Question

Topic: Strategy

Computer Service Pricing Hourly Vs Flat Rate

Posted by Anonymous on 1/20/2006 at 1:26 AM ET 500 Points
I just joined a new venture that is about 9 months out. We do residential & business computer work from high tech stuff to basic pc stuff. In the past we have been charging by the hour and we are going to stay that way on the business side for sure. On the residential side our competition like Geek Squad and Geek On Call charge by the job. Ex. Geek Squad charges $129 for installing a new hd. If we charge by the hour @ say $70-$75 a hour, 1 hour min. Which one would sound better for the customer? A hd install would take about a hour @ the site $70-$75 but we could help them start their OS install to add on another 30 mins or so (Est. $105) Does anyone have an experience with pricing flat rate vs hourly? Should I price flat rate since my competition does? If so what is your feedback?
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  • Posted by mgoodman on 1/20/2006 at 7:59 PM Member
    Lots of businesses have learned that pricing by the hour is bad for the provider and the client. The provider is motivated to be inefficient (and run up the bill), and the client is constantly worried that the meter is ticking and it's costing him money every time the provider takes a sip of coffee.

    One person in your business wrote a comment about this on Amazon.com (as part of a reader review for one of my books). He actually changed his billing method (after reading the book) and increased both his revenue and client satisfaction. Here's what he wrote:

    I am a technical support consultant for personal computers and I had been billing my time out by the hour. This book pointed out that anyone selling their time rather than their talent is just selling a commodity. I took a look at the type of services I provide and realized that I was under pricing my highly technical expertise and not charging at all for a lot of job related items such as travel and purchasing hardware and software items. I completely revised my price list commensurate with the degree of technical difficulty involved and I am now commanding a premium for my services.

    I think that's your answer.

    BTW, if you're interested in some of the other relevant tips in the book, go to the Rasputin For Hire website. You'll be able to preview the table of contents, introduction and chapter 1 there.
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