Pricing strategies

What do you mean by this? It doesn't make any sense to me. How do you lose business by giving up control to others? What does that look like?

Mainly do to lost phone conversions. If the new guy answers the phone as opposed to me, I guess we were losing three jobs /week which translates to $2000/month in lost revenue.

We have worked out some great phone routines built on a habitual answers that are very effective in addressing most phone calls. They are helping a lot.
 
Mainly do to lost phone conversions. If the new guy answers the phone as opposed to me, I guess we were losing three jobs /week which translates to $2000/month in lost revenue.

We have worked out some great phone routines built on a habitual answers that are very effective in addressing most phone calls. They are helping a lot.

Right. He's not quite comfortable in how to sell. Makes sense. That's a fair number of lost opportunities. Hope you can bring him up to speed fast. Maybe you'll need to train him well and sit with him the first while to coach him.
 
Mainly do to lost phone conversions. If the new guy answers the phone as opposed to me, I guess we were losing three jobs /week which translates to $2000/month in lost revenue.

We have worked out some great phone routines built on a habitual answers that are very effective in addressing most phone calls. They are helping a lot.

Right. He's not quite comfortable in how to sell. Makes sense. That's a fair number of lost opportunities. Hope you can bring him up to speed fast. Maybe you'll need to train him well and sit with him the first while to coach him.

I know we are getting a little off topic here, but I just wanted to suggest that you start implementing regular roleplaying with your employees. We do this every week and try to do it every day. We role play different scenarios for both over the counter sales and over the phone sales. Also, if a new tech is about to call a customer for an update or up-sell, we will role play the conversation several times with different responses/outcomes before actually calling the customer.
 
Customer comes in for a 15.6 screen replacement. We charge $175 for the parts and labor ($100 for the part and $75 for the install). Once we have completed the repairs we do a virus scan and system check to see if they need a virus removal, tune-up or both. In many cases, customers also have viruses and in most cases they at least need a tune-up and 9 times out of 10, if they need a virus removal, they also need a tune-up. Once we have completed the initial repairs and we have done our scans, if the customer needs a virus removal and tune-up, we sell them on the service. Guess what, probably 8 out of 10 go forward with those services. This makes our ticket between $250 and $350. Once we have completed this, we then suggest that the customer get a good AV so that they are not having to deal with these issues again in the future. Again, about 8 out of 10 people will make this investment for an additional $75 to $95 dollars making our tickets between $325 and $445.

It's a few things. Different market like you mentioned. But long term strategy as well. I only say that with my experience in my area of course, but if our end price on a laptop screen replacement was $445 it would meet, exceed or at least come very close to 'most' of the laptops who's screens we replace. A typical client (in depressed mid Michigan remember) ALWAYS weighs the cost of a new system against the repair. And the sad part is... I can't blame them! I would probably do the same. If given a choice between getting their older systems screen replaced, a virus scan, tune-up etc for $449 or buying a brand new system with a warranty for the same price, chucking $59 to us for a quick data transfer or $99 for a system setup with data transfer they would always, without fail, opt for the new system option. Which isn't bad, since we are getting the setup/data transfer anyway.

I see your point and to be honest myself and a few of our employees who are great at selling could talk people into the first option but it would come back to haunt us. I say this because we get LOTS of new clients every day from companies like GS etc who have charged a new system price for the repair. It would haunt me what their friends are saying to them after the face. "WHAT, are you crazy, you could have bought a BRAND NEW system for that price" etc. We actually do pretty good even in this economy. But volume is what helps us there and price is a very important part to get us the volume that we do.
In the end its all about balance and goals. Everything is really. If you have something new that no one else can offer... then you can get away with prices that are much higher than all the competition. But... your volume will always increase with lower prices. The magic is when you find the sweet spot where your bottom line is the most it can possibly be during the volume vs price battle.
 
Like a few other posters, I am a mobile tech with a larger percentage of residential customers, but a handful of business customers as well. While my original pricing structure included an hourly rate for most onsite work, I almost never used it. Instead I chose to charge my flat "shop" rate. Mostly, this was out of fear, as I thought that $60 (my original hourly) x anything more than 1 hour would be too much to ask. I've grown up a little since then.

By far the majority of my business if flat rate, but that is by design rather than fear. There are very few repairs I get into that I don't simply walk away with the computer after about 5 minutes. Once I have it on my bench, like most of us, I can work on several machines, increasing my efficiency and profitability. The flat rate gives the customer a level of comfort, and allows me to easily adjust my prices and margins when necessary.

Onsite repairs/installs however, I have been charging an hourly rate. It seemed to be a more sensible thing and most of my customers had no issues with it. Recently, though, I have been trying out a fixed rate onsite charge, based on what experience has told me that particular job will take, time-wise. So if a printer install takes, on average, 30 minutes, I might charge a flat rate that would equate to an hour of my hourly rate. Some installs will take less, some more, but I come out well in the black overall. Clearly, this is an oversimplified example, but the idea is the same for most installs.

Of course, when things get out of hand with unforeseeable issues, my rate goes up. And this is made clear to all my customers ahead of time. This is working for me, but as always, YMMV.
 
It's a few things. Different market like you mentioned. But long term strategy as well. I only say that with my experience in my area of course, but if our end price on a laptop screen replacement was $445 it would meet, exceed or at least come very close to 'most' of the laptops who's screens we replace. A typical client (in depressed mid Michigan remember) ALWAYS weighs the cost of a new system against the repair. And the sad part is... I can't blame them! I would probably do the same. If given a choice between getting their older systems screen replaced, a virus scan, tune-up etc for $449 or buying a brand new system with a warranty for the same price, chucking $59 to us for a quick data transfer or $99 for a system setup with data transfer they would always, without fail, opt for the new system option. Which isn't bad, since we are getting the setup/data transfer anyway.

I see your point and to be honest myself and a few of our employees who are great at selling could talk people into the first option but it would come back to haunt us. I say this because we get LOTS of new clients every day from companies like GS etc who have charged a new system price for the repair. It would haunt me what their friends are saying to them after the face. "WHAT, are you crazy, you could have bought a BRAND NEW system for that price" etc. We actually do pretty good even in this economy. But volume is what helps us there and price is a very important part to get us the volume that we do.
In the end its all about balance and goals. Everything is really. If you have something new that no one else can offer... then you can get away with prices that are much higher than all the competition. But... your volume will always increase with lower prices. The magic is when you find the sweet spot where your bottom line is the most it can possibly be during the volume vs price battle.

Something to consider. A very wise accountant once asked me "would you rather do less work for more money or more work for less money?"

It's a good question.
 
Our big lesson for the year.....is to really move out of "hourly break fix stuff"....and move towards fully managed services.

Pay us to own and manage your IT services and problem.

I'm historically been afraid of trying to sell high priced items. I often trap myself by thinking that a client is afraid of the high price, that they won't pay it..and quickly after quoting them a higher ticket service...I'll drop down to budget services and end up selling those. And then I'm stuck pouring lots of time into a low profit service.

We are finding that the real money making is in pitching higher priced high end services, and even though you get a lot of "turn aways" that won't pay that...the couple of good clients that will pay that, will pave the road for you in gold.

You end up working less, and making much more money. Rather than scrambling around 900 hours a week for chicken scratch.

I highly...highly encourage you guys to sign up and attending those webinars that your RRM packages are constantly giving, and talk to your RMM sales rep at least once a month. Our N-Able guy is really getting us to rethink our business model this year, and the stuff he has us doing, is proving to be worth it.

Their latest push...since they've changed their bundled backup product from CA to StorageCraft....is offering "managed backup" services for servers that has a value of ~150/month....just to sit and monitor it. That is not including the backup software license, nor the hardware, nor the offsite backup costs! Those are additional...just to "manage" the backup for servers....yeah...150 bucks a month per server. And IT companies are getting these rates out there! So why not you and I?

Other services, like the security patch manager...I had been afraid of pushing that service...but I've been pitching that to clients that we feel need it, and it's been selling.

Pitch higher prices for your services and expertise...pitch flat rates, turn it into rich recurring revenue.

...or the alternative...bust your butt crazy hours per week to compete with all the other cheap places out there with "has been" services and technology filled with menial time consuming labor.
 
We do a lot of standard rate pricing unless on site. If on site then it is $99.99 per hour in homes or $120 if in a business or server environments.

In shop we are $49.99 for the first 30 minutes of repair/diag and if we fix something simple for that, that is it. After that it goes to $59.99 per hour but standard rates for example a format/reinstall 2 hrs (on top of the $49.99) and then 3rd hour for installation and updates of security packs, service packs, antivirus and antimalware software or load clients applications/printers and such.

We also charge $99.99 for backup of data.

We usually average about 3.5 hrs on a complete re-installation with security and another $99 for backups. We try to get 4 computers a day at about $230-300 ea.

We have a few customers go some place else as our prices are too rich for their blood but we also have most customers appreciate the same day service, the extra mile approach we take (free pickup on any job and free drop off when over $200).

We decrapafy OEM installations to speed up systems, we optimize and tune up new installations as well.

We also upsell hard drives, memory, even Motherboard/cpu/ram combos.

Often people prefer to keep their old system and upgrade it to buying a new crap system for $298 from walmart.

It has been our montra since about 2004 that I would rather the shop do 4 computers a day and do a very good quality job, know each client by name, double check everything works perfectly, picup or drop off and every other manner of courtesy for our clients then take 10 computers a day and have 2 1/2 times the number of possible mistakes, falling through the cracks and such.

On a busy day we have had $3000 in labor only days. On a slow normal day we might see $500 labor only as a typical day. But we have days when we do not see a customer or only see one customer and make $200-300. That reminds you to upsell upgrades, new computers and services.

But I believe it a mistake to fix 10-20 computers a day at $20, 40, 50, 80 and work your tales off and your employees tales and possibly have a $1000 day. That is just silliness IMO.
 
In our business we have 4 types of billing rates. Granted our customer base is all business, we do no residential. (Too needy for our liking)

We offer the typical break/fix at $150/hr all with a 1 hour min. Then we move onto the block time billing where we will bill out a customer for 30 hours at a discounted rate, this must be paid in full to take advantage of the pricing.

Next we offer a managed service contract for customers, and this can be spun off in multiple ways. We have some customers who only want us to monitor servers, workstations, etc.. and that is fine and we charge per machine/server we monitor. Then bill out at a discounted rate to fix the challenge.

We then offer a fully managed solution, which includes cloud based exchange email hosting, offsite backup solutions, web hosting, and onsite/remote services all included for a monthly fee. We can usually sell this solution when a customer has been with us for a short time say 3-6 months.

During the 3-6 months it allows us to build a trust relationship with the customer, once the customer feels that you are that guy/company they can rely on, it make it easier for them to open their check book and spend a little more for reliable service.

Finally we do a flat quote system for any large project we do, when doing this some fluff must be added for unseen challenges.

What I have learned over the last 15 years in the business, is you have to be willing to walk away from a potential customer who doesn't fit your business model. The last thing anyone wants to do is to waste his/her time, and then arguing with the customer about billing or having to chase money.
 
Our big lesson for the year.....is to really move out of "hourly break fix stuff"....and move towards fully managed services.

Pay us to own and manage your IT services and problem.



Pitch higher prices for your services and expertise...pitch flat rates, turn it into rich recurring revenue.

...or the alternative...bust your butt crazy hours per week to compete with all the other cheap places out there with "has been" services and technology filled with menial time consuming labor.

Can you elaborate on this please? Im really thinking about what your saying here, even thinking of renting machines fully managed say$80/mo per computer and $100/mo per server..thoughts?
 
Clients would still pay for their own hardware.
Rates we're shooting for for the "fully managed all your can eat plans"...49 bucks/workstation/month, 195/server/month, 29/edge device/month. This covers antivirus, patch management, remote support, onsite support, routine maintenance, asset tracking, adding/removing/setting up users, all the usual stuff. Does not include backup. Does not include costs of hardware.

This is just a "starting point" price....subject to changes depending on other factors.

We also have a "hybrid plan", about 60% of the price above, includes all of the above except onsite. Onsite is billed hourly.
 
Please look at this page http://roseburghelpdesk.com/services/prices/ and tell me what you think.

I charge 1 hr min and then by 1/2 hour but I know how long things take and usually quote a flat rate.

I think that my pricing is good for my area. Since I don't have a walk-in shop I am trying to really figure out how to gain customers. Problem is most shops in the area do not even post their prices on the website but most have been in business for a long time and still are today. I'm not sure if I should really do a full price revamp or not.

I've read all post in this thread and need a full review of my prices page above and get a good review.

Need to know anything else let me know.
 
Please look at this page http://roseburghelpdesk.com/services/prices/ and tell me what you think.

I charge 1 hr min and then by 1/2 hour but I know how long things take and usually quote a flat rate.

I think that my pricing is good for my area. Since I don't have a walk-in shop I am trying to really figure out how to gain customers. Problem is most shops in the area do not even post their prices on the website but most have been in business for a long time and still are today. I'm not sure if I should really do a full price revamp or not.

I've read all post in this thread and need a full review of my prices page above and get a good review.

Need to know anything else let me know.

Those prices seem waaaay to low to me. But I don't know your demographics. Around my area you would be entering the realm of the craigslist guys.
 
We price hourly when onsite, flat rate when I take it back to my office. But, the flat rate is determined at the time I quote it...if I think it's going to be three hours of my time, that determines the rate I quote. Nothing advertised on this.

As to hourly rates, I've had a program to raise rates I can over the last six years. I started out at $75/hr, a bit above where local competition is. As I went on, gained experience and a feel for the clients, it went to $85/hr, and the following year about $95/hr. Now I'm at $110/hr. However, these new prices are always introduced to new clients only, so I don't have to talk about a price increase. The ones that started out at the lower rates keep that rate if I continue to see them regularly; after a break of a year or more it's the higher rate. An exception...I keep it at $95 for new clients within the community, that is, my zip code, and charge the higher rate outside of it. So, now all but two clients are on $95 or $110.

I think the main thing I've learned is, for price increases, a steady influx of new clients makes it easier to implement. And, if the service is outstanding, it doesn't matter much how the competition prices.
 
Great read here- lots of good info.

For me Hourly Rates = Break Fix and when people talk about Fixed Pricing = your talking about Managed Services
For me Managed Services is ultimately where my focus is as its reoccurring revenue.
Customers love fixed pricing because they know what to expect and can budget their IT.

I also try to avoid low price break/fix rates. You really make life hard for yourself and have to work twice as hard to make up for selling yourself short.
For me i believe making the Break/Fix rates slightly higher than your managed service rates - Show the customers why its beneficial for them to sign up to your managed services plans.
Dont undersell your services - A lot of techs think to themselves i cant be too high the customers wont pay= you will be surprised how many people pay for awesome customer services. Just go above and beyond you expectations and they are happy to pay. Also if you start out high you can always discount- Start low its harder to increase.
However for me I'm a strong believer that low prices attract customers you really don't need. All they see is the low price and will screw you for every cent.
When i sense low price customers im not afraid to turn them away- they end up costing you money/time - Its ok to say no once in a while.
You want clients..clients that are happy to have you manage their business and look after their needs and pay the managed service price for you to do this.
 
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