Sense of entitlement?

[TwelvebyTwenty]

A question for the trades people with predominantly private clients... do you ever base your prices on what you think the client can afford?

I was having a chat with a friend who is a carpenter and he was having a little moan about how he wanted to earn more, and how he was a bit pissed that he lost a recent bid. Long story short, he thought it was ok to add a few grand on a quote for a doctor, because 'he could afford it', but the client went elsewhere. He got into trying to rationalise how the doctor makes a boat load of money and can afford a fancy car and probably takes his kids on multiple holidays a year, etc., and so shouldn't be so cheap.

This is a theme I have seen creeping in with the younger generations in the trades. Basically a sense of entitlement that the world needs doctors and the world also needs carpenters/masons/electricians/etc., so why - just because the doctor is more academic - should he earn more? I suggested he expands his business rather than being a 'one man band', but he said he didn't want to take the risk, or have the responsibility of employing others... no helping some people!

As a tradesperson I'd love to earn the same as a doctor, but personally I know my station in life and it's just not realistic. What is everyone else's thoughts? Is the materialistic, consumerism society warping peoples expectations, or is there some merit to this notion that blue and white collar jobs should be equally valued?

Answers on a postcard...

 

[tjbnwi]

Never.

I also don’t pay my guys based on their expenses.

I did adjust a price once, it had nothing to do with their profession or income.

Tom

 

[semenza]

  No. To me it is just flat wrong to charge more to those who have more and less to those who have less based on that sole criteria.

  I once had an employee of a business say to me "charge him good (meaning a lot), because he's got it". Really irritated me.

  Having just given a strong opinion.  :  Let's be careful this topic doesn't go awry since there will be lots of strong opinions and concepts of how things should be, and justifications, reasons, etc.  It also should be remembered that this is an international forum and things are not the same everywhere.

Seth

 

[RKA]

Honestly I don’t think blue collar or white collar has anything to do with it.  Plenty of doctors don’t live the high life.  Plenty of blue collar workers have worked they way up over the years, started a business, employ other people and do really well for themselves. 

So with that out of the way, should someone be charged based on their (perceived) wealth?  No.  Does it happen?  Yeah.  If I was the customer and I found out the quote was padded because of my zip code, I wouldn’t do business with you.  But that’s the wonderful thing about a free market.  The customer can shop around.  If 3 or 4 other contractors provide similar bids, you are probably priced at market rate.  If you’re higher, there could be any number of reasons why.  The customer can decide whether you’re worth it.

 

[dmccririe]

As a physician, Festool aficionado, and father of a carpenter, I think that if you "pad" the quote, I will know.  I do my research and get multiple bids.  Once I establish a reputable tradesman, and he does quality work, he gets more business.  Your honesty begets my loyalty.  Try to cheat me once and I will never contact you again.  I also never dicker the price.  I have my fees and they are not negotiable.  Fair price paid for work promised. You are sadly mistaken if you think professionals made it where they are by being stupid or untidy with their money.  I usually tell people when I get a bid with the "doctor price."  Especially in a small town, a bad rep follows you forever.

 

[Holzhacker]

Your Buddy is making a typical newbie mistake, a shitty demographic mistake and/or has personal issues he should probably work on resolving.
Can you / should you charge a rich client more than a blue collar client. Sure that's reasonable depending on the circumstances. The rich client is likely to be more picky about quality which takes more time. The blue collar guy just needs to get it done before the relatives show up. Get in, get out, get paid.
To charge a client more because 'they can afford it' is just a dickhead move. Clients will smell that, if not the 1st time the next time. That's also the kind of attitude that lets a guy make bad decisions when in a clients home.
If he wants to make more money, he should work on making himself valuable. The question is always why should a particular client hire you? You are good, nice, have good tools? So what a lot of guys can say that. What's the niche that sets him apart?
Nothing? Well he better work on that.
Want to charge a client more, go for it but don't do it for the wrong reason.

 

[CeeJay]

Yes- price the job you are going to do, and price the risk as well. So if the Doc has a $100k kitchen then your screw-up on a cabinet install will cost more to fix than on a $20k plumbers kitchen.

So by all means price that risk into your quote. The Doc will expect it - he or she doesn’t want you walking away from their job if something goes awry.

But we shouldn’t be pricing based on what the client can afford.

Bear in mind many richer folks didn’t get to be that way by throwing their money around - some of them are pretty savvy!

Sent from my iPhone using Tapatalk

 

[DeformedTree]

The person is an example for what is wrong in this world.

What someone does for a living is a terrible gauge of how much money they have, or how they spend.  There are a whole lot of wealthy people out there that someone passing by would think have no money, and a whole lot of people who look like they have money that have none.  People don't build up wealth by blowing their money.  For every celebrity/sports star who gets famous for how they blew all their money, there are far more celebrities/sports stars who earned far less, were good with their money and just disappear and live happily.

Saying someone should pay based on their income (or theoretical) (or perceived) income is just plain wrong.  This isn't income tax where there are some very solid basis to why higher incomes do and should pay at a higher rate.

Everyone knows people who complain they have no money, need lower taxes, etc, yet buy brand new expensive cars every 4-5 years (or lease),  buy all gadgets, and take expensive trips.  They are often the same folks who will comment to those who drive a 15 year old car, and buy just stuff they need that they should buy a new car/etc/etc.

If you want to raise prices, raise them for all, and be able to back up the price. Get in with the right people and you can be set. Do this, and you might never recover your business.  People always find out/figure it out.

If the person doesn't want to take on employees, that's understandable. Sounds like they need to stop and think about what they are doing.  If you pick a career doing something, and want to do it a particular way, and it pays X, and that isn't going to work for you, then you have to make adjustments, you can't just demand it work because you want it to.

 

[zapdafish]

Someone who now has plenty of money  at one point may not have which means alot of hard work and effort went into accumulating it. Just because they have a nice car etc doesn't mean they don't still look for the best value.

 

[tjbnwi]

There is a big difference between charging more and charging to a value.

On the 100K kitchen mentioned above, you should not be charging more due to risk. Your labor rate should be higher due to higher burden, knowledge and skill. Your billed labor will be higher due to the time necessary to install, mitigating your risk.

Your labor rate on the 20K kitchen cannot be lower, but the labor charge should be lower due to less time spent on the job.

Why can’t your labor rate be lower? Your labor rate should be calculated based on your burden. A simple example;
If you do 200K in sales your insurance is based on that sales number, do 500K in sales and your insurance burden increases. The more you increase your sales, the more your burden increases. This is only one part of your burden.

Tom

 

[05r50]

I read a book years ago titled “The millionaire next door”. It’s a good read. Details how there are plenty of quiet, unassuming blue collar types that have worked hard and made themselves wealthy.

Sometimes flashy houses and cars are not a reflection of wealth but a reflection of wannabe status. They are just making payments and nothing more. Get into a job loss or other economic crisis and their house of cards comes down.

On the other hand, I have met several individuals over the years that you would never think twice about them having money. But they do. Drive 10-20 year old cars and trucks, Still wear work shirts that are almost as old. If they don’t need it they don’t buy it. But they are not going to bite on an overpriced bid. They didn’t get rich by wasting money.

 

[gsdvorak]

A couple experiences many, many years ago have served me very well ever since:

-'Don't judge a book by its cover':  I was working part time at a retail store and would help out on the sales floor when needed.  A couple walked in on a slow night- modestly dressed- and all the commissioned sales people ignored them.  I approached them and I always liked to show them the best product our company offered first before qualifying them and finding out their budget.  I made my presentation, they seemed to like the product very much but didn't want to look at anything else, and then thanked me and left. They showed up 2 weeks later with about $6K in cash and purchased the product I showed them.  The commissioned sales folks were, to say the least, quite miffed, likely upset with themselves.

-'Treat everyone the same':  I bid an installation job for someone I knew was quite wealthy, but bid as I would normally do.  This was a unique installation that I wasn't used to bidding, and turns out I underbid by a large margin.  The owner would check on my progress and, when I was getting close to finishing, said 'Turned out to be more work than you thought, huh?'  I acknowledged that but assured him I wanted to make sure it was done right.  When we settled up, he added quite a bonus on top of my quote, and I had won his trust for future jobs.

Those two experiences taught me to treat everyone I meet with respect and kindness, and treat them all fairly.  You will then build a reputation and the clients you want will seek you out.

Regards,
Gerald

 

[RJNeal]

Gerald hit the nail straight on. That’s how I picked up my clientele. And be clean and clean up when the job is over.
Rick

 

[aloysius]

A good plumber, one that turns up on time, isn't afraid of early AM emergency callouts, who actually arrives when s/he promises & actually does the task required is worth their weight in gold.

 

[mrboult]

I have a range in my daily rates, lower for friends, family/good causes and when I have a wealthy client I simply charge the “correct” amount a designer/carpenter with my skill, diligence, experience and equipment is worth.

Once my mother once passed me a bill she recurved from a plumber to fix/adjust some under sink waste pipes. It seemed very high, so I enquired with the plumber. Along with the higher than expected daily rate he had taken two ‘whole days’ to complete the small job and then added 50% markup to all parts purchased. Parts he went to buy while ‘on the clock’ and being paid anyway!!! (Not parts already and conveniently in his van)

My enquires were polite, I’m a tradesman too, kind of, and I know the pains of the game. He came up with a bunch of poor excuses and reasons for the enormous cost, including how he had to keep his tools in good shape and replace them every couple of years. . . You can imagine my amusement when I heard this! I Imagine his whole tool kit could be worth less than one of my drills.

Ultimately he saw a 70 year old lady on her own and thought he’d have at it. (Oh, And the job was not an emergency,  he did it when it suited him)

 

[Bob D.]

"You can imagine my amusement when I heard this! I Imagine his whole tool kit could be worth less than one of my drills."

Not making excuses for his overcharging but don't think he's got it easier when it comes to tooling up for his job than you or any other craft does.

You probably think an electrician is overrated too then if you are going to base his skill level on the size and value of his tool pouch. Or a mason because he walks on the job with only a canvas bag with a half dozen trowels, a level, and a couple string lines.

Maybe the tools needed to fix a leaky drain cost less than one drill. But there are plenty of tools that go along with the rest of the trade that cost plenty. How much do you think that camera costs they send down the drain to locate a blockage and inspect the pipe. A cheap rig starts around $3k and can run up to $10k or more. A locator to find the sonde in the underground pipe so you know where to dig will cost you ~$3k. Need a jetter to clear that line blockage? That can set you back anywhere from $2K to $25K. Oh wait, you're still gonna need a couple different style drain machines, and a hundred or more other tools to do your day-to-day work. Torches, welders, pipe threading machine, a dozen or more pipe wrenches in various sizes, multiple pipe cutters, tubing cutters, pipe vises, pex crimpers, there's more but I won't bore you. A good pipe vise costs as much as a MFT/3, maybe more. And he no doubt has a bunch of cordless tools too. Sawzall, porta-band, grinder, drill/drivers, impact drivers, oscillating tool, and more.

That equipment needs maintenance and has consumables just like your $300 sander or dust extractor (he probably has one of those too) filter or need to replace drill bits or sharpen saw blades. Guess what, he needs a truck (maybe two) or van same as you to get his tools to the job. Do you carry every piece of lumber and plywood, or every screw or nail in your truck that you might need? Of course not. Do you go get those materials and transport them to the job for 'free'? If you do you're leaving money on the table or don't know the value your own time. Your job and his job are not the same, they can't always be billed in the same way.

The skill is not in the tools its within you. And that is (or should be) what defines the rate no matter what trade.

If you had two monkeys with the same skill level/training; one with a Festool drill and one with a HF drill; they are both going to accomplish the same amount of work....NONE. And the value of their work would be the same...ZERO.

 

[Thompmd]

Seems like he got what he had coming..... client went elsewhere, possibly from the bid?

To start, I spent 30yrs as an hourly factory worker, retired a couple years ago at 53. Always worked OT, always had Rental Properties(around 25).

I don’t begrudge anyone from making as much as they can, carpenters or Dr’s. It’s part of what makes America great.....land of opportunity.

If you don’t like what you do(I didn’t but we made a plan and made it work ) then change. Supply and demand determines much.

 

[ChuckM]

... do you ever base your prices on what you think the client can afford?

Snip.

Here's one answer on a postcard: My answer is yes.

I did charge clients for the similar/ same type of service at different professional rates. Why? 1) No two clients were exactly the same nor were their demands-- some more picky, may I say. 2) For the less affordable ones (e.g. charities), I tried to work within their budgets (and I knew what they were), and charged them less compared to the for-profit clients. A practice maintained for some 20 years before my retirement.

 

[mrboult]

"You can imagine my amusement when I heard this! I Imagine his whole tool kit could be worth less than one of my drills."

Not making excuses for his overcharging but don't think he's got it easier when it comes to tooling up for his job than you or any other craft does.

You probably think an electrician is overrated too then if you are going to base his skill level on the size and value of his tool pouch. Or a mason because he walks on the job with only a canvas bag with a half dozen trowels, a level, and a couple string lines.

Maybe the tools needed to fix a leaky drain cost less than one drill. But there are plenty of tools that go along with the rest of the trade that cost plenty. How much do you think that camera costs they send down the drain to locate a blockage and inspect the pipe. A cheap rig starts around $3k and can run up to $10k or more. A locator to find the sonde in the underground pipe so you know where to dig will cost you ~$3k. Need a jetter to clear that line blockage? That can set you back anywhere from $2K to $25K. Oh wait, you're still gonna need a couple different style drain machines, and a hundred or more other tools to do your day-to-day work. Torches, welders, pipe threading machine, a dozen or more pipe wrenches in various sizes, multiple pipe cutters, tubing cutters, pipe vises, pex crimpers, there's more but I won't bore you. A good pipe vise costs as much as a MFT/3, maybe more. And he no doubt has a bunch of cordless tools too. Sawzall, porta-band, grinder, drill/drivers, impact drivers, oscillating tool, and more.

That equipment needs maintenance and has consumables just like your $300 sander or dust extractor (he probably has one of those too) filter or need to replace drill bits or sharpen saw blades. Guess what, he needs a truck (maybe two) or van same as you to get his tools to the job. Do you carry every piece of lumber and plywood, or every screw or nail in your truck that you might need? Of course not. Do you go get those materials and transport them to the job for 'free'? If you do you're leaving money on the table or don't know the value your own time. Your job and his job are not the same, they can't always be billed in the same way.

The skill is not in the tools its within you. And that is (or should be) what defines the rate no matter what trade.

If you had two monkeys with the same skill level/training; one with a Festool drill and one with a HF drill; they are both going to accomplish the same amount of work....NONE. And the value of their work would be the same...ZERO.

lol lol lol. Are you as plumber? I’ve literally never met a plumber like the ones you seem to be referring to. Not that they don’t exist I’m sure, but they’re few and far between most of the jokers out there. I’ve had to help so many plumbers achieve what I’m hiring them to do on a job it’s f’ing ridiculous. For the most part, plumbing is just Lego no? (I say this having plumbed every single pipe/part in my own house including the boiler, first time no issue)

No idea why you’d bring stone masons into this, only a moron would question their skill requirements.

But all this is besides my point. When there is a leak under the sink I don’t expect to be paying for your 2k camera scope thingy. Just like if someone asks me to put up a shelf, I don't add in the cost of a new domino cutter cos mine is blunt. But I did when I was fixing 30 church pews with dominos. Is that not a fair opinion?

 

[peter halle]

True story.

Last fall I got a referral from a wonderful family to go see a possible new client.  I showed up to a beautiful home that reminded me of something that Thomas Jefferson would have designed.  The husband met me out on the front porch and we talked about the design of the home.  When the home was built, only about five years ago, it was the most energy-efficient home built that year in Virginia.  It was designed by the husband and yes, Thomas Jefferson's designs came into play.

Frankly I just wanted to see inside.  Walking into the living room and seeing the 12 member crown molding was exciting.  I turned to him and said - I want to do work for you, but I suspect that you have been screwed over before.  I don't size up my clients based on their homes or what I suspect their bank accounts contain.  Here are my charges.  If history is reliable, you will probably have me do some work, you'll be happy, and then something outside my control will keep me from coming back.

Well, I did work for the family.  They were, and are happy.  But then there is this stuff going around.  I will not risk a customer in an effort to make a dollar.

And to those new to the industry, he was impressed and continues to talk about how clean I worked.  He is a Festool owner and user.  He could do anything that I did in his home.

I haven't been back yet.

Peter