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J. McCabe Plumbing Inc.
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Discussion Starter #1
A couple of days ago, I get a call from a longtime customer of mine. He is the principle of a Private Elementary School. He starts out the conversation by saying there must be a mistake in the hourly wage I charged him for the work we recently completed. I state the rate should say 123.00/hr. He proceeds to tell me this is a lot of money and that in a tough Economy I should not be charging these kind of rates.
I don't have the time to argue with someone who doesn't appreciate the cost of doing business, the professional service and quick response to service he receives, so my only response as we hang up is "OK".
We flat rate or contract bid most of our work but for some longtime repeat customers, T&M is more fair for the both of us. I only charge for the time spent (123.00/hr) and the materials used (plus mark-up).

Getting back to his comment, "in a tough Economy I should not be charging these kind of rates", he almost got a return response asking if the Private school he operates has reduced the tuition (8,000.00/yr) and have the teachers taken a pay cut? Not!

I don't charge based on the economy or the zip code or what others charge. Our rates are based on our cost of doing business, making a profit and staying in business. Pretty sure thats why were all are in business.

I may have lost a customer that day but more importantly he lost a good plumber!


Economy is down. Does anybody really cut the pay of their employees just to satisfy a few customers? I don't think so.


There, I feel better now.
 

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Is it not worth a few minutes of your time to explain to a long time customer why your rates are what they are?

Even if you don't make the sale, sometimes its worth to explain the cost of doing business.

One example of this is up here in Canada on some gas pumps there is a little pie chart showing roughly where your money is going per litre of gasoline. I have found this makes it a little easier to choke down the price of something when you know what you are buying.

Just as long as you dont show up to the customers house in a Cadillac Escalade you should be fine..
 

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What is it with some teachers. They seem to resent a living wage. I remember quoting in advance to pull an ejector and remove the jam and still got read the I should feel guilty act after I charged only what I said. If they'd stop turning out liberal thinkers and voters maybe I could empathize with their plight.
 

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Maybe you should call him up anonymously and tell him you have someone who is interested in coming to their school but with this economy you can't justify with this economy why their rates are so high?
 

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Always Something
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Well, with a good quality client, I would be inclined to discuss things in a general overview, nothing too descriptive. If it was a first time client, I wouldn't waste my time. I am a fan of keeping my clients happy for I am more concerned with the big picture. That said, I do work from time to time on some of my kids teachers houses. I do give them a nice discount...they are teaching my kids for Christ sakes, but that's just a few. if the principal or counslor called.....normal rate plus 30%. I can't stand principals or counslors...I had alot of issues with them growing up.
 

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What is it with some teachers. They seem to resent a living wage. I remember quoting in advance to pull an ejector and remove the jam and still got read the I should feel guilty act after I charged only what I said. If they'd stop turning out liberal thinkers and voters maybe I could empathize with their plight.

Hey Hey HEY!

We're not all liberals:yes:
 

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You took the time here to explain to us why you charge what you charge (and I agree with You) so why not take the time to explain to him why you do. If he is a valued customer don't you think it is worth the time. If you explain to him how much it cost to run your business then he might understand better. I had one customer one time call me to come camera his sewer line and when I gave him the bill of 247 dollars he threw a fit and asked me why so much, I pointed to the camera and ask him how much do you think that machine there cost. He looked at it and said about 1000 dollars lol. I told him try ten times that much plus the cost of maintenance and repair to have it fixed if it breaks down. Then I told him how much my sewer machines were and some of my other tools plus insurance ect ect. He apologized to me and paid his bill. I have been back to his house to do more work and never another complaint.
 

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waterheaterzone.com
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You took the time here to explain to us why you charge what you charge (and I agree with You) so why not take the time to explain to him why you do. If he is a valued customer don't you think it is worth the time. If you explain to him how much it cost to run your business then he might understand better. I had one customer one time call me to come camera his sewer line and when I gave him the bill of 247 dollars he threw a fit and asked me why so much, I pointed to the camera and ask him how much do you think that machine there cost. He looked at it and said about 1000 dollars lol. I told him try ten times that much plus the cost of maintenance and repair to have it fixed if it breaks down. Then I told him how much my sewer machines were and some of my other tools plus insurance ect ect. He apologized to me and paid his bill. I have been back to his house to do more work and never another complaint.
This is how I handle it also. When people question the rates, I just tell them straight some examples of my business expenses. Pointing at the $20,000 worth of tools in the back of every truck always helps them see the point.:thumbsup:
 

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Illinois Licensed Plumber
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This is how I handle it also. When people question the rates, I just tell them straight some examples of my business expenses. Pointing at the $20,000 worth of tools in the back of every truck always helps them see the point.:thumbsup:
I have tried to explain to people the costs to be in a business like ours. Some accept it, others tell me why should they pay for my "poor" decisions on buying expensive equipment.

I did have a long time customer call me and ask me what my rates are. I told him and he said " Oh my, you have not lowered your rates to help your customers in these hard times. Guess I have to call someone else." I said OK have a good day and hung up. The next day he called back begging me to come out. The moron he hired that advertised drain cleaning starting at $65.00 made a mess of things. The $65.00 bandit went to power rod the main line and tore up the backwater valve and got his rod hung up in the line real good.
 

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How many people will understand an efficiency factor. What if I said my business should charge $90/hr if x amount of men do 8 hours billable a day-but since the service industry doesnt run on 100% efficiency I charge $123/hr--like they care about my efficiency. They figured a McDonalds burger flipper at $145(or something like that) per hour on a 27% net profit avg. But no one still cares -they dont want to pay, period. So I dont want them to know anything but if they dont thinks its a fair price that its the same price I charge everyone else, it really is fair and here is why its a good value--this is my working theory that doesnt always work.
 

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Drain Cleaning Specialist
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People have no CLUE.

I'm always questioned on why so much. I explain to them why don't you go into business yourself I always get the response It's to expensive or to risky.
Our equipment is expensive why would I charge $50.00 bucks to camera your line with a 10k camera and drive to your house to do this play in your gem infested fecal matter.

Cable your line with this back breaking machine in your and the rest of your families fecal matter. How much for you to come to my house and do the same job. "I could not get paid enough to do your job it's GROSS"

Now factor our expenses. Advertising, Equipment, upkeep of equipment, Insurance, Van payments, Gas, Repairs, etc. now I ask you what should we charge. $50.00 :laughing::laughing::laughing::laughing: We would be closed.

Risk to our health is worth a lot more than what these people are willing to pay.
We maintain the health of the world at the expense of our health and body. We should be paid a premium. I don't care about the economy, I care about my bills now pay up.
My brothers deserve to be paid for what they do.
P.S "I Hate People.
 

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Hey Hey HEY!

We're not all liberals:yes:
If you mean dont accuse all teachers some arent liberals etc---you are right, I agree
If you mean chin up I know many who arent and am not a liberal--you are right, I agree.........wasnt trying to bigot out here either
If you mean that we all went to school and didnt all turn out liberal...then I would say --dont thank a teacher;)

More than their political persuasion would probably be a touch of the self righteous element that causes them to think they have a right to brow beat price in some form or another--but its amazing that an educated person doesnt think through simple business costs fairly.
 

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How about this:

"I certainly understand what you are saying. Times are tough for a lot of people. But may I point out something that I think is very important? I do not believe that you have the qualifications or the pertinent knowledge necessary to determine what my selling price for my services should be. My price per hour is based upon the costs that I incur and is actually far lower than it should be. In other words, I am already sacrificing because of the poor economy.

"And may I ask you this: did your car payments go down when the economy got worse? Did your city water bill, your power bill go down? How about the cost of your food? Because all those things have gone up for me. It isn't about sympathy. It's about the actual cost of running a business and keeping the doors open.

"What is it that you would like me to do without? How about my truck? Would you like to just come and get me and load my tools in your trunk? Perhaps my telephones. You can just send up a smoke signal. Can I do without an office or a computer? What if I stop stocking material and just go to get it when I need it and charge you for the trip?

"If I wasn't in the phone book, wouldn't you call someone else? If I didn't have good tools, would you accept the shoddy work?

"There are always businesses whose owners do not know the cost of doing business. They have cheaper rates, but they starve their families, their wives work without a paycheck, they never grow into a serious business and they usually go out of business with the first obstacle that comes their way, such as a health issue or unexpected expense.'

Then, after using any or all of that above, finish with:

"I can provide you with good, fast service, high-quality work, and the peace of mind that comes from knowing the job was done right, with quality materials and clean, personable staff."

If that doesn't work, it's time for you to fire him.
 

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Drain Cleaning Specialist
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2,076 Posts
How about this:

"What is it that you would like me to do without? How about my truck? Would you like to just come and get me and load my tools in your trunk? Perhaps my telephones. You can just send up a smoke signal. Can I do without an office or a computer? What if I stop stocking material and just go to get it when I need it and charge you for the trip?


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I love it never thought of it that way.

Sure I will charge less rip out your pipes, Dig up your sewer unblot your clogged toilet and bring it to me and I will fix it no fuel or trip charge.
Who needs a work truck let me put my dirty germ infested drain cables in your trunk. Love it good quote Herk :thumbsup:
 

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What is it with some teachers. They seem to resent a living wage. I remember quoting in advance to pull an ejector and remove the jam and still got read the I should feel guilty act after I charged only what I said. If they'd stop turning out liberal thinkers and voters maybe I could empathize with their plight.

They don't count the liberal vote in Florida, do they?:whistling2:
 

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waterheaterzone.com
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Okay,I'll bite. Try this on: If more people understood that plumbers should be fairly compensated then ther'd be less liberal voters.
:blink:
I don't see the connection. I vote "liberal" and yet I am a successful businessman also. It is not all as one-sided as the extremists like Rush Limbaugh would have you think.:rolleyes:
 

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Jamie
Since I know where you work and what your cost of labor is, my opinion (for what it's worth) is your T & M rate is too low. Next time a customer complains send him the spread sheet you use to compute your costs and selling price. Let him argue with the numbers.
Scott
 
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