It’s time to get “real” about your pricing.
Just got off the phone with Robert Leroux, owner of Tethered Computer Services Inc., here in Langley. They fix computers. But. With a difference. Their hourly rate is just $39, which is great in itself, but get this – their “maximum fee” for in-shop service is just $78, which covers just two hours. Max. Total. Period. That’s it. No exceptions. Are they crazy?
One of our team members recently experienced Tethered service first hand. She couldn’t believe the quality and person-ality of the service she received – and she was completely blown away by the price. (So was I – I’m used to paying a much higher hourly rate, with no ceiling on the total bill – and the sky’s the limit). So. I called Robert and asked him what gives. His response: “These are difficult times, and we decided that we needed to break from the crowd in some way – and this pricing policy made the most sense.”
He explained that they decided to get really “real” with their approach to pricing – acknowledging the truth that while a computer can be in for repair for eight hours or more – most of that time (doing back-ups, for example), does not require hands-on attention from a tech – “so why charge as if it did?” Instead, he decided, why not make low pricing a fabulous differentiator – and generate greater profit by attracting far more work? I think this is a perfect win-win, and a great formula for marketing in a tough economy!
In this case, Robert and his team simply priced their work realistically. “The truth is that the average service requires two hours of a technician’s actual time – so that’s the way we price it,” Robert explained, noting that parts are charged in addition. “We may lose a little (or even a lot) on some jobs, but overall the policy works very well.”
Is this “dangerous marketing?” Of course. There will be jobs that take days of a technician’s time. But if they did their math correctly, it all comes out in the wash.
This story makes me wonder how the rest of us could review our pricing models – looking for realistic ways we could cut costs for our customers – without cutting into our own profits. Tethered Computer Services (20193 56 Avenue, Langley, BC, 604.595.1605) provides a perfect example. What could you do?
See you next time.
NG
Ps – Robert also said their average turnaround time on service is “same day or next day” – with “same day” the goal whenever humanly possible – and he said they seldom go beyond that standard. This gives them yet another huge differentiator, and competitive edge. (Hey, my service guys tell me “two days minimum” – and then try to make me feel like I should be grateful).
Back in the old days, when computers were very expensive, companies with computer work would lease time on a shared computer to run a “job”.
Wow – that’s amazing! I am definitely writing this company’s name down and tucking it away in a safe place!!