“How Much Do You Charge?”

“How much do you charge per hour?”

This is a question we get asked by every potential customer.  Sometimes it is the first question, sometimes the last, sometimes in-between.  It is an important question, and one we ourselves ask vendors.

There is sometimes a flaw in the logic behind asking, however, and that’s what we want to discuss.  To use a car analogy, picture it like this:

You’re shopping for a car.  You’ve narrowed it down to three cars you like equally, but they are different vehicles; one is a hybrid, one is an SUV, and one is a normal sedan.

If you’re shopping for a car and you want to know how much fuel is going to cost you, you say “How many miles per gallon does each get?”

It’s perfectly sound logic – you know what gas costs per gallon, so you can do the math yourself.  However, with service, what you are asking when you say “How much do you charge per hour?” it is the same as going to three car dealerships, and saying “How much does a gallon of gas cost?”.  You’re basically assuming all 3 vehicles get identical gas mileage and will therefore get you where you need to go with the same amount of gas, and only the price of fuel is different between gas stations.

That’s not really the case with service, however.  You might end up paying half the price per hour, but the work takes four times as long.  Or it may not get done correctly at all.  Many IT companies in particular are hesitant to answer the “How much do you charge per hour?” question for the following reasons:

  • We don’t always want to share that info with potential competitors masquerading as potential customers
  • There is a general class of customers most service providers tend to avoid, which are only concerned in a very narrow aspect of the cost.  They tend to be high maintenance, slow to pay, and hassle you over the bill.  These customers typically ask “How much do you guys charge an hour?” literally as soon as you answer the phone.  They are completely uninterested in how much experience you have, what your company focuses on, or the quality of your service.
  • “Tire kickers” – to use another car analogy, these are potential customers who don’t know what they want, and probably aren’t going to buy anything from you, or want to build any kind of relationship, but just the same feel the need to ask you long detailed technical questions to end up getting free tech support from you under the guise of window shopping for a new provider.
  • Not everybody pays the same price.  Let’s face it – if you call a service place out of nowhere, wanting emergency service right then, for one hour, and you’re never going to do business with them again, they have to absorb a lot of costs; fuel, travel time, cost of doing business.  You’re going to pay a higher rate.  If we have a long term relationship, you’re going to pay less.
  • It’s not the most important factor in cost.

For us anyhow, the money piece of the equation is settled after other issues.  For a potential customer, what we’re thinking when they describe their situation is “Can we help them improve how their business runs?”.  As they tell us what they do, we’re thinking “OK, these folks could use a shared calendar… They need file storage… They need a faster connection than what they have…” etc.  We’re thinking whether we are able to help, and if they are a good customer for us to take on.  We don’t want to sell a $1000 router to a 5 person shop of architects; they don’t need it.  We also don’t want to sell a $100 router to a 5 person shop of hedge fund traders.  It’s not about selling the most expensive hardware or solution and weeding out the “little guys”; it’s about providing the right solution.

We don’t want to sell you anything; we want to provide service.  We don’t want the hourly rate of our services to be the deciding factor; we want our passion for personalized service that is right for you and your business to be the deciding factor.  And as such, we will do our best to match or beat whatever you’re paying now, or whatever else you are being quoted.  If we can’t match it, or it’s not a service we are able to provide, we will be up front and tell you.

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