waive to placate someone irate, and a convenient thing to use as a promotion (e.g. giving out cards at networking events for a diagnostic with the normal fee waived).

 

[joeblow33]

Hi everyone,

Just a quick question: Do you waive the assessment fee if someone agrees to your service? I'm debating on this, but I'm not sure.

On one hand you have the purely profit-driven ideology. Regardless if they go for your solution or not, you still spent your time with their computer on their bench that is costing you money.

The other is the customer service/selfish argument. That is, a company's main motive is to create profits; however, if you only look at the dollar and not the customer you lost customer service.

Am I right in my thinking? Or is this a false dichotomy? I'd love to hear your input!

Yes, roll it into repair some or all into repair fee.
DatumIT.com.au

 

[joeblow33]

One other thing that a nominal diagnostic fee gives you (and yeah, I'm talking $20 not $50) - a convenient thing to waive to placate someone irate, and a convenient thing to use as a promotion (e.g. giving out cards at networking events for a diagnostic with the normal fee waived).

One other thing that a nominal diagnostic fee gives you (and yeah, I'm talking $20 not $50) - a convenient thing to waive to placate someone irate, and a convenient thing to use as a promotion (e.g. giving out cards at networking events for a diagnostic with the normal fee waived).

I charge $75 for diagnostics, I think that is cheap!!

 

[pcpete]

most of you guys are not charging a diagnostic fee, but have a minimum charge(if you are waiving it). It probably sounds better to the client to call it a diagnostic fee.

 

[fencepost]

$75 might be cheap for diagnostics for you, but I suspect it's pretty high for most folks on here - particularly ones in rural locations where an hourly rate > $60 is a hard sell. In my case, most of my diagnosing is on-site at customers and involves low- to mid-range business systems that are usually several/too many years old and often better just being replaced.

Heck, the most recent memory test I had to run that turned up anything was on a laptop with Windows 98 (had been hooked up to diagnostic equipment and a printer, no HIPAA concerns because no network connection or even capability) - and no repair because the failed memory module was the 64MB soldered to the motherboard.....

 

[sapphirescales]

In my case, most of my diagnosing is on-site at customers and involves low- to mid-range business systems that are usually several/too many years old and often better just being replaced.

I thought I should mention to anyone that's interested that when I go out on-site, I USUALLY don't charge a diagnostic. I bundle the diagnostic and the trip charge together. In fact, the line item actually says "Diagnostic & Trip Charge." However, the diagnostic and trip charge is $169 so it more than covers it.

 

[Jeff Gedgaud]

I think people have become used to fees and costs to have things fixed, so much so that they don't really care what you call it or how you factor it in. Diagnostics fees and whether its put toward a repair really only means different ways of saying it costs to get things fixed. Yes you should be paid for your time but there is also the factor of good customer service. In the end I have seen that having an upfront payment due for those repairs that more often than not are abandoned if they do not work out are the best practices.

Our shop has changed a few times since I've started and having that upfront payment means I have less abandoned old pc's and TV's that were just too expensive to fix and I'm not coming in to pay that minimum fee because now I got rid of that clunker of a TV for free.

 

[KK_KK]

We charge a $20 non-refundable fee for diagnostic. If the client decides to move forward with the service/repair, we apply the fee. If they are local residents, we usually do not charge the fee. Local meaning the same zip code of our business.

*We may change the fee to $30 since diagnosing the issue can be very time consuming.