what do you do when someone calls asking for your hourly rate?

[huggytree]

Ive done this subject before, but its been a while

ive gotten 2 calls in 2 days asking for my hourly wage....they dont mention a job or anything....just 'hello, how much per hour do you charge?'

im always shocked....most homeowner jobs are 1-2 hours...so if im $10 more per hour its just $10-20 more....who chooses a professional trademan over $10?

when i first went into business i gave them the $
then i changed tactics and refused to give it to people who asked in that manor....yea if they mentioned a project and then asked for how much id tell them, but if they say 'how much per hour' in the first sentence id tell them 'its my policy not to tell people who ask me like that...sorry, good bye'

it was rude, but ive NEVER gotten a job from someone who asked me directly...i figure 99% of the time its a competitor, so i treat them rudely



today i tried a new tactic...i danced around the question....for like 5 minutes....i answered all his questions w/o bringing up the wage...i answered his questions w/o him needing to know the wage..he finally got sick of the BS and just asked ' now can you tell me how much per hour' even though it no longer had anything to do with our conversation anymore....so i told him....and i was angry with myself for doing it...

a magazine article recommends getting personal info when a customer like that calls....get his name,phone,address.....if he's a competitor he will say 'duuuh' while hes thinking up a name and YOU CAUGHT HIM.....i always forget to try that one

since i never get these 'imaginary' customers anyways it doesnt matter how i handle it in the end

what do you do?

[Freelancier]

I answer the question... eventually. I'm not in your situation, though, because I don't have that much competition in the end of the market I service, so I don't worry if someone else gets my rates. But I do get them to talk about their project first and tell them that the hourly rate makes no difference if I can do the job twice as fast as someone charging half as much, because time is money to them as well. Eventually, I let them know my rate, but it could be 30 minutes after the posed the question.

It's your sales call. You get to control the flow of information outward.

[D_J]

Tell them you charge by the project, not by the hour. Then ask them what they need done.

[Steve B]

Exactly what D_J said. I don't have an hourly rate so there's no way for me to give them one. I charge for the project. Nobody has ever asked me that question in 7 years. I'm sure because of your industry and the union influence in your area, people just think more in terms of hourly rates, but that doesn't mean you have to succumb to the expectation.

[Brian Altenhofel]

I just go ahead and tell them what my current rate is. It scares off the hourly rate shoppers, which in my industry are typically going to be low-quality high-maintenance clients. I get a 90% hangup rate. And I'm booked pretty solid for the next year with a call list for if I have time suddenly free up.

When I did charge a significantly lower rate than I do now, I did go the "I charge by the project - let's talk" route because I was still in the compete-on-price bracket. I've significantly shifted the focus of my business since and now compete on referrals.

[huggytree]

is your hourly rate something you should hide from your competition?

i dont know...its something id like to make difficult to get

i DO charge T&M on small jobs.....i dont drive 1 hour each way to bid on a 1 hour job....that would be insane....when someone has a small projec i say T&M

i could make up a $ and say double what i charge...just to screw with them

like i said earlier ive never gotten a job from these customers, so why should i give them what they want (a hourly rate).....how does it help or hurt me to avoid this answer

[fayt]

I display my hourly rate to the public, it's posted on the wall in my office. Generally I get business from 4 out of 5 of my customers. But it's the nature of my business.

For you it sounds like people are cheapskates and lowest bid wins. There really isn't much you can do except tell them how much better your service is.
"I charge $100 per hour sir, while it's a standard rate I will give you far superior products, I will guarantee my service and you will know it was done correctly the first time around".

[fayt]

is your hourly rate something you should hide from your competition?

i dont know...its something id like to make difficult to get

i DO charge T&M on small jobs.....i dont drive 1 hour each way to bid on a 1 hour job....that would be insane....when someone has a small projec i say T&M

i could make up a $ and say double what i charge...just to screw with them

like i said earlier ive never gotten a job from these customers, so why should i give them what they want (a hourly rate).....how does it help or hurt me to avoid this answer

Screwing with them will get you some negative feedback from the community. You'll start hearing things like "Don't go to that guy, his prices are through the roof, he will cheat you" and even "that guy was a jerk, he refused to tell me his rate so I will never do business with him". These things spread like a virus.

[nealrm]

DJ was right. Tell them you quote by the job not the hour. Be polite, it NEVER helps when you are rude.

[Business Attorney]

People ask my hourly rate all the time and I tell them, but I can't recall anyone ever asking that as the first thing when I answer the phone. They always talk about their needs first.

If someone just called up and asked what my hourly rate was, without giving me any idea of what they were looking for, I would probably ask questions instead of giving them an immediate answer. Ultimately, though, I would probably just tell them. I don't see any real downside to giving a caller my hourly rate.

[rob0225]

While not significant to you...$20 to others can be quite a bit. I'm glad you're doing well, but you assume too much about less fortunate folks and the value of $$ to them in relation to the value to you.


Ive done this subject before, but its been a while

ive gotten 2 calls in 2 days asking for my hourly wage....they dont mention a job or anything....just 'hello, how much per hour do you charge?'

im always shocked....most homeowner jobs are 1-2 hours...so if im $10 more per hour its just $10-20 more....who chooses a professional trademan over $10?

when i first went into business i gave them the $
then i changed tactics and refused to give it to people who asked in that manor....yea if they mentioned a project and then asked for how much id tell them, but if they say 'how much per hour' in the first sentence id tell them 'its my policy not to tell people who ask me like that...sorry, good bye'

it was rude, but ive NEVER gotten a job from someone who asked me directly...i figure 99% of the time its a competitor, so i treat them rudely



today i tried a new tactic...i danced around the question....for like 5 minutes....i answered all his questions w/o bringing up the wage...i answered his questions w/o him needing to know the wage..he finally got sick of the BS and just asked ' now can you tell me how much per hour' even though it no longer had anything to do with our conversation anymore....so i told him....and i was angry with myself for doing it...

a magazine article recommends getting personal info when a customer like that calls....get his name,phone,address.....if he's a competitor he will say 'duuuh' while hes thinking up a name and YOU CAUGHT HIM.....i always forget to try that one

since i never get these 'imaginary' customers anyways it doesnt matter how i handle it in the end

what do you do?

[Harold Mansfield]

My hourly rate is posted on my website. But I never respond with a rate to callers or emails that ask that way. I ask them what they need done. If they can't tell me then I tell them that I can't give them any kind of price that I can stick to. If they are too obstinate to understand that, it's best that I don't take them on as a client.

I don't deal with people who call with an attitude.

And I learned a long time ago (as a Limo driver) that people will try to pigeonhole you into a price before they give you important information because they know full well that they need something overly complicated, or that is a combination of services and have likely already been quoted multiple prices around the same rate.

I also don't deal with people who play games as if they are going to outsmart me. I take that as an insult and send them on their way to look for someone else.

[huggytree]

While not significant to you...$20 to others can be quite a bit. I'm glad you're doing well, but you assume too much about less fortunate folks and the value of $$ to them in relation to the value to you.

for the people who $20 is significant they wouldnt hire a plumber...they hire a handyman or friend....or guy on the bar stool next to them

i think its pretty rare $10 or $20 means much to people when they are paying me $107 per hour



what amazes me is how focused people can be on the hourly rate....the amount of time/speed is more important...plus the % of markup on parts

i can charge 1/2 my hourly rate, work 5x slower, markup parts 200%....and as long as i have a low hourly rate they'd hire me....ive tried to explain this to customers over and over...i gave up trying years ago....never had 1 person 'get it'

[huggytree]

Screwing with them will get you some negative feedback from the community. You'll start hearing things like "Don't go to that guy, his prices are through the roof, he will cheat you" and even "that guy was a jerk, he refused to tell me his rate so I will never do business with him". These things spread like a virus.

your probably right....but then again it may help me if they have cheap friends....it will get me less 'price shopper' phone calls which will save me time


from my experience cheap people have cheap friends and rich people have rich friends.....people seem to have friends in the same income levels and politics....

my customer profile has gotten to be almost 100% upper middle class to high end.....i rarely work on blue collar workers houses...mostly other small business owners


and its not like im being rude to 100's of people a year....its just 1-2x a year typically....its probably been a year or more since ive gotten calls like this...i only brought it up since it was 2x in 2 days......ive also gotten a few odd calls from people claiming to be builders...none of them followed through....im wondering if a competitor is testing my reactions and trying to get some info i how i do business......its been an odd week for phone calls

in the end you are correct...i will stop from being rude...but im not giving out my hourly rate...

[rob0225]

for the people who $20 is significant they wouldnt hire a plumber...they hire a handyman or friend....or guy on the bar stool next to them

i think its pretty rare $10 or $20 means much to people when they are paying me $107 per hour



what amazes me is how focused people can be on the hourly rate....the amount of time/speed is more important...plus the % of markup on parts

i can charge 1/2 my hourly rate, work 5x slower, markup parts 200%....and as long as i have a low hourly rate they'd hire me....ive tried to explain this to customers over and over...i gave up trying years ago....never had 1 person 'get it'

That's an overly broad statement and assumption. I've been in tough times before and have had to hire a plumber to fix a problem. If one plumber meant I could save $20 I'd do it. That $20 meant more food on the table or gas in the car.

Sometimes when we are doing well..we lose perspective of what it's like to struggle.

[Freelancier]

I've been in tough times before and have had to hire a plumber to fix a problem. If one plumber meant I could save $20 I'd do it.

Again: pricing is marketing. How you set your prices controls which clients you end up getting. He's not looking for your plumbing job; he's looking to do significant work to upgrade a home for a client who can afford to do that. The difference of a few $$ per hour isn't what lands that job; it's service, references, good reviews on Kudzu (for example). Price is not the dominant message for his market.

[huggytree]

there has never been a time in my life that $20 more was even a consideration

i bought a house at age 23 on $10 per hour
i started over at age 27 @ $9.50 per hour

hundreds meant something...heck yea....$10-$20? never

would you spend 1 hour calling 20 plumbers to find the lowest priced one to save $20?

[Harold Mansfield]

would you spend 1 hour calling 20 plumbers to find the lowest priced one to save $20?

If it was my first time hiring a plumber, I'd call quite few and look for a lot of things before I made a decision.

More than anything, attitude and customer service sways me. If I feel as if someone is annoyed with me for asking about thier rates (when they aren't posted anywhere), that tells me a lot about the kind of service I'll receive and I probably wouldn't want that person in my home. No matter what the price is.

If it's a choice between 3 companies and 2 have their rates posted and one doesn't, guess who's not getting called? Doesn't matter how good they may be, the others made it easy for me to do business with them by giving relevant information without having to call and ask a simple question.

I don't see how asking for rates infers that someone is cheap. Most people want to know what things cost before they hire someone. You know as well as I do that there are plenty of scam artists in your industry as well as mine that jack up the price on people that they think have more disposable income.

[huggytree]

you dont find it odd that the customer says 'hello!, how much are you per hour?'

thats EXTREMELY odd....

a more typical call is 'hello!, my #### is broken, how much to you charge to fix it?'

i feel these calls are competitors and not real....sure a few MUST be real....people are odd and different people focus on different things

asking price first = extreme cheap.....price is all that matters......if they are shopping for price i will never win since im mid priced....

No one posts their prices in my field

every shop works differently....service only shops charge you $50 to come over and then give you an estimate when they arrive...if you say no they get $50 for showing up..they do everything by bid...no hourly rate..they have a price book and have a flat rate for every project

its most likely where i will go if i get bigger.....when im big enough to have a employee dedicated to service thats what ill do

for now i view small service jobs as filler....i have a lot of 5-6 hour days....getting 1 or 2 small service type projects fills my day...i dont make much, but it fills an 8 hour day


once again---im not overly worried about being rude...this only happens 1-3x year at the most.......and i dont think most of them are even real customers....whatever or however i handle these calls will most likely mean nothing.....when i get a customer who is wasting my time i need to get rid of them asap and move on to work or the next PAYING customer....and yes i do have an attitude for time wasters.....ive had a few calls this week for 'advice'....uggghhhh....nothing like being in a crawlspace busy working and have someone looking for free advice.......i wasnt rude with either of them, but had to say 'i am busy and have to go now' to both of them when they kept asking more and more questions....

this has been the oddest week for customer calls.....maybe the oddest in the 5 years ive been in business

[Brian Altenhofel]

If it was my first time hiring a plumber, I'd call quite few and look for a lot of things before I made a decision.

If its my first time hiring any type of service professional, odds are by the time I call them I'm probably already sold on them. I call people that have hired "good" pros and people that have hired "bad" pros and make a prioritized list that way. Two questions that I ask those contacts is how much it cost and how long it took (just a ballpark, although I have some that will actually go find the bill). It's not uncommon for the guy who is 20% "cheaper" to take twice the time (and sometimes they still had to come back on something that really should have been "routine", which is why I ask for both metrics. Typically its one of the top 3 that gets hired.

I don't care about the rate as long as its getting done right the first time.

I'm like huggytree in that I've never worried about such a minute difference in price. My wife and I bought our first house on ~3 acres on an average salary of $9/hr. Its about managing and prioritizing. If the difference is going to be "do I pay the guy $50 more and be confident that it will get done right the first time or save $50 and take my chances", then I'm going to eat a little leaner that month.

Of course, I've also had work done on the barter system, as well as worked out a handshake payment plan. When you live in a county of <10K people and are late on a handshake payment or break a barter agreement, word gets around pretty fast and you might even end up with people who won't let you hire them unless you're paying cash immediately.

[fayt]

you dont find it odd that the customer says 'hello!, how much are you per hour?'

thats EXTREMELY odd....

a more typical call is 'hello!, my #### is broken, how much to you charge to fix it?'

i feel these calls are competitors and not real....sure a few MUST be real....people are odd and different people focus on different things


Competitors won't keep calling and checking, you'd know the numbers. The most they would do is maybe once every year or two. I am going to take a shot in the dark and guess there probably isn't more than a dozen competitors around you. Price is king, people generally don't care about quality, they just want what they want and want it cheap. If they say sorry you cost too much, tell them sorry and hang up. There really isn't a problem publicly displaying your labor rates, thousands of businesses do it.

[huggytree]

i may have as many as 350 competitors locally

the amount of plumbing shops has doubled during the recession.....every laid off plumber has opened his own business

if i had only 12 competitors id be a rich man....there's probably 12 competitors within 5 miles of me

my market is the whole Milwaukee area.....probably 1 hour in every direction


Price is King to 50%...true.....those arent my customers

Quality/Service is my customer base.....many customers dont even ask 'how much'....they just say come and do it

[huggytree]

I don't care about the rate as long as its getting done right the first time.

I'm like huggytree in that I've never worried about such a minute difference in price. My wife and I bought our first house on ~3 acres on an average salary of $9/hr. Its about managing and prioritizing. If the difference is going to be "do I pay the guy $50 more and be confident that it will get done right the first time or save $50 and take my chances", then I'm going to eat a little leaner that month.


.

most of my customers are upper middle class/small business owners.....they want the job done right the first time and could care less if im $10 or $50 more than the other guy..my business is designed for them....i handle their issue so they can move on to the next issue in their life....their other choice is to save $10 and have to take a 2nd day off work for the other guy to make a return visit to correct something.....my customers expect perfection....that is how i treat things....i also expect perfection in myself

[Harold Mansfield]

No, I agree with you there. There are some people that do that and I want to stay as far away from them as possible.
But under normal circumstances, just because a potential client shows concern over the price it's not an automatic red flag that they are cheap.

Most people don't spend without any reguard for price. People like to know what they are paying and what they are getting for thier money, no matter what thier economic status is.

One of my biggest pet peives in the Hospitality industry was going out to a club or "hot spot" , ordering a drink and the bartenders just take your money, and come back with change, and walk away without ever saying how much the total was, and no drink receipt.

It's not that price was going to make me not order a drink, but I like to know what I'm getting charged so that I can be sure I'm not paying $12 a drink at this bar, and $15 a drink at the bar upstairs because that bartenders kid needs braces.

[Steve B]

I always ask the price of something and I never choose the cheapest. But, with most services the hourly rate isn't what I would ask. I would ask how much the total job will cost me.

[huggytree]

i have no problems with someone asking how much something will cost.......i just dont like it when they ask how much something is before they tell me what the something is... its putting the emphsis on the hourly rate and off the job....like the job doesnt matter....only the hourly rate.....especially when the hourly rate is only 1 of the factors which effects the job....shopping by hourly rate is just misunderstanding how a service business works

i never buy anything w/o knowing the price (unless its a repeat contractor)

[fayt]

I'd say locally is within 10 miles. Most people will not go pass 10 miles to get a service they need. Now this depends on the industry and the quality of the work/relationship. If someone loved your work and was a good friend with you, they would travel 20 miles to you. But no one is going to call a plumber an hour away, pay the big trip charge and all. So I'd only include competitors in the 10 - 15 mile radius.

[huggytree]

i have a $59 trip charge...it doesnt matter if your 1 hour away or 5 minutes
its a flat rate

most of my jobs are a 1/2 hour drive or more....my trip charge is based upon a 30 min drive

my customers all call me from repeat business or referral....they dont seem to care how far away my shop is

my company name is a city and a county...so they have a good idea where i live, but it never seems to be an issue or a consideration

[Harold Mansfield]

I'd say locally is within 10 miles. Most people will not go pass 10 miles to get a service they need. Now this depends on the industry and the quality of the work/relationship. If someone loved your work and was a good friend with you, they would travel 20 miles to you. But no one is going to call a plumber an hour away, pay the big trip charge and all. So I'd only include competitors in the 10 - 15 mile radius.
In a small town, maybe. In a city with 1 million people+ and surrounding subs, 10 miles will barely get where you need to go to run a few errands.

[billbenson]

i have a $59 trip charge...it doesnt matter if your 1 hour away or 5 minutes
its a flat rate


If someone tried to charge me $59 for a 5 minute drive, I'd be really pissed.

[Harold Mansfield]

If someone tried to charge me $59 for a 5 minute drive, I'd be really pissed.
At least don't tell me about it. Just give me a flat rate for coming out.

[huggytree]

If someone tried to charge me $59 for a 5 minute drive, I'd be really pissed.


i get it all the time....

its hard to define the 5 minutes......sometimes im 45 minutes from my home and the jobs are 5 mins apart....other times i drive 45 minutes all the way to my hometown...and then back 15-20 mins to the next job in a different city

i obviously try to schedule jobs in my hometown at the start or finish of a day, but it doesnt always work out that way

i could come up with different trip charges for different zones, but im all over the place all day long sometimes....the fairest way is $59 trip flat rate

im sure some local people may not use me a 2nd time over it, but none have ever expressed 'being pissed' over it...or even had any mention of it....everyone has a trip charge

[Wozcreative]

I always say I charge flat rates, within the rates I include ABCD, additional is $/h or If i feel they are shopping around, I don't tell them the hourly rate until they do ask.. most of the time after I tell them that I charge per project.. because it allows my clients to budget better that way—they forget about the hourly rate and give me deets about the project.