Is this tech under-charging?

[DocGreen]

Had another local tech severely under-bid me in a Facebook group the other day, and I'm wondering if he's on the right track and I'm way off base, or if it's the other way around. Here's the short version:

Woman with an Inspiron N5040 (laptop) was inquiring about troubleshooting a W10 problem as well as having a CPU fan replaced. I told her to message me on my business page and I'd give her a quote. Another local tech jumped in and offered to take care of both problems for $35. When I asked him if he realized it was a laptop, he said "Sure...only takes about half an hour (unless an old Toshiba). I take apart and repair 2-4 a day."

I would have charged the woman $86.25 + parts for the fan alone... and have never had a customer complain about that price.

Is it just me, or is this guy SERIOUSLY undervaluing his (and by proxy, my) work?

 

[PodnutzPro]

In my opinion, he is undercharging.

 

[AlexanderCS]

He's too cheap. $35 to troubleshoot an unknown Windows 10 problem AND tear apart the laptop and replace the fan? Come on.

Even at 15 minutes of time, that's rock bottom pricing. What's his hourly? $30, plus $5 for the fan?

 

[Markverhyden]

Way undercharging. But by the same token I'd bet she pays a good bit more than $35 when it's all said and done with. Unless the tech is living at home with Mom and Dad there is still rent, gas, etc. Those types always have some snake oil to sell as well.

 

[DocGreen]

Way undercharging. But by the same token I'd bet she pays a good bit more than $35 when it's all said and done with. Unless the tech is living at home with Mom and Dad there is still rent, gas, etc. Those types always have some snake oil to sell as well.

That's what pisses me off the most. This guy has a prime location in one of the city's main retail corridors that's been booming lately... and he's only charging $35 for this. And it's not like he's a new tech... he's been around for like 20 years now. Meanwhile I'm over here billing $120 an hour (flat rate per svc for residential) and I'm still stuck working out of my garage after 5 years.

 

[mraikes]

Ok, so apparently he's a "real" tech and business. So we have to imagine why he might do such a thing.

Makes you look bad.
Gains a customer with an introductory rate - you know, just trying to help out.
Business is slow this week and something is better than nothing.
Needs to keep lower paid employee busy. Or training.
That's his regular pricing and he just does a LOT of jobs.

Ghost shop him and find out what he charges IRL.

 

[sapphirescales]

LOL. We charge $49 to $189 for the job depending on the laptop and cost of the replacement fan and/or heatsink. To just do them all for $35 would send us into the poor house.

My guess is, he uses cheap prices to get them through the door, then "discovers" that they have a failing hard drive, viruses, etc. and charges them hundreds to fix those "issues." We have a guy on Craigslist like that here. Many of my clients went to him because he promised cheap computer repair, then left spending $100's of dollars for work they didn't even need.

 

[nlinecomputers]

Some other tech used YOUR web page or facebook page to contact your prospect. Why the FRAK are you allowing that?

 

[DocGreen]

Some other tech used YOUR web page or facebook page to contact your prospect. Why the FRAK are you allowing that?

No, this was in a local Facebook group someone created for people needing computer help... not my website or business page.

Ok, so apparently he's a "real" tech and business. So we have to imagine why he might do such a thing.

Makes you look bad.
Gains a customer with an introductory rate - you know, just trying to help out.
Business is slow this week and something is better than nothing.
Needs to keep lower paid employee busy. Or training.
That's his regular pricing and he just does a LOT of jobs.

Ghost shop him and find out what he charges IRL.

I've tried legitimately shopping him in the past... he also does electronics repair and I have a couple receivers that need repair. I could never get the guy to answer his phone or respond to emails. I've not actually been in his shop since I was a teenager and my dad was buying some Hi-Fi stereo equipment (back then I didn't even realize he did computer repairs... but then computers weren't nearly as prolific then). Everyone I've talked to in the area though has said he's a complete jackass, and incredibly hostile toward other techs, so it's completely plausible that he's just trying to undercut me.

 

[coffee]

Hi Doc,

Well, He probably thinks that he is going to really draw in business by bottom fishing his prices. Doesnt work. Just end up getting all the bottom feeders. I get them and my prices are not all that high. They him and haw over the price and I just do not even try with them. Not worth my time.

I cannot see him making a profit at 35 bucks.

 

[Computer Bloke]

You have a great opportunity here.

In this situation I'd bow out gracefully but ask the client to write back to the same Facebook group describing their experience. This will either force the other guy to meet his quoted price or show everyone what he's really up to.

With enough clients like this you could even drive him out of business!

 

[nlinecomputers]

Cheap clients are bad clients. Let him bottom feed and you stick to a higher end clientele. Frankly working a Facebook page is bottom feeding on your own part. Just like CL ads are.

 

[Computer Bloke]

I really like cheap clients. I especially like sending them to someone else.

As a rule of thumb, if 20% of prospective clients don't think you're overcharging then you're probably not charging enough. (If 80% of prospective clients think you're overcharging then you really might be.)

 

[Krynn72]

I've tried legitimately shopping him in the past... he also does electronics repair and I have a couple receivers that need repair. I could never get the guy to answer his phone or respond to emails.

Should have posted something like "Oh hey, good to see you're still around! I've been trying to contact you for months but could never get you on the phone or email. Have a few receivers that need fixing that I dont feel like figuring out, but I thought you went out of business. Hope all is well "

Then the lady would be adequately suspicious of him. And its not even lying! Well, maybe the "hope all is well" part is.

 

[Computer Bloke]

Then the lady would be adequately suspicious of him. And its not even lying! Well, maybe the "hope all is well" part is.

The trouble with this approach is that it will make everyone else suspicious of you as well. Nobody wants to step into the middle of a fight, and you'd be much better off presenting yourself as the professional who's there to take care of things when the cheap guys fail.

And also:

 

[DocGreen]

Thanks for all the input guys. I honestly haven't really had very high expectations from the group, but I was encouraged to join by another [very successful] owner in my area who's been trying to point residential clients my way. So far most people have been looking for free advice.

 

[callthatgirl]

go for the GOLD, seems like that guy is bottom feeding for sure. Stay firm!

 

[kwest]

We would have been 125 for the fan and 100 for Windows problem. We also guarantee our work and have a storefront if the person requires warranty work.

 

[DocGreen]

We would have been 125 for the fan and 100 for Windows problem. We also guarantee our work and have a storefront if the person requires warranty work.

Same here, with the guarantee at least.

 

[jzukerman]

but I was encouraged to join by another [very successful] owner in my area who's been trying to point residential clients my way. So far most people have been looking for free advice.

And that's why the other owner is sending them your way. Because he/she doesn't want to deal with lowball residential clients. Ask that owner a question as to why he/she is passing up on said opportunity. They'd probably tell you the truth if they're honest.