Had some difficulty with our water heater recently. I tried to see if it was something obvious, but couldn't find anything. Ultimately, I had to call our HVAC guy. He sold the heater to us and installed it.
He's never been cheap, but that's something I can live with. He's been reasonably priced, and his work is excellent. He's a one-man show and as a small businessperson, I can relate to his situation.
He ended up poking around the water heater for a little while, then discovering a loose connection that fixed the problem.
After a while, he sent the bill. It was a total of $177. That seemed a bit high to me.
The two things that stood out were that his labor rate was $99 an hour.
On top of that, he charged a $30 "trip charge".
I'm familiar with trip charges in our industry because we can charge them, too. Generally, we don't, because we don't feel that the customer should pay for us simply to drive to their house. We do have minimum service charges, but we don't make the customer pay for drive time.
We deal with all sorts of skilled trades and so far, the trip charge is the exception, not the rule.
The only time we try to use a trip charge is when the customer is wasting our time, called us out for no apparent reason, and the work we performed wasn't enough to cover the cost of gas and labor for the trip there and back.
So, I really resented the trip charge. I've never wasted this guy's time. In the past, I've bought an air conditioning unit and a water heater from him. I've paid him for every trip he's ever made to my house.
The trip charge was a sort of slap in the face to me. A way of saying, "Well... geez, if you want me to drive to your house, you damned well better pay for it."
Given that I clearly have never wasted this guy's time in the past, I was offended.
Now comes the question of his rate. In the past, I never even noticed the rate he was charging me. The bills seemed fair for the amount of work performed. Apparently, he just raised his rates to $99.
I called to ask him if this was correct and he verified that it is. He said he hadn't raised his rates in the past 4 years and decided to raise them just recently.
I don't mean to sound unsympathetic, but in all honesty, labor rates should have remained constant for about the past decade. Inflation has been pretty low. However, my HVAC guy has put in two rate increases in that time frame. Add the fact that negative wage pressure has kept most people's wages, even in nominal terms, relatively flat, and that's a heck of a ballsy thing to do: increase your rate by 12% at a time when the economy is cratered.
I am the first to admit that a trained, licensed, bonded and insured HVAC guy is a skilled person who should make more money than your average bear.
But at $99 an hour? That's a little steep. The other HVAC contractors I use bill $45 or so for their base labor rate. Granted, this guy is good, but is he twice as good? I doubt it.
I do have other HVAC work that needs to be done on the house I just bought. In the past, it wouldn't even be a consideration: I'd have hired this guy. Now though? He's put this game in play. I will be considering other providers and may find somebody else I'm more inclined to use.
This is a delicate balance for a small businessperson. When times are tough, you still need to pay bills and make money. Squeezing your best customers is seldom a good way to go about things, though.
I've always maintained that your best customers should pay your lowest rate. This is something you should manage actively.
If you manage it passively, you will end up giving discounts and additional attention to your WORST customers. The ones who gripe about everything. The ones who make you fix things that have nothing to do with your work. The ones who are angry and don't want to pay the bill.
Those customers, frankly, I've always made a point to charge for everything. Every minute, every trip charge, all at 100% cost. I don't want to keep them. I want them to look for somebody else.
The good customers? They get discounts, they get freebies. I want a long-term business relationship with them.
My HVAC guy? I hope he didn't think I was a good customer, because he has probably lost the long-term relationship he had with me.
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