Notifying Clients of a Call-Out Charge

[allanc]

I am seriously thinking of adding a call-out charge to my on-site invoices.
A couple of questions:
1. The wording - what is the proper phrase to use from the clients' viewpoint? 'Call-out', 'travel', 'trip charge', etc.
Or, should the first hour be more expensive?
2. Should I advise my existing clients? If so, does anyone have a sample Email or letter? Some of my clients have been using my services for over 20 years.

All suggestions are appreciated.

 

[Xander]

If you are on-site only, just raise your rates.

If you offer on-site and in-shop, raise your on-site rates and give them the choice.

If you're looking at doing an extra charge for those beyond a certain distance, I'd stick to terms they immediately would recognize like "travel surcharge" or "out-of-area fee". I'd only notify existing customers out of area.

 

[allanc]

If you are on-site only, just raise your rates.

If you offer on-site and in-shop, raise your on-site rates and give them the choice.

If you're looking at doing an extra charge for those beyond a certain distance, I'd stick to terms they immediately would recognize like "travel surcharge" or "out-of-area fee". I'd only notify existing customers out of area.

I do on-site and in-shop.
My on-site is already $10 higher.

We are almost neighbours
Many of my clients are in downtown Toronto which is probably .75 hours with no traffic and 1.25 hours with traffic.
How long do you travel before travelling a travel charge and how much is it (if I may ask).
I think that we are far enough away from each that we do not have to worry.

 

[Xander]

I do 20km before I look at an out-of-area charge of $20 (so, Welland/Fort Erie/Grimsby basically). I'm only doing that for new customers; the few I have in Welland stay the same and the only one I have in Ft Erie, his company insists on paying travel time and mileage and I gratefully accept.

Onsite, I'm still cheap @ $60 (but I stayed at $45 for too long and don't want to go up too fast). In-shop, I'm competitive at $45. Any specials I'm offering are in-shop to encourage more people to come to me.

 

[Appleby]

I have a 1 hour minimum charge if I go on-site. If customers request an on-site visit I nicely explain that I'll be glad to come out and that my rate is $XX/hr and I charge a 1 hour minimum for all on-site work. Work past 1 hour is billed at the same hourly rate and pro-rated at the 15 minute mark. So if I'm there for 1.5 hours, that is all they pay for...not 2 full hours. If I'm there 20 minutes...it's 1 full hour charge.

This is pretty much expected and I've never had a business customer balk. Plumbers, electricians and all other service people do this and it's very standard. All I have to charge for is my time, it's valuable. Gasoline is getting more expensive by the day, the wear and tear on my truck is not free. I have to charge just to stay in business. I think that's understandable to most.

 

[allanc]

I have a 1 hour minimum charge if I go on-site. If customers request an on-site visit I nicely explain that I'll be glad to come out and that my rate is $XX/hr and I charge a 1 hour minimum for all on-site work. Work past 1 hour is billed at the same hourly rate and pro-rated at the 15 minute mark. So if I'm there for 1.5 hours, that is all they pay for...not 2 full hours. If I'm there 20 minutes...it's 1 full hour charge.

This is pretty much expected and I've never had a business customer balk. Plumbers, electricians and all other service people do this and it's very standard. All I have to charge for is my time, it's valuable. Gasoline is getting more expensive by the day, the wear and tear on my truck is not free. I have to charge just to stay in business. I think that's understandable to most.

That is similar to my policy except that I have started charging .5 hour increments after the first hour (used to be .25 hour steps).
Like I said above in the thread ... if I am onsite for 1 hour and have traveled another 1.5 hours round trip - then my effective rate is $30/hour ($75/2.5).
The price of gas and wear/tear is not even included in the above.

 

[Mr.Mike]

I have a 1 hour minimum charge if I go on-site. If customers request an on-site visit I nicely explain that I'll be glad to come out and that my rate is $XX/hr and I charge a 1 hour minimum for all on-site work. Work past 1 hour is billed at the same hourly rate and pro-rated at the 15 minute mark. So if I'm there for 1.5 hours, that is all they pay for...not 2 full hours. If I'm there 20 minutes...it's 1 full hour charge.

This is pretty much expected and I've never had a business customer balk. Plumbers, electricians and all other service people do this and it's very standard. All I have to charge for is my time, it's valuable. Gasoline is getting more expensive by the day, the wear and tear on my truck is not free. I have to charge just to stay in business. I think that's understandable to most.

I would have to agree with Appleby on this. However, I do not feel comfortable charging for a full hour for 20 minutes. If we are talking a fair distance away, say 30-40 miles round-trip, I would definately tack on an extra charge. Gas is $4.35 per gallon here. My flat rate is $75/per hour on site and I pro-rate in half-hour increments. My travel limit is 50 miles r/t. That may seem large, but I live in a relatively rural area and I cusally add another $10 charge to cover travel expenses. Also, at 5 cents per mile, I can deduct total work miles traveled from my taxes.

 

[Kitten Kong]

I charge pr hour whilst onsite at £45 for the first hour, then 15 min intervals at £11.25. Workshop based work is all done price per job.

I have to admit I do not cover a great distance. Certainly no where near 30+ mins drive you guys have to do.. Most of my clients are around 2-5 miles from me.

With diesel prices here being close to £6.00 pr gallon, I charge an extra £10 per call out, irrespective of if im doing 1 or 5 jobs a night. This call out charge basically covers me, if I need to bring their pc back to base, and then deliver and set it up again.

Although most of my clients bring their machines direct to the workshop, which saves me time and money. Also saves my clients money also.

 

[Appleby]

I would have to agree with Appleby on this. However, I do not feel comfortable charging for a full hour for 20 minutes

I fully understand this and I struggle with this myself. There are many times I'm lenient on this and will cut someone some slack. I rarely do it with business unless I was really there only a few mins and they are a really good customer OR I'm doing a big project for them and I might make a few quick stops while I'm in the area etc. I won't charge them an hour for each of those obviously.

What I've gotten into when not charging the full service call fee is this...a few times, being nice, I haven't charged it. Then I've had the same customer call and say "Hey I've got this little problem, I know it will only take you 5 mins. Why don't you come on out and I can give you $20." Now what? I can't say that I stick to my fees all the time etc because they were the beneficiary of my generosity last time. It puts me in a very sticky situation when I've got to say, "No I'm sorry I've got to charge my full fee." And if I do agree to some kind of break, not what is going to happen next time? I've set a precedence and it's my fault.

But again, I'm a softy at times. I drove 18 miles one way to a new customer's place one day and it was an elderly couple who was sure their machine was dead. From the sound of it, I thought they had a video card problem or maybe a PSU problem because they said the machine sounded like it was running but the screen was blank. They had hooked and unhooked the monitor etc. I go out there and press the power button on the monitor (which I asked them about on the phone) and presto, it came on. I charged them 1/2 hour because I felt so bad and they ended up paying for for 3/4 hr and trying to pay me for the whole hour. So yes I do break my own rules at times, but for the most part I stick to them.

I think the one thing that makes it easier for me to stick to my rule is this...I offer everyone the option of bringing their pc in, even if they call requesting on-site service. I explain the charges and tell them if they bring it to me, it will obviously be much cheaper if it's a 15 minute fix. They know going in what my fees are and it's not a surprise. They know they are taking the chance of it being a quick fix but for alot of people, unhooking their machine, loading it up, driving 15 minutes, dropping it off, coming back to get it, driving back home, hooking it back up....its worth the gamble to have me come out.

 

[Xander]

I've got no problem charging my one hour minimum. If it sounds that simple on the phone (and we all know it isn't always), I'll add, "And if it goes well, since I'm there for an hour anyway, I really don't mind looking your computer over for a quick tune-up. I like to make sure you get your money's worth."

My average customer is 20 minutes away in this city. That's 40 mins round trip plus whatever time on-site ... there's no way I'm taking $20 for around an hour's time.

 

[allanc]

I've got no problem charging my one hour minimum. If it sounds that simple on the phone (and we all know it isn't always), I'll add, "And if it goes well, since I'm there for an hour anyway, I really don't mind looking your computer over for a quick tune-up. I like to make sure you get your money's worth."

My average customer is 20 minutes away in this city. That's 40 mins round trip plus whatever time on-site ... there's no way I'm taking $20 for around an hour's time.

My biggest client (at this point) is actually a group of small business spread out through Toronto and surrounding area.
I know for a fact that other 'trades' charge them something for their travel.
This could be in the form of a travel charge, more expensive first hour, truck charge, etc.
My clients have accepted these call-out fees as part of the trades' industry method of billing.
Shouldn't we do the same?

 

[Xander]

It might work for some areas and trades. I think, when there's enough competition in the immediate area, it might not wash as well. If you're called out to Creemore to fix a server, I'm sure they wouldn't bat an eye over a travel charge. But if you're removing "MS Removal Tool" at Yonge and Bathhurst, 3 doors down from "Charlie's PC Fixit Shop"....?

 

[allanc]

It might work for some areas and trades. I think, when there's enough competition in the immediate area, it might not wash as well. If you're called out to Creemore to fix a server, I'm sure they wouldn't bat an eye over a travel charge. But if you're removing "MS Removal Tool" at Yonge and Bathhurst, 3 doors down from "Charlie's PC Fixit Shop"....?

There are many plumbers that you can find in Toronto through the Yellow Pages, Canada 411, Search Engine, etc.
I think that many would service a location such as Bathurst and Finch.
I also think that the vast majority will charge travel one way or the other.

 

[Fixedathome.com]

I do the following:
0-6 Miles Free call-out.
6-12 Miles £10 call-out.
12-18 Miles £20 call-out.

I also charge a minimum of 1 hour (£40) per visit and then per 15 minutes. I usually phrase it something like " There is a minimum charge of £40 that covers the first hour, after that it is £10 per 15 minutes" and if they are outside of my free call out area I'll add "As you are outside of my free callout zone there is also a £10 callout charge to cover travel time and fuel". As I'm starting to push remote support more this is where I will offer them remote as an alternative option.

Things to think about here.

Travel time is dead time. Whilst you are travelling to a job you are not earning money. If you are driving for half an hour or more to a job then that's an hours chargeable time lost. You can counter this by upping your rates and charging call-out fees but you will never earn the full amount for that time.

Not charging a full hour minimum is bad business in my eyes. When you book an appointment slot for a customer you are taking that slot away from another potential customer. So charging for half an hour means you have lost the other half hour unless the jobs are all next door to each other. If it only takes you 15 minutes to complete the job then ask if there is anything else you can do and offer a quick tune up.

 

[ittechsc]

Interesting topic. Bottom line is that when you're on-site, you can only work with that single customer. When you're in the shop you can work on multiple items. If I have to go on-site, I charge a much higher rate for the first hour and then my regular rate for additional hours. If the computer boots and the client has a working internet connection I try to explain how a remote session might be the best solution as the problem could most likely be resolved in a more timely manner. If they don't want to do remote I then recommend bringing into the shop for diagnosis. If the client wants an on-site visit, I explain the cost savings by bringing it into the shop. I always try and do remote or in-shop as that's where the customer will get the best service and the best price.

 

[roborobs computer repair]

With diesel prices here being close to £6.00 pr gallon, I charge an extra £10 per call out, irrespective of if im doing 1 or 5 jobs a night. This call out charge basically covers me, if I need to bring their pc back to base, and then deliver and set it up again.

Although most of my clients bring their machines direct to the workshop, which saves me time and money. Also saves my clients money also.

If gas is that high the customer is not saving any money by bringing you the computer they are just paying it to someone else. If you figure 2 gallons per round trip they are actually paying you less to come to them than for them to bring their machine to you, if they have a diesel.

 

[Xander]

There are many plumbers that you can find in Toronto through the Yellow Pages, Canada 411, Search Engine, etc.
I think that many would service a location such as Bathurst and Finch.
I also think that the vast majority will charge travel one way or the other.

I don't know Toronto so I just pulled two street names out of the air. As for plumbers, no argument, but I think that we techs, as a service industry, aren't at that level of recognition yet.

My point is that, if it's basically local, I think we should absorb it in our rates and charge extra when the client knows there's travel to be done.

I also look at it this way: It's not the customer's fault that I live where I do. My city is ~150K people and takes about 20 minutes to go from any side to the other. If I live on the south end and I get a call from the north end -- the guy is just calling a local number and I could live around the corner for all he knows. My rate already reflects (local) travel costs. (I need to raise it again next year but that's another matter)

 

[TimJacobs]

As for plumbers, no argument, but I think that we techs, as a service industry, aren't at that level of recognition yet.

Me personally, I don't really think we as techs will ever be at that level........

 

[Appleby]

Me personally, I don't really think we as techs will ever be at that level........

I agree, because it's so easy to start a repair business and the start up costs can be extremely low. They are not business people and have no idea of the real costs to run a business. Therefore they set their prices way too low and think that they will build a business solely because of price. They will undercharge for their services until they go broke and find another job....or go back to their "real" full time job. Then another new tech with the same mentality will take his place.

This makes it more difficult for the rest of us to charge the rates we need to to not only survive but make a decent living and expand our businesses. It also makes it difficult for us to be treated as equals with the rest of the service industry.

This is NOT a bash on small startups...I was one and I'm still a small 1 man band operation with no desire to expand. But I do want to be treated with the same respect by my customers as a plumbers, mechanics and other repair people.

 

[TimJacobs]

But I do want to be treated with the same respect by my customers as a plumbers, mechanics and other repair people.

I agree.......... We Fix the things that have all their precious memories and all their accounting books and without us they could loose ALOT of it......

No one gives us techs the respect we deserve.........