What do you think about our pricing scheme?

[Amanda]

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.

I didn't pay for any set-up costs for my laptop... refused all Geek Squad services. Meh... there is room for all kinds of clients

 

[ComputerPro]

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.

On occasion we have had people go to best buy to pick up a product. Not ashamed to say it lol. However, we do tell our clients to DECLINE ANY geek squad offering. We tell them the truth. That they will be approached by an idiot who will recommend a protection plan from geek squad. We tell the say absolutely not. And a big NO to the extra 'prep' pkg or whatever geek squad calls it. We have them 'demand' they get it brand new in an unopened box. Then they bring it to us for our setup new system prep package. We have done this for years and never once lost a customer to best buy (as far as service is concerned). People may not know about the technical side of computing but they aren't dumb. Even they can tell that GS aren't 'real techs' but just glorified salesmen that can read scripts and try to 'up sell' everything.

To be honest I have personal gripe with GS ever since I experienced them from an 'insiders' point of view. This is a few years ago, but I have some friends who were GS agents. We would all go out and they would tell me everything. They were brainwashed. It was the funniest thing in the world to see first hand, you had to be there. But one of them used to sell washers, dryers and other appliances at BB for years. Then he made a 'lateral move' and became a GS agent. We would go to the bar with our friends and he would tell us about the training etc. Showed us the badges they got lol. I don't know if they still use them now? But anyway, he OPENLY ADMITTED that he was very 'new' to the computer repair field and didn't 'really' know what he was doing. Three weeks later....... I stopped in to see him and he had a customer at the GS counter. The customer had his PC on the counter and was asking questions like the best way to secure it and keep it running well etc.... Well my friend was telling him his advice and spewing about how he should do this and do that, and he should buy this security pkg and that software etc. I sat back and was grinning. He saw me and started to grin also. Later he admitted that he was nervous giving advice to the man as he was so new to the repair field.

He then said that they had to 'up sell' approx $500 of product in a week or they would be 'looked at' by management to see if they would work out. He was proud of the fact that he always hit this mark as he was a pretty good salesman from his BB appliance sales days. This was some years ago so I don't know if that's how they do it now to be fair.

He has since been 'laid off' after a year or so there and has told me the inside scoop. He still doesn't see why others 'rag' on GS so much as he literally was brainwashed. He would talk about CIA agents, double agents etc...and when I would laugh he would seriously look at me and wonder what I was chuckling about. It was the craziest thing.

The sad thing is after he was laid off he asked me about working for us but I had to be honest with him. There was NO WAY I could send him out to service clients with his current skill set. He did understand as we do a lot of business support and he was afraid to touch servers/networks anyway.

The moral of the story is GS really does suck and I think most people know it. They should have no problem buying stuff at BB and then bringing that stuff back to you so a 'real tech' can set it up.

 

[ElementalWindX]

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)

man you and I vary quite a bit I tried presenting prices like you did and that lost more people for me.

 

[PCX]

man you and I vary quite a bit I tried presenting prices like you did and that lost more people for me.

All the customers I lost, I did not want. You are going to lose customers with higher prices, thats kind of the point. If I get half the work and make the same or more as I would with lower prices, then I am working smarter, not harder. If with your pricing you are turning just about every potential customer into a customer, then you are too low.

 

[ElementalWindX]

All the customers I lost, I did not want. You are going to lose customers with higher prices, thats kind of the point. If I get half the work and make the same or more as I would with lower prices, then I am working smarter, not harder. If with your pricing you are turning just about every potential customer into a customer, then you are too low.

sorry, couldn't elaborate more like I should have. Had a baby in my arms.

What I meant was that I realized over a years worth of time, when I made my pricing scheme as simple as I could, I net more than if I was to make my pricing scheme have a bunch of "if ands or buts".


Mine goes as such:

General $85/hr on site (I might raise this after my shop opens)
In shop general will be $75/hr starting out. My only other competition in this town charges $75/hr as well.

OS Install is $150 (I'm thinking I'll increase this to $175 when the shop opens as well) and it includes backup, full format, os install, restore of all data (unlimited), os updates, any software they give me, adobe flash/reader/java/msse. I try to make this as turn key as possible so the customer spends less time getting back to the way they were before the virus/event/whatever caused the issue.

Virus removal falls under general hourly rate because almost all my cases I have solved in one hour and that includes doing a tune up as well (which I think should be always included on any virus removal)

Everything else falls under the general rate and things such as ipod screen repairs/laptop screen repairs, I have been good enough in this aspect that I can get it done in an hour and I will actually quote someone $85 + price of part and stick to that price even if I am so slow I end up taking an hour and a half.



I tend to work for the higher clientele and seeing people raising their rates, makes me want to do the same because some times I feel like I do charge less than I should. I just recently upped my rate from $80/hr to $85 in the past few months for the first time in 4-5 years.

 

[PCX]

sorry, couldn't elaborate more like I should have. Had a baby in my arms.

What I meant was that I realized over a years worth of time, when I made my pricing scheme as simple as I could, I net more than if I was to make my pricing scheme have a bunch of "if ands or buts".


Mine goes as such:

General $85/hr on site (I might raise this after my shop opens)
In shop general will be $75/hr starting out. My only other competition in this town charges $75/hr as well.

OS Install is $150 (I'm thinking I'll increase this to $175 when the shop opens as well) and it includes backup, full format, os install, restore of all data (unlimited), os updates, any software they give me, adobe flash/reader/java/msse. I try to make this as turn key as possible so the customer spends less time getting back to the way they were before the virus/event/whatever caused the issue.

Virus removal falls under general hourly rate because almost all my cases I have solved in one hour and that includes doing a tune up as well (which I think should be always included on any virus removal)

Everything else falls under the general rate and things such as ipod screen repairs/laptop screen repairs, I have been good enough in this aspect that I can get it done in an hour and I will actually quote someone $85 + price of part and stick to that price even if I am so slow I end up taking an hour and a half.

Gotcha. Congrats by the way.

So, I thought there was a lot more competition in Wilmington . . . ? Last time I was there, it seemed like there was a shop around every corner. Anyways, If Wilmington is anything like Jacksonville, then you will probably have to change your pricing to flat rates in-shop. Onsite, should be by the hour, which is what you are doing now.

Honestly, I do not have a whole lot of "if ands or buts." Not exactly sure what you mean by that. When I explain to our customers what it costs for repairs, I rarely if ever have anyone confused --if that is what you mean.

Anyways man, I wish you the best of luck. Maybe when you open shop, I will stop on by.

 

[PCX]

I tend to work for the higher clientele and seeing people raising their rates, makes me want to do the same because some times I feel like I do charge less than I should. I just recently upped my rate from $80/hr to $85 in the past few months for the first time in 4-5 years.

Not a bad idea to raise your rates every year or two. Even if it's in relatively small increments.

 

[ElementalWindX]

Gotcha. Congrats by the way.

So, I thought there was a lot more competition in Wilmington . . . ? Last time I was there, it seemed like there was a shop around every corner. Anyways, If Wilmington is anything like Jacksonville, then you will probably have to change your pricing to flat rates in-shop. Onsite, should be by the hour, which is what you are doing now.

Honestly, I do not have a whole lot of "if ands or buts." Not exactly sure what you mean by that. When I explain to our customers what it costs for repairs, I rarely if ever have anyone confused --if that is what you mean.

Anyways man, I wish you the best of luck. Maybe when you open shop, I will stop on by.

I'm in Wallace, 30min from you. It's just me and one other guy in this town. I actually help to put another tech guy out of business who had a well known reputation for stealing computer parts out of his customers computers and sometimes simply flat out lying to the customer and keeping their computer while charging absurdly high "recycle" fees. Needless to say after some prison time to said tech for being an illegal immigrant and a few conversations with the building owner, we kicked him out and I'm moving in. I'm a member of the rotary here and BNI in Wilmington so word has gotten around that he is gone and I am here to stay. Hopefully it will work out for the best. I use to have a shop down on 3rd and red cross in Wilmington (currently CFCC Building X small business center) and with $3,000 overhead just in rent, and 99% of my clients begging me to go on site, I decided to revert to in home business for many years and did it successfully.

Wilmington does have a pc repair shop every corner you turn. It sucks. There are maybe 5 in the whole county that are reputable including mine, but omfg way too many craigslist wanna bes who throw an ad in the book claiming $25 flat rate for this and that. I counted 125 one year. On average there are about 50 of them around.

 

[DocGreen]

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.

Thanks for that. We had raised the rates by 15% about 9 months ago... will probably be raising them again another 10% or so in the next couple months.

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.

Personally, I could care less where they purchase their machines as I don't currently sell them myself. I do make sure customers looking to buy understand how Best Buy works, and make sure they know to refuse anything Best Buy has to offer. Other than that, if a customer wants help with finding, choosing, or purchasing a computer... I will do the best I can to meet their needs while staying within their budget. Most people have zero need for a $500 laptop... all they're going to do with it is get on Facebook and play FarmVille. Think about it like cars. You're not going to try to talk a soccer mom into buying a Porsche if she comes to you looking for advice about a minivan, just because the Porsche is a better vehicle. If a customer does have specific needs-- say they do graphics design, or video editing, gaming, etc... I take those needs into account and if I can't find a suitable machine in their budget I tell 2 things: the best they can get in their budget, and how much they'll need to spend to get what they want.

Right now I'm sitting here on a $250 Acer netbook that I picked up from Walmart... same machine I take with me on service calls. It's a great machine and it does everything I need it to do, and then some. Doesn't matter where the customer buys the PC (with the exception of BB due to GS vultures). What matters is they make an informed purchase, and I do my best to help them do that.


Another point I just thought of... Say customer A buys a bargain laptop for $300, and customer B buys a higher quality laptop with the same specs for $600. Will customer B's laptop last longer? Customer A's laptop may last 4 years before crapping out, while customer B's laptop makes it 8 years. So was it worth it to pay twice as much for the better laptop? Honestly... it wasn't. The reason being, after 4 years BOTH laptops are more or less obsolete. The will both run increasingly slow... not because they are somehow slower than they used to be... but because the software they're running after 4 years is significantly more demanding than the software 4 years prior. And that problem increases exponentially if the laptop is used for any kind of demanding purpose (ie, gaming). You could argue that laptop B has a higher resale value after 4 years, but how many customers actually resell their old computers? Most of my customers either give them away or ask me to recycle them.





One more side note... Now that Amanda is here on the forums with me, it kinda feels like we're ganging up on people. I hope nobody takes it that way.

 

[ElementalWindX]

Another point I just thought of... Say customer A buys a bargain laptop for $300, and customer B buys a higher quality laptop with the same specs for $600. Will customer B's laptop last longer? Customer A's laptop may last 4 years before crapping out, while customer B's laptop makes it 8 years. So was it worth it to pay twice as much for the better laptop? Honestly... it wasn't. The reason being, after 4 years BOTH laptops are more or less obsolete. The will both run increasingly slow... not because they are somehow slower than they used to be... but because the software they're running after 4 years is significantly more demanding than the software 4 years prior. And that problem increases exponentially if the laptop is used for any kind of demanding purpose (ie, gaming). You could argue that laptop B has a higher resale value after 4 years, but how many customers actually resell their old computers? Most of my customers either give them away or ask me to recycle them.

I LOVE these discussions/debates. At a certain price point you are purely paying for reliability and speed. That $300 computer might last to 4 years but most likely won't and you'll feel the urge to replace it more as it gets older, whereas that $600 computer will most likely last to 4 years and you will enjoy using it more every day until that point without the urge to upgrade/replace it.


Such as my $7,000 custom build, it's purely 1st for speed and 2nd for reliability. Of course after the $3,000-4,000 mark it started to become more so for show with the water cooling.

I personally believe you are buying a bar of butter when you are buying a computer. Just like a car and many other items.

 

[DocGreen]

...we kicked him out and I'm moving in. I'm a member of the rotary here and BNI in Wilmington so word has gotten around that he is gone and I am here to stay. Hopefully it will work out for the best...

I've always been told that it's a big no-no to move into a location where the previous tenant was in the same business and had a bad reputation. I guess people see the same type of business in the same location and assume they just re-branded, or they just didn't pay enough attention to the previous business to notice you're not them. I know a mechanic that ran into that problem... he didn't do his research on a location and didn't find out about the reputation until he'd already signed a lease and moved in. (Last mechanic was apparently running a chop shop, and the local police stopped by to make sure the new guy was legit.)

I hope you don't run into any of this. I'm sure you've got enough existing customers out there to at least minimize any negative impact it might have. The right marketing strategy would hopefully be enough to overcome the rest. Best of luck to ya!!

...There are maybe 5 in the whole county that are reputable including mine, but omfg way too many craigslist wanna bes who throw an ad in the book claiming $25 flat rate for this and that. I counted 125 one year. On average there are about 50 of them around.

Same problem here. Seems like everyone who knows how to install Windows thinks they're a computer guy these days. I tend to flag all of them that I see posting in the Computers For Sale category, because technically, that's spam. Doesn't stop them, of course... but it makes me a little happier, lol.

 

[ElementalWindX]

I've always been told that it's a big no-no to move into a location where the previous tenant was in the same business and had a bad reputation. I guess people see the same type of business in the same location and assume they just re-branded, or they just didn't pay enough attention to the previous business to notice you're not them. I know a mechanic that ran into that problem... he didn't do his research on a location and didn't find out about the reputation until he'd already signed a lease and moved in. (Last mechanic was apparently running a chop shop, and the local police stopped by to make sure the new guy was legit.)

I hope you don't run into any of this. I'm sure you've got enough existing customers out there to at least minimize any negative impact it might have. The right marketing strategy would hopefully be enough to overcome the rest. Best of luck to ya!!





Same problem here. Seems like everyone who knows how to install Windows thinks they're a computer guy these days. I tend to flag all of them that I see posting in the Computers For Sale category, because technically, that's spam. Doesn't stop them, of course... but it makes me a little happier, lol.

I agree. It can either be a big risk or a nice gain. Many years ago I bought this business from a owner that drove it so far into the ground he couldn't even feed his own family off it. After the first year I could take care of my entire family with it. Ever since day 1 of planting the signage, which includes "Under new ownership" under it, I have gotten at least 3 phone calls a day for work, and I left 50 business cards at the store while the renovators are working and within 3 days they were all gone. This is a very small tightly knit town and most people already know what is going on between my relationship with the head of the local chamber and the town mayor and others.

I also posted up a few of my written and signed recommendations from previous work over the past several years from local business owners, so that anyone who came to the front door could at least read up on me while the place was being worked on.

 

[ComputerPro]

I think what it boils down to is to set the max price you can for your area and remain competitive. There is no way to compare each of our prices. The areas we are from are vastly different. Pricing must be set for the area and competition period. That's why even large chain stores have different prices depending on the area. The real trick is to find the highest price you can charge but not a penny more.

There are so many factors but the biggest one to me is the competition. For example if you are a decent shop but have 4 larger established shops nearby and you charge more than them just to make more money, then you probably won't survive. UNLESS you are that much better or can do things that the other shops can't do! People aren't stupid, rich or poor. And in todays economy they always look for a bargain. Does that mean that they will always choose the lowest price? Of course not. They want the best VALUE.

Out of all our clients it seems like the doctors are the most frugal with their money. Especially for their home equipment. They might have the most to spend, but they seem to nickel and dime much more than the average customer.

Now if you provide VALUE that justifies higher prices, then your all set. As long as your marketing is good and you can get that out there in your customer base. If the value is basically the same as all the competition then you need to be in line with pricing that reflects that. You will always get the few people who don't care, or don't know any better. But once they find out then you will lose them. Look at geek squad. They were originally very high priced. Lots of people tried them out due to their location and big marketing. But then after finding out that their service is no better (honestly much worse) than the other shops, they usually didn't go back.

We all need to do market study when running or opening a shop. We need to call the competition and find out things like:
How much they charge.
How they handle customers.
Are they pleasant or rude.
Are they knowledgeable.
How is their marketing working out.
etc.

Then we must base our pricing scheme on all these factors.
Think about it this way. Its exactly how customers will think about it.
If we needed our car serviced, we would probably ask our friends etc to recommend a shop. Look in the phone book or online. Then check prices.
If we needed brakes done and shop A quoted $500, shop B quoted $300, and shop C quoted $350, what would you do?

I know I would look at the shops and see if they are busy (good sign), see if they've been around a while, maybe read some reviews if there are any and lastly use my gut. If I got a bad vibe from one of them, I would eliminate them. But I most definitely look at the price and I know most of you would also. If considering the $500 shop, they would need to have something to justify that price difference. If they were no different than the $300 shop then I would never pay the $500.

By the same token, if there were a Craigslist ad (PAY ATTENTION CRAIGSLIST PEOPLE ) that had a ridiculous quote of $90 for the same brake job I DEFINITELY would NOT go there lol. It would be painfully obvious that:

a. they are some kid out his moms basement and my car really deserves better. I don't want to trust my brakes to this kid.
b. their work is so shoddy that's all they can charge as that's what their work is actually worth.
c. it is some scam too good to be true.

That's how most people view the Craigslist guys and its sad that they just don't get it.

Sorry for the rant. Had too much coffee lol. I guess the point is we shouldn't randomly raise/lower our prices because someone else on the forum in a different part of the world did it. The ONLY reason to raise/lower them is to try to hit the magic mark in your area which is 'the highest price you can charge and remain competitive', so when people need service they will have a good reason to go to you over the competition.

 

[DocGreen]

Excellent post, Terry! +1