Hourly rate

[Clyde Hollinger]

Friends,

I would like to chime in here, if I may.  There are some techs out there who
keep the same rate for several years and then go with a larger increase.  Using
a hypothetical $70, their charges might look like this:
    1998 - $70
    1999 - $70
    2000 - $70
    2001 - $82
I personally see two problems with taking this route. First, a client who first
called the tech for tuning in 2000 could think "Wow!  That's way too big an
increase in one year's time!" without knowing that the 2001 change was the first
in four years.  Secondly, if $70 was a fair price in 1998, the tech is actually
working for *less* buying power in 1999 and 2000, since the cost of living keeps
going up.  Increasing the price a smaller amount each year makes a lot more
sense to me.  In this hypothetical situation that could be $74 in 1999 and $78
in 2000.

Now a comment on the .95 phenomenon so popular in this country (and probably
other places, too).  I like to keep the math as simple as feasible, so I have
used a round dollar figure all my tuning days (over 20 years now), and it hasn't
seemed to make an iota of difference.

And lastly, about doubling the charge in eleven years.  In my opinion no one
should take this statement as the norm!  Too many situations are too different.
Speaking strictly from a mathematical computation standpoint, however,
increasing any figure by 7.25% annually will double the amount in about eleven
years.  Got $500,000 in your IRA?  (Yeah, right!)  If you can increase that
7.25% annually, in eleven years you'll have a million bucks!

Regards, Clyde


Farrell wrote:

> Hi Dale. Great post. I'm thinking about raising my rates. Do you have any
> specific philosophy regarding raising rates? Raise your tuning fee $5 per
> year? Always charge $79.95 or $89.95 - make it look good? Go from $65 to $75
> to $85 - the idea being that $75 feels the same as $70? How did you go about
> more than doubling your rates over the last 11 years?