residentian and commercial costumers fees

[NeutronTech]

The value of anyone's experience is what someone else is willing to pay for that expertise. Nothing more or less. Based on what you are saying, if I were an employee and got a promotion and salary increase, any tasks that I do now, that I also used to do before, I should get paid at the old, lower, rate, even though, because of my experience, I may be faster at them, better at them, and more productive all around. Do you really believe that?

Are you faster, better at repairing computers now than when you started? If so, why?

If you are faster, you are saving the customer money, but you have a dilemma. If you retain the same customer base, you are making less money, because you are finishing more quickly. You can either go find more customers, or increase your rates, or some combination thereof.

Increasing your skillset doesn't mean the old skills stay static. They will improve as well. It's ok to charge more for that. You have to make a living also.

Rick

No, I don't believe that. You are reversing what I am saying. Your assuming I meant to lower your commercial rates. I never once said to lower your rates. I said the point is to charge everyone the same, in reality increasing your prices for the residential sector. Which means if your commercial customers are willing to pay you at rate X for your services then that is what you've determined your value is. So your worth X, but your losing money yourself because you are charging residential X-Y.

I also never said the surgeon is wrong. But you did. You say a skilled professional (computer tech or surgeon) should only charge what they are worth when using their higher level skills. If a computer tech lowers his price for the residential because it requires less skill, then that is saying the same thing as a surgeon lowering his rates when not doing surgery. The surgeon should charge the same rate no matter what he is doing because his experience doesn't change. So should the computer tech.

Reality is that I can charge whatever I want, and the customer can agree to pay or not.

This is absolutely correct. So why charge less?

Your trying to spin this around. Glass half empty or full? Are you charging your residential customers less or your commercial ones more? If you bumped your residential customers up to the commercial rate, then they are charged the same and you make more money all the way around. You are going to use your complete skillset in either sector. It doesn't matter how frequently. But you should charge for all of your skillsets. By charging residential less, you are not charging them for your more advanced knowledge, even though you'll likely be using it.

 

[maclaptech]

I charge everyone the same flat fee... I tend to get extra business from the same client when they see that I charge a fair flat fee.

 

[red12049]

No, but you do. If you say you charge a business more because it requires more skill and experience to work with them, then that is the same and charging a resident less because it doesn't require as much skill and experience. If you're charging based on skill and experience, then you shouldn't have a reduced rate to your residential clients. But you do. Why? Because they aren't as willing to pay the higher rates that you charge businesses. Which brings me back to my original point, you are charging businesses more because they are willing pay it.

This is what I posted above:

The reason for the targeting, I believe, is mere convenience. It would be rare, I think to stumble on a home user (not SOHO) who was running SBS2008, and if you did, chances are it would be used as a workstation, with that type of a problem, rather than as a server. Lesser rates would apply.

If I walk into a small Mom & Pop retail store with a single box used as a POS, I charge normal rates, unless I had to rush out there. On the other hand, if I walk into a retail store with six POS stations, SBS 2003 in the back with a few more back office systems, and secure PCI compliant wireless, you better believe I'm going to charge him for my painfully acquired skills to get him back up and running, without breaking something else in the process.

If I know more, I can charge more when the situation requires it. The client gladly pays for that increased knowledge and skill set.

Rick

I charge a business (or anyone, for that matter) more when their situation demands it. Yes, market realities come in to play. I'd be foolish to suggest otherwise.

So, question for you. Why do you think that businesses are willing to pay more?

Rick

 

[red12049]

No, I don't believe that. You are reversing what I am saying. Your assuming I meant to lower your commercial rates. I never once said to lower your rates. I said the point is to charge everyone the same, in reality increasing your prices for the residential sector. Which means if your commercial customers are willing to pay you at rate X for your services then that is what you've determined your value is. So your worth X, but your losing money yourself because you are charging residential X-Y.

I also never said the surgeon is wrong. But you did. You say a skilled professional (computer tech or surgeon) should only charge what they are worth when using their higher level skills. If a computer tech lowers his price for the residential because it requires less skill, then that is saying the same thing as a surgeon lowering his rates when not doing surgery. The surgeon should charge the same rate no matter what he is doing because his experience doesn't change. So should the computer tech.



This is absolutely correct. So why charge less?

Your trying to spin this around. Glass half empty or full? Are you charging your residential customers less or your commercial ones more? If you bumped your residential customers up to the commercial rate, then they are charged the same and you make more money all the way around. You are going to use your complete skillset in either sector. It doesn't matter how frequently. But you should charge for all of your skillsets. By charging residential less, you are not charging them for your more advanced knowledge, even though you'll likely be using it.

Because the value of my experience is worth exactly what someone will pay for it, no more or less, that's why. A residential customer values my experience at less than certain business customers. I said in another post that if I could charge the same to everyone, I would. I'm not so foolish as to ignore market realities.

Actually, most surgeons have an office rate, and a "surgery" rate. The office rate is usually less. There are many IT businesses that focus on B2B relationships, and do no residential work. They charge whatever they charge. For those of us who don't/can't focus that way, charging a different rate as the situation demands is a good alternative.

I have no problem with anyone charging whatever they feel like. You won't find me joining in on the "pizza tech" threads. For those that charge too little, the realities of life will soon show them the errors of their ways. My reason for posting is the opinion of some here that it is morally/ethically wrong to charge different rates for using different portions of your skillset. Not so.

I asked this question of another poster... Why do you think businesses are willing to pay more?

Rick

 

[MrUnknown]

So, some good points are made.

Yes, you have the same skills if you are working on a residential client's computer as you do when working on a business' server.

And technically, if you want to say you are charging businesses more because they can afford it, you would be right to a certain degree.

In our line of work, we are always trying to charge for what we are worth. A business IT consultant can earn $120 - $200+ per hour when they are working with a business. A residential client does not want or need this level of service and they will not pay for it.

If we want both audiences, then we need to cater to each one in a different way.

This is no different than Intel disabling some features of a CPU and calling it a Celeron. Or Autotask charging $30/mo for up to 3 clients in order to market and target the smaller businesses out there. Or I can buy the same thing from Hong Kong for $2 that costs $15 here. Or Microsoft Office Academic version being $35 when it is normally $120. It is the same thing with different pricing depending on the market.

If you solely services business clients, you would not have rates that residential clients would pay. You are just trying to accomidate them.

What about the businesses here that have employees? What if I hire someone who would probably blow up a server before fixing it, but he is excellent with residential type work? Should I charge my residential clients business rates eventhough he is working on their computer? It would then no longer be about what I am worth, but what the work performed is worth.

I want to re-state, if you are doing real business level work (and that is the key phrase, real business level work) for residential rates, you are selling yourself short and not charging what you should be charging for the skills you have.

 

[ATTech]

And technically, if you want to say you are charging businesses more because they can afford it, you would be right to a certain degree.

No need to qualify, it all boils down to charging more because they will pay more, it's as simple as that. I never claimed it wasn't a sound business practice, nor is it necessarily "bad" just simply that you are kidding yourselves if you are saying that it's because of different skills and abilities.

If you are charging more for working on exchange servers, thin clients, etc, then you aren't charging more to businesses; you are charging differently based on the service you are providing, which again, is perfectly fine. If you walk into a business to remove a virus from a computer, then you have two options: charge your business rates because they are willing to pay more, or charge them the same rate as residential because of the work provided.

 

[NeutronTech]

Yeah, I'm not arguing the moral stance. I was simply saying that more experience and higher skill sets isn't justifying charging a higher fee to business, and a lower one to residential. That seems to be what people were arguing as to why they charge a higher price to commercial. The fact is, as has been pointed out by some, that commercial rates are higher because they value it more, meaning they will pay more.

Simply put, you charge commercial more because you can and they will pay it.

Yet, many posted that is not why they charge more and started saying it was because of experience, then later contradicted themselves proving the original point.

Bottom line is that you, do in fact, charge more to businesses because you can. My reason for charging higher for them was because of the priority service. Which, I guess if you dig deep enough you can say the same thing about me. I just automatically jump and go to a business and charge more for it, even though they didn't explicitly ask me to. I do it because I know that their computers are critical to operation, and assume they will pay me more for that level of service. Even though they might not realize they are getting priority over others. Still, it has nothing to do with experience.

When the accusation that techs were charging more to business because they can, those techs should have just said 'yup'. Instead an intense argument went on for pages about experience and what not, resulting in those techs finally saying that they do charge more because they can.

EDIT: You beet me to it ATTech. You posted while I was typing.

 

[MrUnknown]

ATTech got it right:

"If you are charging more for working on exchange servers, thin clients, etc, then you aren't charging more to businesses; you are charging differently based on the service you are providing, which again, is perfectly fine."

I think the issue is more of a misunderstanding. When you say Business Client, I am thinking servers, networking, UTM devices, VPNs, etc. Not "Firefox won't launch." and so my responses were in regards to that which requires more skill and should command a higher pay.

When the accusation that techs were charging more to business because they can, those techs should have just said 'yup'. Instead an intense argument went on for pages about experience and what not, resulting in those techs finally saying that they do charge more because they can.

I certainly hope you aren't referring to me. I have done plenty of work for business clients at my standard rates and rarely ever use my business rates.

 

[NeutronTech]

ATTech got it right:

"If you are charging more for working on exchange servers, thin clients, etc, then you aren't charging more to businesses; you are charging differently based on the service you are providing, which again, is perfectly fine."

I think the issue is more of a misunderstanding. When you say Business Client, I am thinking servers, networking, UTM devices, VPNs, etc. Not "Firefox won't launch." and so my responses were in regards to that which requires more skill and should command a higher pay.



I certainly hope you aren't referring to me. I have done plenty of work for business clients at my standard rates and rarely ever use my business rates.

No, I wasn't referring to you. What I'm saying is that charging a server customer more because your using more skills isn't really true because even on residential customers, your server knowledge plays a part in your "normal" repairs. You can't ignore that knowledge. Whether you realize it or not, your residential customers are benefiting from the total sum of all your knowledge and experience, not just that particular problem.

I understand what your saying. I really do. It's just that really, you are charging more because you can. The customer is willing to pay more for server work so you charge more. The fact is, that you still are not charging them more because of your experience, because that experience follows you on every job you do.

There's nothing wrong with it, at all. I think more experience does demand more money. But it doesn't make sense to charge based on what skills you are using on a single particular job, because it is impossible to separate your skills like that. It's just a justification to charge a customer more that is willing to pay more.

I don't understand the defensiveness being displayed here. What you charge and how you do it, is up to you. There is no right or wrong way. If you want to, you can charge customers different rates based on the first letter of their name. It's up to you. The justification that your charging more because your using more skills on that job isn't wrong, it just isn't possible to separate your skills to be able to charge in such a way.

 

[MrUnknown]

There is defensiveness when you tell me I am charging more to one person over another just because "I can," because it is completely wrong. I take offense to it because I don't want to be accused of it.

It is what the service is worth, and I charge accordingly. If a home user had an Exchange server, he would get charged the same higher rates.

The proper sentence is "I am charging more because it is worth it."

 

[pceinc]

This thread made me reconsider my fees. I decided to start charging residential customers the same rate that I charge my commercial clients.

 

[red12049]

No, I wasn't referring to you. What I'm saying is that charging a server customer more because your using more skills isn't really true because even on residential customers, your server knowledge plays a part in your "normal" repairs. You can't ignore that knowledge. Whether you realize it or not, your residential customers are benefiting from the total sum of all your knowledge and experience, not just that particular problem.

I understand what your saying. I really do. It's just that really, you are charging more because you can. The customer is willing to pay more for server work so you charge more. The fact is, that you still are not charging them more because of your experience, because that experience follows you on every job you do.

There's nothing wrong with it, at all. I think more experience does demand more money. But it doesn't make sense to charge based on what skills you are using on a single particular job, because it is impossible to separate your skills like that. It's just a justification to charge a customer more that is willing to pay more.

I don't understand the defensiveness being displayed here. What you charge and how you do it, is up to you. There is no right or wrong way. If you want to, you can charge customers different rates based on the first letter of their name. It's up to you. The justification that your charging more because your using more skills on that job isn't wrong, it just isn't possible to separate your skills to be able to charge in such a way.

It may not be possible to separate skillsets, but it is certainly possible to separate knowledge. I may bring my "server knowledge" with me to a simpler job (where it may or may not come into play), but what about the guy with no server knowledge? What does he bring to that server work? He may be fine with certain work, but he's gonna be "not so good" at servers. I paid to attain that knowledge, and I charge for it no matter where a server is located, as long as it is being used as a server. It so happens that the majority of servers are located at businesses. It so happens that the majority of "time critical" jobs are located at businesses.

When you ask someone, they'll simply indicate that they charge businesses more, rather than break out each individual circumstance.

Funny that no one answered the question of why businesses were wsilling to pay more.

Rick

 

[ATTech]

Funny that no one answered the question of why businesses were wsilling to pay more.[/QUOTE
Because it's not coming out of their own pocket, I thought that was common knowledge.

 

[red12049]

Funny that no one answered the question of why businesses were wsilling to pay more.[/QUOTE
Because it's not coming out of their own pocket, I thought that was common knowledge.

Do I take that to mean that you don't consider yourself a business then?

Rick

 

[vdub12]

I kind of stopped flowing this tread and it apparently became a hot topic.

My whole point is charging different rates is first confusing for the customer in many cases and second I still don't find the resons people claim to be doing it as truth full.

Heres why.

Say a customer has an exchange server that takes you an hour to fix. Then on your way out the door a printer stops working and it takes you an hour to fix.

If you are basing your hourly rate by the type of work your doing then the hour spent with the printer should be cheaper. However, if you charge the customer the full business price for both hours then you are charging them more because they will pay more.

On the subject of residential charges being cheaper due to experience level needed. Say I have two appointments in one day. Both turn out to be a bad stick of ram. One is with a grandma down the street that needs to e-mail her grandchildren and the other is a local call center that has a whole office of telemarketers with nothing to do because the thermal server has a bad stick of ram.

Should the call center be charged more? If so why? Because it takes more knowledge to diagnose a bad stick of ram in win2k3 then it does in win7? No it doesn't take any more experience to diagnose that problem. However, that call center will not question a higher bill like the grandma will. Therefor the charge is purely because they will pay more.

 

[NeutronTech]

I kind of stopped flowing this tread and it apparently became a hot topic.

My whole point is charging different rates is first confusing for the customer in many cases and second I still don't find the resons people claim to be doing it as truth full.

Heres why.

Say a customer has an exchange server that takes you an hour to fix. Then on your way out the door a printer stops working and it takes you an hour to fix.

If you are basing your hourly rate by the type of work your doing then the hour spent with the printer should be cheaper. However, if you charge the customer the full business price for both hours then you are charging them more because they will pay more.

On the subject of residential charges being cheaper due to experience level needed. Say I have two appointments in one day. Both turn out to be a bad stick of ram. One is with a grandma down the street that needs to e-mail her grandchildren and the other is a local call center that has a whole office of telemarketers with nothing to do because the thermal server has a bad stick of ram.

Should the call center be charged more? If so why? Because it takes more knowledge to diagnose a bad stick of ram in win2k3 then it does in win7? No it doesn't take any more experience to diagnose that problem. However, that call center will not question a higher bill like the grandma will. Therefor the charge is purely because they will pay more.

That seems pretty clear to me. I don't think anyone is understanding what I'm trying to say.

If your going to charge customer's based on the skill level required of the job, then why does a virus removal cost the same as a Photoshop installation?

Why does it cost more for a business to get a virus removed than a home?

There is defensiveness when you tell me I am charging more to one person over another just because "I can," because it is completely wrong. I take offense to it because I don't want to be accused of it.

It is what the service is worth, and I charge accordingly. If a home user had an Exchange server, he would get charged the same higher rates.

The proper sentence is "I am charging more because it is worth it."

If I understand what is being said, the extra knowledge of how to repair servers increases your worth. I agree. So then, why not charge residential customers the same as commercial? Because residential customers aren't willing to pay that much? Doesn't that mean that, the commercial customers are? Hence meaning that your charging businesses that much because you can.

No matter how you try and spin it, you would not charge businesses more money if they weren't willing to pay it. The fact is that you know that they are willing to pay that rate, and residential won't. So that's why you charge them more. It is true that your charging based on your experience. However, business customers value your service more and are willing to pay more, so you charge them more.

There's nothing to be defensive about. There is nothing wrong with it. I'm not accusing you of doing anything wrong. You're acting like I am accusing of you of cheating your customers. I am not, and you are not cheating anyone. Your services are just worth more to a business, so you charge them more.

To clarify that, you are worth what someone is willing to pay. So saying that 'a business values your service more than a home user' is the same as saying 'a business is willing to pay more for your services than a home user', and because of that you charge them more.

 

[red12049]

That seems pretty clear to me. I don't think anyone is understanding what I'm trying to say.

If your going to charge customer's based on the skill level required of the job, then why does a virus removal cost the same as a Photoshop installation?

Why does it cost more for a business to get a virus removed than a home?





If I understand what is being said, the extra knowledge of how to repair servers increases your worth. I agree. So then, why not charge residential customers the same as commercial? Because residential customers aren't willing to pay that much? Doesn't that mean that, the commercial customers are? Hence meaning that your charging businesses that much because you can.

No matter how you try and spin it, you would not charge businesses more money if they weren't willing to pay it. The fact is that you know that they are willing to pay that rate, and residential won't. So that's why you charge them more. It is true that your charging based on your experience. However, business customers value your service more and are willing to pay more, so you charge them more.

There's nothing to be defensive about. There is nothing wrong with it. I'm not accusing you of doing anything wrong. You're acting like I am accusing of you of cheating your customers. I am not, and you are not cheating anyone. Your services are just worth more to a business, so you charge them more.

To clarify that, you are worth what someone is willing to pay. So saying that 'a business values your service more than a home user' is the same as saying 'a business is willing to pay more for your services than a home user', and because of that you charge them more.

Defensive probably because, until this post, you sounded much like VDub above, who claims that charging different rates is "not being truthful." He then sets up a very unlikely scenario to "prove" his statement (no offense, VDub, it's a common practice).

How many call centers do you know that would wait for a tech while their whole operation was down, without at least trying to find some assistance elsewhere? How many do you know that would call and simply accept "I'll be there later" without at least trying to impress upon the tech the severity of the situation? I don't know of many.

And that's why businesses frequently get charged more. There is a much greater value to their time. Even for an individual, mobile tech....Might you be willing to pay a little more to have your vehicle repaired in a more timely fashion to get back to making an income? Do you check other repair facilities if your normal shop can't fit you in?

For those who think that an easy job should be charged at less per hour than a complicated job: Does your doctor charge you less to diagnose a cold than he does to diagnose something more severe? Does your mechanic charge you less per hour to fix a plug wire than to rebuild your engine? I will guarantee that an HVAC serviceman will charge more to fix industrial equipment than a home system, even though the skills involved are similar.

Since no one really bothered to answer the question of why businesses are usually willing to pay more, it is because the VALUE of the repair/service usually far exceeds the cost of that repair/service, to that business. You can apply that to your own situation as well. I've already mentioned the vehicle scenario. How many would be more willing to pay something extra to have their heat expediently fixed on a -30F night, than during the summer? My bet is most would. Think about it.

Rick

 

[CPU]

Our fees are in house and remote at a set rate, then 20 more for on site, then 30 more for business under contract. If they are not under contract they are under normal rates given the service type but they are also in a queue where contracts get a guaranteed window.

Please take a minute to help me out here http://www.technibble.com/forums/showthread.php?t=19869

 

[ATTech]

Do I take that to mean that you don't consider yourself a business then?

We're not dealing with absolutes here. I'm not claiming that in order to be a business, the money you spend has to come out of your pocket. That's applicable to most scenarios, not every scenario. For the sole-proprietorship who hires us and whose money IS coming out of their own pocket, I'd argue that they wouldn't be as willing to pay us as much.

 

[ATTech]

Defensive probably because, until this post, you sounded much like VDub above, who claims that charging different rates is "not being truthful." He then sets up a very unlikely scenario to "prove" his statement (no offense, VDub, it's a common practice).

How many call centers do you know that would wait for a tech while their whole operation was down, without at least trying to find some assistance elsewhere? How many do you know that would call and simply accept "I'll be there later" without at least trying to impress upon the tech the severity of the situation? I don't know of many.

And that's why businesses frequently get charged more. There is a much greater value to their time. Even for an individual, mobile tech....Might you be willing to pay a little more to have your vehicle repaired in a more timely fashion to get back to making an income? Do you check other repair facilities if your normal shop can't fit you in?

You're talking about charging more for priority service, not about charging more based on the nature of the client. If a business needs me to come out immediately to fix a mission critical issue, then I would be charging them more for priority service. If that same business called me and said he had a few issues that needed to be looked at, but to come out at my convenience, then charging them that same rate that I previously charged them would be because they are willing to pay it.

For those who think that an easy job should be charged at less per hour than a complicated job: Does your doctor charge you less to diagnose a cold than he does to diagnose something more severe? Does your mechanic charge you less per hour to fix a plug wire than to rebuild your engine? I will guarantee that an HVAC serviceman will charge more to fix industrial equipment than a home system, even though the skills involved are similar.

You realize that the people who believe that are those who charge different rates, right? You're just arguing our point for us. I don't expect the Master Electrician to charge a lower hourly rate because the issue is simple, so why should I expect a computer technician to charge me less just because my virus problems aren't as complicated as business X's exchange issues?

Since no one really bothered to answer the question of why businesses are usually willing to pay more,

You mean nobody bothered to provide you with the answer YOU WANTED. I gave you a reason.

it is because the VALUE of the repair/service usually far exceeds the cost of that repair/service, to that business. You can apply that to your own situation as well. I've already mentioned the vehicle scenario. How many would be more willing to pay something extra to have their heat expediently fixed on a -30F night, than during the summer? My bet is most would. Think about it.

Bolded the keyword. Again, your're charging for priority service.

Rick

You know you can just add that to your signature instead of posting it every time, right?