We just had a good, long-time client email us to ask if the tech really makes $x per hour (x is our service rate).

How do you even respond to this?

Obviously if we only charged for the tech's rate, we would lose money. Who would pay for the truck, gas, insurance, etc?

I'd like to respond in a diplomatic way, but I'm kind of dumbfounded right now and not thinking straight.

I'm hoping someone can come up with a good response as I said the client is one of our oldest and best, so I'm not sure where this is coming from.

Respond back with...

"if the tech made $$ per hour i would be charging you $$$$ per hour"

Or...

"yes. john is f'n awesome"

Hey mac. I know what you are saying. I want to keep it professional and make him understand without making a joke out of it. Maybe I should just make a joke out of it!

Mac, that makes you his adversary when, hopefully, you want to be creating things with the customer, not arguing about things.

I just whipped this out:

"I don't know how to say this, so I'll just come out and say it: having that question implies that there are a lot of things about business that you are not taking into account.

"First, I pay him. This involves bookkeeping, and I have to pay for that, too. Then there's our desire to have a place to meet at the beginning of the day (rent must be paid) to discuss the work for the day (this is time not billed to you) before he drives out to your place (the time for which is also not billed to you) (unless, of course, you have a "truck roll" charge).

"He drives a truck the company provides (if it does) and we never present you with a bill for the gasoline. He and we follow the employment rules of our state and he takes a couple of breaks every day. I pay for that but don't bill you.

"After work he drives back to the shop, leaves the truck (parking area is also rented) and drives home. After I work another hour or two but don't send you a bill for that), I set the alarm (for which you never see a bill, but it safeguards the stuff we bought for you) and I drive home. Oh, yeah -- I had to put some gas in the tank today.

"Along the way I pick up some dinner (the business pays me, too, you see, so that I can eat) and I go home (for which payments must be made).

"There are people who charge less than we do. They discover, often while going out of business, that they are not charging enough for their business to survive. If you were their customer, they would leave you in the lurch, with no further service down the road, and perhaps even unfinished work, also perhaps paid for. We don't charge less, and when you have a problem, we'll remember what we did and we'll have a leg up on anyone who just walks into your house fresh and uninformed. In fact, sometimes we'll be able to tell you which button to push, or something else requiring knowledge of YOUR setup, to solve the problem over the phone.

"So, does he make that much per hour? No. But that is what is costs to provide the service that represents not hours of his labor, but days, weeks, months of your enjoyment of what this entire enterprise of labor, equipment, travel, gasoline, payroll, rent, and salaries provides."

I'd be tempted at that point to say "any other questions?" but I don't think that would be nice.

I see no reason to go into so much detail.

"Of course not. As a business owner I have significant costs above and beyond hourly wages. This is the number we have come too that allows us to pay a fair wage to our fantastic installers, cover expenses associated with keeping my business operating, and a provide A meager profit at the end of the day."

I agree. These clients are in business and make a lot of money. They must already know how business works. Short and sweet is the way to go, and he will still complain!

CALL HIM and answer a question with a question.

"Hey...I got your e-mail. Why do you ask?"

Ricky Roma: You want to learn the first rule? You'd know if you ever spent a day in your life: you never open your mouth until you know what the shot is.

"As a generally accepted business policy, we do not discuss the pay rates of our employees. The rates we will bill are a factor of our payroll, overhead, and additional expenses that allow us to stay in business and provide you with the level of service you have come to expect"

Exactly what he said ^

I would very forwardly explain I can not discuss personal information like employee payroll with a client. Done, end of discussion!
They are hiring a company, not a individual. What that employee makes has no meaning for them, in what the 'company' charges to do work.

Him asking that is like you saying "why aren't you going with the more expensive projector".

If I don't edit what I say, that might be met with "Are you f&cking kidding?".

If this person does anything that involves billable time, they damn sure know your installer doesn't make what you bill.

This is asinine!

If you have the time and patience, lay all of the expenses out for them, including:

Employee's wage
Employer's contribution for FICA
Any health insurance/other benefit contribution by the employer
Vacation pay
Cost for training
Cost for uniforms/clothing
Cost for specialty tools
Admin costs
Floor space dedicated to this employee's activities at the office/warehouse

If one of my clients ever asks me to justify what I charge, I'm done with them.

This guy isn't a lawyer, is he? If so, ask if he makes the whole cost for billable time, which can be $300/hour, or more.

Only part of the cost of doing business should be attributed to the installer.

Maybe he's reading the Craig's List ads.

I agree that it's none of his business or the pie gets divided, however I wouldn't say that to them. As with anything we talk about withbiur clients it's all in the delivery.

I definitely agree about the "why do ask?" He may not actually want to know if you are taking a cut. He may be thinking damn this worker is good, I hope he's eating a fair wage. If someone answers a simple question with a barage of detailed info it would look to me like they were trying to defend it with information overload, or possibly have had the rate questioned before, so maybe they KNOW the rate is high.

If the client replies with , "he's a hard worker I hope he's paid well". You can say we're very happy with him too and glad we have him as part of our staff. He gets a fair wage that's in line with his skill level.", or some such supportive statement.

If the customer says, "I ask because the rate seems high for the work that he's doing", then I thinks he needs education and also the rates need justification. Somehow the client may have lost touch with the value of the work. Maybe something wasn't properly explained in the presentation. If they are left stewing about what they perceive as a rip off then that's what they'll be left with at the end of the job.

In that case without too much detail I would simply axplane that he is paid a rate that is standard in the industry and for his skill level and, that yes there is a percentage that goes back to the shopnto cover operating expenses, insurance, training, tools, etc. I don't feel that any more detail is required, enough so that he understands that there is more to it than meets they eye.

Most people aren't idiots, understand that businesses make profit and have expenses. With information they can be set straight and will be happy. Other people are idiots. Can't do anything about them.

Craig.

Call him and ask "Was there an issue with his service?"

Took a great Disney course many years ago in Flordia. People rarely ask their real question. For example, one of the most asked question in Disney? What time's the 3:00 parade? The real question; Where's a good spot to view the parade, and how early should we line up?

Simply answer the question he is asking.

Mr. Client. No, I wish I could pay John that much because I think he is worth it as well. But sadly, I can’t because I have to remain competitive with other firms that try to do what we do.

We aren’t competing with Walmart and Best Buy