ECN Forum Forums General Topics of the Trade Business Related Discussion Justifying your Estomate

I think we all get the price shopping phone calls or even estomates where the customer wants to question your rates. It normaly starts like:
-How much do you charge to cut in a cieling fan?
$220 or $200 more than 1.
-Whats your labor rate?
$70 per hour.
-How long will this job take?
With 2 electricians about an hour a fan.
-Why so long, I only need this, and that?
-Then how much does that parts cost?
They are included.
-Why would you charge me $220 if it only takes an hour?


I am guessing their are 2 answers to this:

1. That is our price. We provide the the best of service. When can I schedule you? No..
Then have a nice day.

Just get the person off the phone cause they are waisting you time or not the customer you want. Or has anyone turned around they call to $$?

2. We need to charge this to pay for insurance, taxes, overhead, etc..
Some seem like they sugest to take is so far as to say this is my costs.

Like some one elce said you might as well show them your taxes to show your not getting rich. The idea is tying to educate the customer. I don't know if this really does any good except to lower yourself to cry poor. Most peolple have everything provided for them at their job. You say $70 an hour and they think an uneducated person tring to get much more than they make in their great job. They have no concept of costs. With out getting out you monthly accountant statments they proibly will not believe you.

Educating them is not really not the point. They just want a deal.

If there is no deal then they might start on how someone elce is cheaper or just call the next guy in the book.

Mabe the real answer to to not provide a labor rate to the customer. Like:

Labor Rate, the nice thing is we don't have one cause we charge by the job.

The same type of customer wants it both ways. A fixed price before. But then they want it by the hour if it's less.

Tom

Tom
You hit it right on the head.I'll try to use answer #2 when possible ,to a point.It is amazing though that some supposed smart folks out there think 100% of your rate is all profit.I had a "phone shopper" the other day.Wanted to know my "hourly rate" for a house addition when I told them that a flat price would be better so everyone would know the costs involved, they snapped back "just give my your hourly rate and I know how long it should take you,and we'll provide the materials too."Told her we were way to busy.
LOL
Andy

For jobs like this we charge a flat rate, therefore we cant'/won't break out an hourly rate. If the job takes 2 hours or 10 we charge the same amount. We will explain to the customer a little about overhead and travel time and insurance, but generally the customer you described doesn't care about any of that so you're wasting your time. They will find someone to do it cheaply.

we just go at a flat rate system that charges for the service call annd the labor and material. we only give such detailed info for those price shoppers. most of the time just flat rate quote and servic charge and your paid out the door.

also it does seem that people are not wanting to pay for anything anymore they want everything for free or dirt cheap. you may quote 50 an hour labor and some crapy hack will quote 49.98 and win the job.

Yes, I've run into customers that talks like a little bird ("cheap! cheap!).

I just run the other way.

Had a woman who bought an old house, her insurance co would not issue a homeowners policy because it had K&T wiring. I did a thorough inspection (on a fee-for-service basis) and recommended a few selective upgrades, as the K&T was in good shape. She pressed for an estimate to do a total re-wire. I bid it on the high side, as it had a tight crawl space and the living space itself was overfilled with furniture and clutter.

I FAXed a written bid to her, and didn't hear back. I left a followup message about a week later and another three weeks later. Heard nothing back.

Six months later, she calls and wants to schedule the re-wire right away, but what can I do to lower the cost? You know, the Wal-Mart customer mentality.

I tell her to check the bid, the price was valid for 60 days, and prices have gone up because materials prices are soaring. I'm busy for the next two months, and the price has gone from $11,500 to $14,000. I haven't heard back from her, and that's fine with me.

I usually weed out the cheapskates by telling them "no free bids". I'll talk to them for a few minutes to get an idea of the job, and give a rough estimate (non-binding)of the cost over the phone. Anything more detailed, like a written bid for fixed-price work, I charge for. Usually I map the circuits and do some safety checks (branch circuit voltage drop measurements, GFCI performance checks, both with the Ideal Sure-Test) if I'm there to survey a job to write up a bid. The client feels they're getting something of value in addition to the bid, and they are.

If someone doesn't want to pay me to work up a bid, I tell 'em that I do it so that my clients don't pay for window shoppers and lookie-loos, because I have to recover the cost of that time and effort one way or the other.

For an extablished client, of course, I don't charge for estimates.

I'm interested in doing work that's high-profit, rather than high-volume, low-profit work. So far, so good.

Cliff