residentian and commercial costumers fees

[marcink99]

do you charge different fee per hour for commercial costumers. If yes how do you explain to them that working on the server requires higher level of expertise than working on the desktop therefore higher fee.

I don’t want them to think that I charge them more only because they own a business.

 

[Appleby]

Yes I charge different amounts....and I hate it. Right now businesses pay $10/hr more but that will probably change in 2011, depending on the economy etc. I want to have a flat per hour price across the board.

The reason I charge differently is because I started out at a decent rate, but it was too low. I had a good number of residential customers, (alot more than business customers at the time) and I realized it was going to be much easier to raise the business prices than it would be the residential. I decided to go up immediately on business and honestly, not one of my current customers ever mentioned it and my business customers grew 10 fold. I raised my residential prices once by $10 and I want to raise them again $10 more to have one flat hourly rate.

I had one good customer who I did alot of work for and even kept her at the old price for an extra 6 months after explaining to her the price increase which took effect on Jan. 1. After paying the $10 extra on one on-site visit, she complained and has never called back. I hate it, but at the same time, I more than made up for her business with all the hours I was billing $10 more per hour on.

Here is my problem with charging businesses more.....

First I would be uncomfortable explaining why they are paying more (even though, none have asked yet)

Second, my business customers are some of my BEST customers, whom I love to work for the most.

Third, there are tricky situations when quoting prices before you know if you are dealing with a business or a residential customer. For instance, I get calls from people to come out to their house to work on a pc etc and I quote my residential price. I get there and see they are running a business from their home! Then I have business customers who also use me in their homes. If I charge them the business rate at home, I've got to always remember this and always bill them at the same rate. So when they call I would have to remember...."oh ya, he's also a business owner so he pays more even at home..." That's not fair to him and it's a pain.

IMO go with one flat hourly price unless there is special business work that you charge more for, such as server work etc.

 

[MrUnknown]

Yeah, I have one rate for business and home. Usually the problems are actually similar issues. A virus removal from a business computer isn't much different than from a residential computer. Most small businesses don't even have a normal business setup (no server, or if they do, they don't use it completely.)

However, I see nothing wrong with having larger fees for server work or something that is more specialized.

 

[lassenpc]

Yes, we charge more for commercial than residential; no one has ever asked why.

Most residential clients bring their stuff into the shop now (we do still offer onsite residential, but at $10 more an hour)

Commercial can have same basic issues of a residential machine, but there is the potential with all the extra plumbing and proprietary programs for there to be more to sift through to get things straightened out.

 

[Martyn]

At this moment in time both my charges are the same as I'm just getting off the ground and have no businesses at the moment. As regards a dual charging system I think there should be but the way to look at it is that the business is the going rate and residential is less not the other way round(glass half empty, half full comes to mind )

 

[NeutronTech]

Part of the reason business pay more is the service level is a bit different. For one, most are more thorough about doing backups and then double checking those backups before doing any work. They usually get priority service. They have custom software which may require calling in to their tech support and working with them to solve a problem. As well as many other things.

Not that residential customers shouldn't be treated the same, but it is not how it usually happens. Plus, even if you are just as thorough in both residential and commercial, many businesses expect this to be the case when charged more than residential. That's why most don't ask why. If they do, this explanation clears it up pretty quick.

 

[Martyn]

Part of the reason business pay more is the service level is a bit different. For one, most are more thorough about doing backups and then double checking those backups before doing any work. They usually get priority service. They have custom software which may require calling in to their tech support and working with them to solve a problem. As well as many other things.

Not that residential customers shouldn't be treated the same, but it is not how it usually happens. Plus, even if you are just as thorough in both residential and commercial, many businesses expect this to be the case when charged more than residential. That's why most don't ask why. If they do, this explanation clears it up pretty quick.

Yes and you have to wait and chase for your money

 

[Snazzy PC Repairs]

Yeah - I hate the whole chasing payment routine. We have one business customer that gets occassional work done, maybe a 2 or 3 hours work per quarter.

We do the work & send them the invoice, clearly stating payment terms of 30 days. A month goes by, we send a reminder letter. Another few weeks go by, another reminder letter or phone call to accounts dept. Eventually the bill gets paid, but it could be 3 months since I did the work.

I know I'm going to be paid, eventually, but I am wasting more time writing and printing follow-up letters, and then phone calls.

Do I consider charging this one business customer more per hour, just to cover all the time wasted later on trying to extract payment from them?

 

[norm1320]

Do I consider charging this one business customer more per hour, just to cover all the time wasted later on trying to extract payment from them?

You certainly could, but it's better business practice to charge them interest on any outstanding balance as soon as the account becomes delinquent. The customary rate is 18% (often stated as 1.5% per month).

 

[vdub12]

I don’t want them to think that I charge them more only because they own a business.

Many people will tell you a big load of bull about why business customers should pay more but thats all it is, bull.

The single ONLY reason that people charge businesses more is because they will pay it. Honestly 75% of residential work is harder why don't they pay more.

Picture it this way, you hire a plummer he comes to your house to fix your pipes and notices that you run a business out of your house. Because of this the bill is $150 an hour instead of $100 an hour. How would you feel having to pay more simply because your a business.

 

[Cambridge PC Support]

I'll flip it around and say that I have a standard rate of £x/hour - but I give a discount of 25% if you're not using your PC to make money

 

[MrUnknown]

The single ONLY reason that people charge businesses more is because they will pay it. Honestly 75% of residential work is harder why don't they pay more.

Right, most residential clients usually have a Windows 2008 R2 server running Exchange, now diagnose why they can't send email.

There are 2 reasons. One, because they will pay more. Second, because their requirements and skills required are on a different level.

 

[Three Dog Net]

We have a flat fee across the board of $75/hr for on-site calls, residential or commercial. However, we do have a 'Network' price of $65/hr for members of our chamber of commerce.

Before the owner brought me on to run the day to day, the company had service agreements with customers, which for a certain yearly fee (I think it's $60 per machine, I don't remember off-hand) the customer received $58.50/hr labor and two free maintenance visits in which the machines were cleaned out, inspected and had all its software updated. In return, we were first call for any tech problem that customer had. But, while great in theory, keeping track of all the paperwork and renewals got away from my boss, and he wanted to do away with it all together.

I've been thinking of tweaking the program, and re-launching the program in 2011. Our commercial client base is growing at a very comfortable pace and I want that to be a big focus for us in the future. The commercial side can be the most lucrative side of the business for us.

As for the question about chasing payments, we now charge 1.5% per month as a late fee. If it's habitual, I have no qualms about placing a customer on net-15 or payment due upon receipt. We only have a handful of those customers though, and even a few of them, we just won't do business with anymore.

 

[NeutronTech]

Many people will tell you a big load of bull about why business customers should pay more but thats all it is, bull.

The single ONLY reason that people charge businesses more is because they will pay it. Honestly 75% of residential work is harder why don't they pay more.

That's really not fair of you to make that accusation. That is NOT the reason I charge more. If a business computer goes down, it costs them money. I know that and I will drop whatever I am doing in the shop and make them a priority. Residential customers get scheduled. My business rates cover priority service, and my business customers appreciate it greatly. Just about every time I get a call from a business and get onsite, they are astonished at how quickly I responded and thank me repeatedly. They also pay me on the spot, without hesitation, and without me asking them to.

I do not charge them more because I can. I also don't charge home based businesses more money just because they are a business. But if they need me like right now I do. I guess I could just offer a priority package instead, but I don't want regular customers thinking that they aren't important because they don't upgrade to the priority plan. They just see business rates are higher and don't give it another thought.

 

[ATTech]

That's really not fair of you to make that accusation. That is NOT the reason I charge more. If a business computer goes down, it costs them money. I know that and I will drop whatever I am doing in the shop and make them a priority. Residential customers get scheduled. My business rates cover priority service, and my business customers appreciate it greatly. Just about every time I get a call from a business and get onsite, they are astonished at how quickly I responded and thank me repeatedly. They also pay me on the spot, without hesitation, and without me asking them to.

I do not charge them more because I can. I also don't charge home based businesses more money just because they are a business. But if they need me like right now I do. I guess I could just offer a priority package instead, but I don't want regular customers thinking that they aren't important because they don't upgrade to the priority plan. They just see business rates are higher and don't give it another thought.

Do you give them the option of charging less if they don't need priority service? Like if the issue is not mission critical and they can wait a few days for you to come out and look at it?

 

[NeutronTech]

Do you give them the option of charging less if they don't need priority service? Like if the issue is not mission critical and they can wait a few days for you to come out and look at it?

It's not really advertised as such, and I don't ask them, but yes I do. It's a discretionary call. I really don't even advertise commercial rates. I don't list them on my website or in the office. I generally do business work starting at the residential rate and then increase it if the situation warrants. If they want me there right away, then I'll charge my commercial rate. If they don't really care, I will offer to go pick the computer up and bring it back to the shop to save them money. I live in a very small town and it takes just a few minutes to pick up a machine and bring it back. I've had a few opt for that, but usually I end up going on site right away.

 

[minc3d]

For all those that claim business clients should be charged more because their issues are more difficult, using the Exchange example above, doesn't this just mean that likewise you will merely spend MORE time on the problems? So if you are charging an hourly rate, being there longer merely means more income for you? Am I wrong?

So what if I am busting my brains for three hours on an exchange problem or an hr at a residential customer fixing a printer issue. Yes I had more headache at the business customer's location but I got paid for the time I spent - I win either way.

And I am likely to be less lenient with discounts here and there on a job like that, where I was busting my butt. I would charge for all research time away from their office, phone time with any vendors involved, etc, and full travel to the dot.

I think that's enough of a burden to place on a business customer over a residential client. Plus, we all need to remember that our business customers are the ones to likely refer other business clients to us and also bring back the most repeat business... why punish them with a premium rate?

Just my two cents. I am in the process of changing my rates to "normal" levels in my area of the Northwest Chicagoland area and am taking this all into consideration.

 

[minc3d]

I will also add that I just got done doing a competitive analysis of pricing in my area and found that none of my competitors are charging premiums for businesses. That was found from a cold call to about 7 different shops.

 

[NeutronTech]

I will also add that I just got done doing a competitive analysis of pricing in my area and found that none of my competitors are charging premiums for businesses. That was found from a cold call to about 7 different shops.

Maybe they just don't advertise it, like I don't. I actually don't recall a single business customer of mine asking for a quote beforehand. So, I just usually make it up at the end. Then I just usually charge it as a flat rate instead of breaking it down by the hour for them. No one has said anything or given it a second thought so far. But like I said, I'm not really charging business customers more for the type of work because like you said, if it is harder work you will be there longer, hence making more money. I do usually charge a higher rate for the "priority service" so to speak. Again, not advertised as such.

When a business customer calls you, and you go right over and fix it, they are usually so happy that they don't care what it costs. You really can't make a business customer wait, if you can help it, because they could likely be losing money for every minute the computer is down. I am also willing to work on the weekends and evenings for business customers and I don't for residential customers. Sometimes you just can't take down a computer during business hours. I don't charge an after hours rate to them either, so the extra charge in the commercial rates averages out over time to compensate that.

I also shouldn't say that I won't service residential customers after hours, I just haven't offered to for anyone yet. If a customer explicitly requests it, I am pretty likely to do, however, I will probably add a "truck roll" charge to it.

Again, I have thought about just adding a "priority" service or an "after hours service" additional charges, but I don't want the customers thinking they aren't important just because they don't opt for the priority service. However, I am not sure I see a negative image with "after hours" rates. I may consider doing that. Most service companies do.

EDIT: This thread has made me decide to revise my pricing structure. After reading my owns posts, I feel there is too much uncertainty in my onsite pricing. I am going to have to nail down a concrete on site rate system. I am kind of leaning toward a flat rate for onsite work. I don't think I'm going to do a business and commercial, though. I think the way to do it is offer a flat rate repair if I will be working on a single computer. More than one will be charged hourly. Will work on it.

 

[minc3d]

Priority service pricing I do agree with .... a premium so to say. Just like plumbers charge time and a half after hours and on weekends, I think this is more than fair.

And in our industry, I don't think charging a premium for same-day service is unreasonable. If you are breaking other appointments to fit someone in that wants you right away, there should be a surcharge.

I don't know what the best way to handle that is, if it's time and a half or a set flat fee extra... however a set flat fee could be dangerous. If a business client say, takes the $xx surcharge flat fee to grab you in an emergency and then has you do all of their normal other things that aren't emergency related on that same visit, you really are doing other a disservice by pushing them in first for all the small stuff.

I think time and a half is the only fair way to ensure they don't abuse emergency service. Thoughts?