What do you think about our pricing scheme?

[TenYardFight]

Crazy how IDENTICAL this is to how we work. Prices are the same too!

 

[Magic Miguel]

It all depends on where you are located. I know of one relatively well known shop charging $199 for virus removal and data backup and they make out like bandits. They also have a well known name though and are established so people don't hesitate to pay the $199.

 

[PCX]

Might as well post some of our prices

Virus removal (includes no tune-up) $100 - Probably going to raise that price soon.

Tune-up: $75 - Gets dropped down to $50 with a virus removal. We up-sell this with just about every virus removal we do and we up-sell this to about 7 out of 10 "other" repairs for $75

Windows Reinstall for Vista, 7, 8 (no data backup and transfer) $150
Windows Reinstall for XP (no data backup and transfer) $100

Data transfer to include ALL data as well as settings and preferences $100, $50 when when a customer is doing a N&P or HDD replacement

Data transfer for just pictures and documents $50

Screen Replacements are typically about $200 to $250 depending on size and difficulty/time required.

Power jack replacements $150 to $180 depending on whether or not the part is plug in play or has to be soldered. The only exception to this is the Asus G52,53 and G72,73 gaming laptops, we do these for $250

That makes up a great majority of the services we do other than phones, which we are pretty competitive on for our area. Other than that, most of you already know that we charge a diagnostic fee up front before every repair.

General Diagnostic $50
Extensive Diagnostic $75 (also for macs)

 

[rjframe]

Under the "Choose Rex" page, you list "Virus Scan Includes Backup" but under pricing you only back up if they pay $40?


[The top menu doesn't work properly in Opera, and the menu height is about 3x what IE shows, making it rather ugly; if you have clients using Opera (not really likely) you may want to look at it]

 

[hightechrex]

It's very interesting to see what everyone is charging. Its really got me thinking. I saw someone mention that 200 boarders on the new pc territory. The magic of it is that the subscription can be used on 3 computers. So even if they get a new pc... it'll be protected as well. Just a little bonus to sweeten the deal and I think people would bite.

 

[Rosco]

i charge $75.00 flat rate for pickup or my hourly rate on site

200 would be a hard sell around hear. Believe it or not 75 for pick is quite expensive around here. i call all the shops i respect and we all charge about the same. i am more on some stuff and less on others.

A couple of shops that have been around a lot longer than me only charge 45 for a screen replacement. makes it hard on the rest of us

 

[PCX]

A couple of shops that have been around a lot longer than me only charge 45 for a screen replacement. makes it hard on the rest of us

Those are the type of shops that I aim to put out of business. Unless they are doing mass volume of screen replacements, there is no real good reason to charge so little. Desperation, shady practices, corner cutting, price wars (bad business practice) and using used parts instead of new (and not telling the customer) are usually typical of shops who charge so little. I know it seems hard now, but charge what you are worth and let everyone else suffer from their lower prices. You just need to make sure that everyone has a reason to pay more for your services rather than go somewhere cheaper --that can be the hard part. A great majority of what allows you to do that is your reputation.

 

[Rosco]

Those are the type of shops that I aim to put out of business. Unless they are doing mass volume of screen replacements, there is no real good reason to charge so little. Desperation, shady practices, corner cutting, price wars (bad business practice) and using used parts instead of new (and not telling the customer) are usually typical of shops who charge so little. I know it seems hard now, but charge what you are worth and let everyone else suffer from their lower prices. You just need to make sure that everyone has a reason to pay more for your services rather than go somewhere cheaper --that can be the hard part. A great majority of what allows you to do that is your reputation.

i thought heavily about lowering my prices but i only charge 75 for a screen replacement. I ended up staying strong. About half the people that call about it hang up. I didnt pull that number out of my hat. i takes time to remove screen, find replacement, order and everything else needed to make sure it works right. I probably still make more than the rest. I have doubled my average monthly income this year. I charge fair prices with great service so i can eat and so can my customers! i have about 85 to 90 percent repeat business.

 

[PCX]

i thought heavily about lowering my prices but i only charge 75 for a screen replacement. I ended up staying strong. About half the people that call about it hang up. I didnt pull that number out of my hat. i takes time to remove screen, find replacement, order and everything else needed to make sure it works right. I probably still make more than the rest. I have doubled my average monthly income this year. I charge fair prices with great service so i can eat and so can my customers! i have about 85 to 90 percent repeat business.

Remember, it is better to work smarter not harder. While everyone else has to do a ton of work just to make a decent profit, you can cut your work in half with your prices and make just as much if not more and be able to take the additional time to grow your business. If you have any level of success, your prices will effect the market and you will help to bring up the market average. When other shops and repair businesses see that you are able to charge more and be successful, they will eventually raise their prices as well (at least the smart ones who want to stay in business) even if it is only by a little bit.

 

[Rosco]

Remember, it is better to work smarter not harder. While everyone else has to do a ton of work just to make a decent profit, you can cut your work in half with your prices and make just as much if not more and be able to take the additional time to grow your business. If you have any level of success, your prices will effect the market and you will help to bring up the market average. When other shops and repair businesses see that you are able to charge more and be successful, they will eventually raise their prices as well (at least the smart ones who want to stay in business) even if it is only by a little bit.

Im an trying. Actually a lot of what i do is because of yours and others posts. Since i have beefed up my diag i work a lot less and make more money. I have seen a lot of shops come and go in the 4 years i have been in business. There is only a few stores i believe are real competition. Def on the higher end.

Its hard with tons of people on craiglist only charge 10 an hour for onsite. i charge 25 for residential pickup an hour. But i work on 2 or 3 at a time. I have outlasted most and i plan to make it! thanks to everyone on here for your great help!

 

[DocGreen]

I charge $87.50 for a screen replacement. (basically 3 hrs labor at $28.75/hr) I don't think it's ever taken me 3 hours to replace a screen... but there have been a couple HP's that seemed to take forever because you had to almost completely disassemble them to get the screen off.

I'll probably end up changing the rate for that (and maybe other services) as I increase my hourly rate down the road.

 

[PCX]

I charge $87.50 for a screen replacement. (basically 3 hrs labor at $28.75/hr) I don't think it's ever taken me 3 hours to replace a screen... but there have been a couple HP's that seemed to take forever because you had to almost completely disassemble them to get the screen off.

I'll probably end up changing the rate for that (and maybe other services) as I increase my hourly rate down the road.

Yeah, you most definitely need to change your hourly rate if you want to make it as a business. Your hourly rate (depending on area) should probably be at least $50 to $100 an hour for residential. That said, many areas work better with flat rate services.

 

[Amanda]

Yeah, you most definitely need to change your hourly rate if you want to make it as a business. Your hourly rate (depending on area) should probably be at least $50 to $100 an hour for residential. That said, many areas work better with flat rate services.

While I would agree that our residential rate needs to come up a bit, our bread and butter has been business clientele. I would be hesitant to bring our rate up to $100 an hour for residential services. At that rate... if I was the consumer, I would just buy a new PC. I tend to push for pricing that is reasonable to the Average Joe in our marketplace.

 

[DocGreen]

Yeah, you most definitely need to change your hourly rate if you want to make it as a business. Your hourly rate (depending on area) should probably be at least $50 to $100 an hour for residential. That said, many areas work better with flat rate services.

Here's the thing... we're a small shop. We don't have a store front, and we're really just getting started. I have every intention of raising our hourly rate as our customer base grows, but for now the focus is getting a leg up on the competition. Why choose the new guy you've never heard of who doesn't even have a store versus the other established guys? Price! Our biggest competitors charge around $40-$50/hr, and those competitors are serious players... with serious budgets.

You're right about flat rate pricing, and we use that. But I designed the flat rate pricing based on the hourly rate... this service should take this long to do, that service should take that long to do, and so on. And yes, customers do respond well to it.


Another point I want to make is that we use a tiered pricing system: $28.75 for residential... $50.00 for small business (no servers, simple networks)... and $100 for businesses (servers, complex networks).

Before you say "OMG your business rates are way too low!!" I should tell you that our biggest competition in that market charges $200/hr and is THE company to call for business IT services. From a business client's standpoint, they're taking a considerable leap of faith calling us. We're nobody as far as their concerned, and they're essentially handing us the keys to their business... but cost can be a huge motivator. Also, the competition is (generally) more experienced than we are, and are able to perform the work faster.


My point here is there are a LOT of factors to include... and while I respect and value your input, I don't exactly feel that you're qualified to recommend pricing for my market and my region. No offense, of course. As for making it as a business... we've not only survived the first year, we've closed the year out in the green. Most businesses don't see any profit for the first several years.

 

[altrenda]

While I would agree that our residential rate needs to come up a bit, our bread and butter has been business clientele. I would be hesitant to bring our rate up to $100 an hour for residential services. At that rate... if I was the consumer, I would just buy a new PC. I tend to push for pricing that is reasonable to the Average Joe in our marketplace.

We charge a minimum $100 per hour for everything. Virus removal is at least $150. And we fix a lot more computers than we replace. To me, the fix/buy new line is at least $500. Where can the client get a decent computer, with all their software, data, networking, printers, etc. configured for less than that? Unless they buy some Walmart bottom feeder special. And our clients usually wouldn't be happy with that type machine.

I realize that all areas are different, but we price for the type of clients we want to work with and try not to be the lowest. There are a lot of guys in LA charging $25 -$50 an hour. They don't seem to last long. We would rather compete on our service than on price.

 

[altrenda]

Congratulations on a profitable first year!
You're right, only you know your market and competition, but there are a some things that are the same everywhere. If your sole or main attraction is price, you become known as a low price company and it might be hard to raise your prices without losing your base.

But you guys seem to know what you're doing. Don't sell yourself short on competing with the Big Boys. If they were perfect, they would have all the business,and I'm guessing they don't. There should be enough customers that want your style of service.

 

[TenYardFight]

Here's the thing... we're a small shop. We don't have a store front, and we're really just getting started. I have every intention of raising our hourly rate as our customer base grows, but for now the focus is getting a leg up on the competition. Why choose the new guy you've never heard of who doesn't even have a store versus the other established guys? Price! Our biggest competitors charge around $40-$50/hr, and those competitors are serious players... with serious budgets.

You're right about flat rate pricing, and we use that. But I designed the flat rate pricing based on the hourly rate... this service should take this long to do, that service should take that long to do, and so on. And yes, customers do respond well to it.


Another point I want to make is that we use a tiered pricing system: $28.75 for residential... $50.00 for small business (no servers, simple networks)... and $100 for businesses (servers, complex networks).

Before you say "OMG your business rates are way too low!!" I should tell you that our biggest competition in that market charges $200/hr and is THE company to call for business IT services. From a business client's standpoint, they're taking a considerable leap of faith calling us. We're nobody as far as their concerned, and they're essentially handing us the keys to their business... but cost can be a huge motivator. Also, the competition is (generally) more experienced than we are, and are able to perform the work faster.


My point here is there are a LOT of factors to include... and while I respect and value your input, I don't exactly feel that you're qualified to recommend pricing for my market and my region. No offense, of course. As for making it as a business... we've not only survived the first year, we've closed the year out in the green. Most businesses don't see any profit for the first several years.

Couple things. Like Altrenda said, you'd be surprised that the fix/buy line is higher than you'd expect. Early on we had to train ourselves to let the customer make that call. Quote them the repair. That's it. (Unless they ask). I'm still surprised sometimes.

Secondly, I can already tell you both are sharp businesspeople and you are good at marketing. I would suggest not competing on price. If you're as good in person as you are coming across online, people will begin to know and trust you and pay market rates for your services. It might be too late, that's your call, but imagine if only half of your customers would pay twice your rate. Half of your time could now be spent marketing and doing BizDev. You'll soon fill your schedule and hire more techs, and so on and so on. You'll also build a business that has VALUE, which means you can sell it someday if you so choose.

Lastly, I gotta say, just for grins... Being in the black in a service business when you have no store front is pretty much a given, right?

Now if you both paid yourself a salary equal to what you could have made in a 1040 job with your skillset, that's another story. When you can do that and put profit to the bottom line, NOW you have a business!

At any rate, great start!

 

[Amanda]

We charge a minimum $100 per hour for everything. Virus removal is at least $150. And we fix a lot more computers than we replace. To me, the fix/buy new line is at least $500. Where can the client get a decent computer, with all their software, data, networking, printers, etc. configured for less than that? Unless they buy some Walmart bottom feeder special. And our clients usually wouldn't be happy with that type machine.

I realize that all areas are different, but we price for the type of clients we want to work with and try not to be the lowest. There are a lot of guys in LA charging $25 -$50 an hour. They don't seem to last long. We would rather compete on our service than on price.

We aren't in LA. We are in a small town in Northern Indiana. $500 for a new computer? Where are you shopping? I got my laptop, which is a decent basic model, at Best Buy for $250. As it stands, if something major happened I would replace it before repairing since it's 3 years old.

Every market is different. Before we opened and were setting prices, we did a market survey... we shopped the competition. What were they doing well... what did they suck at? Our pricing and marketing strategy is based off those findings.

I also understand the pricing for the client you want... and we do that. Our goal is the business client. The residential client is just icing on the cake.

However I do appreciate the thoughts regarding pricing structure. I do enjoy hearing how others are pricing.

 

[DocGreen]

I've been very conscious about when it's "too late" to raise prices... part of me says never. I mean, they can continue to come to me and pay my new prices, or they can have their neighbor's friend's uncle try to fix their computer... and end up coming back to me anyways. The way I look at our prices is, they are introductory prices. We're starting out low because we want to grow the customer base quickly and get our name out there. Once we can afford to keep up with the competition on advertising, we won't need that angle. I plan to (continue) steadily increasing our rates as our base grows until we're equal to our competition's rates (or maybe slightly more... depending.) Our existing customers already know about our "introductory" rates, and each time the rate is raised, they are given advance notice so that they can schedule a service at the current rate.
Oh... on a side note: I don't consider the bargin-basement guys to be competition. We're not looking for customers on Craigslist. We consider the competition to be brick & mortar business with established brand recognition.

As for the idea of making a profit without a storefront...

I am meticulous with my bookkeeping. Any expense that can be considerd a business expense is accounted for. Office supplies, vehicle expenses & mileage, internet service, equipment, inventory, advertising, marketing materials, uniform shirts, etc... even a portion (as determined by federal tax law) of our rent and utilities is considered a business expense and calculated in that figure. Hell, if I meet a customer at Starbucks and decide to grab a Mocha... that's a business expense.

To be completely honest, I was very very surprised to find out we came out ahead considering how much we put into the business. Yes, we do have a much lower overhead than a brick & mortar store... but that doesn't mean the business doesn't incur a significant amount of expense. And not only that, but having a brick & mortar store doesn't mean I automatically get to pull a paycheck. This isn't a job... I get what's leftover after ALL the expenses are covered. And I tell ya what, I've spent the entire last year with money in my pocket, so... I'm gonna call it a win!

 

[altrenda]

Don't misunderstand. You guys are not doing it wrong. Your ahead of most people at this stage. You could just be doing it a little more right.

If you are confident that you can raise your prices (I think we all agree with you) look at it this way. If for the past year you charged 20% more, how much business would you have lost? maybe 5%? If so, that other 15% would have been pure profit.

Amanda, I would not recommend a $250 Best Buy special to my clients for a number of reasons. Besides the technical reasons, if they bought from Best Buy, then the Geek Squad gets the data transfer and set up fees (I think around $100 for set up and data transfer) instead of me and they are no longer my customer, at least until the warranty runs out.

It's better for my client and me if they go with a higher quality, better performing Dell or Lenovo and I do the setup, transfer, network and email configuration, etc. At the end of the day, they've spent $500 but are much better off and call me the next time they need something.