Geek Squad Services More Valuable Than Electrical Services?

[aline]

Almost every electrical contractor in my area gives free estimates.

The Geek Squad charges $100 for estimates. Note they even say it will only take 1 hour to do the estimate.

A lot of electrical contractors in my area charge $65 to $85 per hour. Some even less than this.
Many electrical contractors in my area charge around $85 for a service call.

Check out the Geek Squad prices for installations at the link below. Note the estimated times and you can see the hourly rate is over $100 per hour.

I guess the Geek Squad services are more valuable than electrical contractor services.

http://www.bestbuy.com/site/olspage.jsp?id=pcmcat54600050001&type=category&DCMP=KNC-TLC&ref=30&loc=KW-1111

[ceb]

We could charge that,but, I dont like wearing a white shirt with a black tie, and my 8' ladder wont fit in a VW.:grin:

[Tiger Electrical]

Geek Squad is one of my "businesses to watch". Good marketing, chain store tie-in. These guys know business. They probably have training to teach anyone to install home theater in short order.

Dave

[aline]

We could charge that,but, I dont like wearing a white shirt with a black tie, and my 8' ladder wont fit in a VW.:grin:
I'd show up in a pink tu tu if the customer will pay me $100 for an estimate.

I have a dispatch fee that's less than half of this to come out and give an estimate. Since almost all the other electrical contractors give free estimates I get quite a few rejections for estimates. That's ok though it keeps me from wasting my time bidding against ten other electricians for a $500 job and then the homeowner decides we're all too expensive and he'll just do the work himself. After all he can get a do it yourself book for $20.

[cadpoint]

Almost every electrical contractor in my area gives free estimates.

Yeah a different colored big box, is that your bread and butter ? Is it something that your dealing with, I don't get the repulsion ?

There's quiet a few people infront of them on the price scale, but alot a lot lower.

If you have a market "WORK IT", your work and name will shine through, I just don't get it otherwise... :wink:

Editted in :
Beleive it or not some people will pay a higher price and not some "Standard rate"!

[aline]

Yeah a different colored big box, is that your bread and butter ? Is it something that your dealing with, I don't get the repulsion ?
I'm not repulsed with the Geek Squad. Just the opposite. I admire a company that knows how to market their services and charge enough to make a decent profit.

I'm just dissapointed that electrical contractors in my area don't feel their services are worth more than the $65 to $85 that most charge for small jobs and service calls.

I'm always hearing electrical contractors complain that they would like to raise their rates but they can't charge more than the going rate of $65 to $85 per hour.

The only reason the going rate around here is $65 to $85 per hour is not because the customer won't pay more than that. It's because that's what electrical contractors have made it. The going rate could just as easily be $135 to $150 per hour if electrical contractors were willing to charge that.

Electrical contractors seem to be afraid of breaking the $100 per hour barrier.

[Energy-Miser]

Geek Squad is one of my "businesses to watch". Good marketing, chain store tie-in. These guys know business. They probably have training to teach anyone to install home theater in short order.

Dave
I hear Home Depot contracts with certain electricians who meet with their approval, to install the products they sell: fans, recessed lights, generators, panels, what have you. Has anyone worked directly with the Home Depot? What has your experience been? e/m

[khixxx]

I hear Home Depot contracts with certain electricians who meet with their approval, to install the products they sell: fans, recessed lights, generators, panels, what have you. Has anyone worked directly with the Home Depot? What has your experience been? e/m

I've heard MR. Electrical has a contract with them.

[cadpoint]

I think your missing the point that its a service, be it a set price, that covers their expenses. People are paying for an expert, they Geek it the owner deciedes after that.

I hate the thought of having to call anyone! I don't think I could afford
any of the other trades, "Period"! Maybe I'm just to hands on, with a plumbers Wife to Boot...

I've seen plenty or T&M,, Drive Time and other pricing structures, if your doing what everyone else does then I guess , yes in fact you have the right to ponder!

Look at it, from out side the box!
No I'm not in business electrically, but I did have a business and ran for ten years and rasied the kids on it. I didn't do what everyone else was doing, I took a break and went (got employed) in electrical!
Who's the Fuba on now!!!:rolleyes:

[emahler]

cadpoint...no offense, but i'm sure all your posts make sense to you..

[aline]

Another thing I was wondering about is I'm always hearing how prices vary by large amounts depending on where you live. Do the prices the Geek Squad charge vary a lot depending on the city?

In other words when I click on the link below I see the following prices.
http://www.bestbuy.com/site/olspage.jsp?id=pcmcat54600050001&type=category&DCMP=KNC-TLC&ref=30&loc=KW-1111

Geek Squad In Home Consultation $100
Geek Squad TV & Video Setup $150
Geek Squad Home Theater Setup $200
Geek Squad Basic Mounting of Flat Screen Panel $300
Geek Squad Programming a Remote Control $150

Are these prices the same in all cities in the US or are they different in some of the cities you guys live in? Do you guys see these same prices when you click on the link from another city and state?
I'm located in Utah and I'm curious if the prices shown at this site vary from place to place.

[emahler]

same price here in New Germany, i mean New Jersey.....

[bobbyho]

I think it's brilliant. I am seeing more of their trucks on the road now. You bet I am going to take some of their marketing ideas and use them on my website. $150.00 to connect the tv to the dvd. No programming of the equipment, Wow. I also noticed that fishing the wires are not included on their installation fee. I guess thats when they say "gotta get an electrician for that". Brilliant marketing though. I hope we all take notice of that.

[76nemo]

How far will GeekSquad go into a problem? When I come into a fault that I can not immediately answer to, can I expect the GeekSquad to answer?
Follow me on an Industrial call, let's see how "Geek" you are.

[Rampage_Rick]

With all the money they're making you'd figure they could afford entertainment like the rest of us...

Bad techs! The witchhunt begins... (http://consumerist.com/consumer/geek-squad/porn/) (It makes more sense if you start at the bottom and work your way up, chronologically speaking)

http://consumerist.com/assets/resources/2007/12/geeksquadtruckpulledover.jpg

[ItsHot]

Do not hesitate to charge $100 for an estimate! Remember this is not the 1980's. A hundred dollar bill is about like a twenty! Use to could gas up the truck with less than a twenty, now it takes nearly $100!

[electricmanscott]

Almost every electrical contractor in my area gives free estimates.

I guess the Geek Squad services are more valuable than electrical contractor services.

http://www.bestbuy.com/site/olspage.jsp?id=pcmcat54600050001&type=category&DCMP=KNC-TLC&ref=30&loc=KW-1111


The "Geek Squad" is operated by smart people who know business and how to run it. Electricians are.......electricians. :rolleyes:

[JES2727]

The "Geek Squad" is operated by smart people who know business and how to run it. Electricians are.......electricians. :rolleyes:
And that sums it all up!

[GilbeSpark]

The difference is the type of person and market they're going after. They're going after a customer that will buy a $2000 wall mount tv or an expensive $200 router just to make their wireless internet 2% faster, and then have them come out and charge them another $400 to set it all up.

For most routine sevice calls we're going after a segment of the market who says, "I just want it to work". No frills nothing "special", just the everyday stuff.

If you want to be able to charge more money, appeal to a different market. This market may be within the same market you're in now, just with a person with a different need --->Something special! You've got to appeal to a type of person, not a type of service. Targeted marketing is key.

[cschmid]

You gotta love flat rate fees..Sometimes you make out big other times you loose your butt..they appeal to an income class that is all credit card..You can get credit card with marginal credit for 2500 dollars and use whole card to buy and install theater system..geek squad to your rescue we will take your credit card cash..this is fad and will also fad away as we move to a more active society..theater system means nothing to me while in the boat fishing..or the deer stand hunting..Yet I own one..so jump on the band wagon and install everything for home owner when wiring there house..:grin: :D

[cschmid]

edited for double entry..gotta love high speed internet and new puter..

[mkoloj]

We could charge that,but, I dont like wearing a white shirt with a black tie, and my 8' ladder wont fit in a VW.:grin:

Here they have the VW's, full-size vans and even box trucks, they are outfitted better than some of the EC's I see driving around in their beat up old vans.
The people they are targeting would probably not let someone in their house if they pulled up in a rickety old van.
Hats off to the Geek Squad and Starbucks marketing depts.

[growler]

The Geek Squad charges $100 for estimates. Note they even say it will only take 1 hour to do the estimate.



Look in your phone book and see how many computer repair companies that do home service calls and offer free estimates. There are not that many companies that provide this service ( I don't know of any ). Now look and see how many electrical companies are offering free estimates.

It's the old law of supply and demand. If there were not a 100 electrical contractors in this area alone I think things would be different. That's a 100 legitimate contractors and every Tom, Dick and Harry doing small side jobs not to mention all the handyman services.

[aline]

The difference is the type of person and market they're going after. They're going after a customer that will buy a $2000 wall mount tv or an expensive $200 router just to make their wireless internet 2% faster, and then have them come out and charge them another $400 to set it all up.

They're also the type that will spend $150 for an electrical receptacle.
http://www.partsexpress.com/pe/showdetl.cfm?Partnumber=110-439 :)

For that price you would think it would at least come with surge protection.

[cowboyjwc]

If you guys who charge for estimates get the job does the estimate cost go away or do you apply it towards the work being done?

If a homeowner gets three bids, like everyone tells them they should, by the time he get's the third bid he may have already spent $300 and not even had any work done yet. Seems kind of silly that the poor guy could get a bid for $500 bucks and then tell you he was gonna have you do the work but he already spent $300 on bids and will have to wait until he saves up enough again to have the work done.

If I called you up today and asked you for a bid and you tell me it's $100 and then I tell you it's for a new WalMart, is it still $100? or do only the homeowners, who everyone thinks is wasting their time istead of thinking of them as their bread and butter, have to pay to have you come by?

There is a plumbing company out here, and I believe they are just local, that charges $45 to come out and snake your drains, sight unseen. The big guys with the fancy trucks charge you $80 just to show up. The $45 dollar guy is booked a couple of weeks out. The big guy will be there in an hour.

[Minuteman]

Free estimate = measure, count new openings, determine path of new circuit, ask questions about locations, suggest (up sale) if possible, decide if electric service is adequate, etc.

Trip Charge = Test, trace, troubleshoot, remove devices, observe operation, etc.

[growler]

There is a plumbing company out here, and I believe they are just local, that charges $45 to come out and snake your drains, sight unseen.


Sounds like a bait and switch to me because you can't snake drains for $45 and stay in business. To hire a journeyman plumber would cost at least $30 an hours for every hour on the clock then add in overhead and they would be working at a loss.

I'll bet they don't leave many homes with a check for $45 dollars.

If you are working for yourself and only charge $45 an hour then you are better off to throw your license away and go get a job ( at least you will get a pay check and you can get $45 an hour doing side work, cash with no overhead ). :grin: :grin:

[macmikeman]

If you are working for yourself and only charge $45 an hour then you are better off to throw your license away and go get a job ( at least you will get a pay check and you can get $45 an hour doing side work, cash with no overhead ). :grin: :grin:

Evan that approach entails overhead, and ends up a looser to the fool doing it.

[GilbeSpark]

They're also the type that will spend $150 for an electrical receptacle.
http://www.partsexpress.com/pe/showdetl.cfm?Partnumber=110-439 :)

For that price you would think it would at least come with surge protection.

Wow, I've got to get one of those. I mean, it's got a GOLD PLATED MOUNTING STRAP!!!!!!!!!!!!!!!!!!!!!!

[emahler]

an estimates costs, in actual dollars, between $45 abd $100+ ( depending on what you pay the guy giving the estimate)....i don't know where the 3 estimate rule came from, but i wish it would go back...there is not enough margin in your avg $500 job to make 1 trip to give a free estimate and a second trip to do the work...and people who get 3+ estimates for a $500 job are not our bread an butter, they are a drain on our resources and time.

[emahler]

plus..being busy is a bad business goal...making a profit is more important....i know a lot of contractors who are busy, but not making money.

as for the $45 drain guy....i'll do it for $35 -but i won't be able to get there for 6 months.....

lady walks into a butcher shop and asks "how much for pork chops?"

butcher says "$3.99 lb"....lady says "$3.99? the other butcher is only $1.99."

butcher says "so why don't you buy them there?"....lady says "because he doesn't have any"

butcher say "shoot, i only charge $0.99/lb when i don't have any....he's a rip off"

[electricmanscott]

this is fad and will also fad away as we move to a more active society..


A fad? I highly doubt that.

A more active society? That is just nonsense.

[BryanMD]

Estimating (work to be done in the future) comes in two flavors.

1) Real work with plans and specs you can do in the office with your coffee.
2) Weeding through the tire kickers and the clueless.

An upfront fee for your professional advice and assessment is cheap money for the clueless and the best way to weed through the tire kickers to find those who will actually pay for competent work.

If you present well when you meet them they'll probably bite and not bother to call anyone else. If they pass... so be it. (You still got the $100.)

[brantmacga]

Wow. I also noticed that fishing the wires are not included on their installation fee. I guess thats when they say "gotta get an electrician for that"

No. They don't say that at all. If you keep reading on their site, you'll find in the "high end" installation package they will fish the wires in the walls, install boxes, plates, etc. . .

[mkgrady]

Another thing I was wondering about is I'm always hearing how prices vary by large amounts depending on where you live. Do the prices the Geek Squad charge vary a lot depending on the city?

In other words when I click on the link below I see the following prices.
http://www.bestbuy.com/site/olspage.jsp?id=pcmcat54600050001&type=category&DCMP=KNC-TLC&ref=30&loc=KW-1111

Geek Squad In Home Consultation $100
Geek Squad TV & Video Setup $150
Geek Squad Home Theater Setup $200
Geek Squad Basic Mounting of Flat Screen Panel $300
Geek Squad Programming a Remote Control $150

Are these prices the same in all cities in the US or are they different in some of the cities you guys live in? Do you guys see these same prices when you click on the link from another city and state?
I'm located in Utah and I'm curious if the prices shown at this site vary from place to place.

Those are the prices I see here in MA

[cowboyjwc]

Sounds like a bait and switch to me because you can't snake drains for $45 and stay in business. To hire a journeyman plumber would cost at least $30 an hours for every hour on the clock then add in overhead and they would be working at a loss.

I'll bet they don't leave many homes with a check for $45 dollars.

:grin: :grin:

And it may be and if you fall for it you deserve it, but no different than telling someone that they should get a service change since you're there anyways.

And he just left my house with a check for $45 dollars, of course I always let them know that I'm an inspector. They tend not to come up with the, "it's a good thing you called me when you did" stories.:grin: :D

and "e" he doesn't know it's a $500 job until you come out and tell him.

What happened to the days when $500 was $500 and you would never turn it down hoping something better was coming up.

Well you guys have a Merry Christmas and I will see you all next year.:smile:

[aline]

What happened to the days when $500 was $500 and you would never turn it down hoping something better was coming up.
That was 50 years ago when $500 was the equivalent of $5,000 in today's world. :)

[cowboyjwc]

I guess I just see a new bowling ball for me or a deer rifle for my son and it only took me a few hours to get it.;)

[hbiss]

Actually I'm repulsed by most geeks and IT "professionals". There is one company around here that charges $300 just to walk in the door and they get it. How much overhead can a company like that have?

The reason I'm repulsed is that these guys (and the computer industry in general) are preditory in nature. They have pretty much decimated the telephone industry. Thanks to IP and VoIP, telecom is now the responsibility of the geeks. Microsoft is about to introduce a system that they hope will make the traditional telephone sitting on a desk a thing of the past.

I don't see them taking over the electrical industry any time soon but you can be sure that the day will come when ECs will have to have a geek or two on staff to handle things like LV control systems that will all be connected to computer networks.

-Hal

[Tiger Electrical]

Contractor A is working at a loss. He might be very busy, but he isn't going to be in business long. Sorry, no warranty.

Contractor B is working at cost. He has good times & bad, but isn't getting anywhere. Service quality and warranty might be there.

Contractor C is making a profit. He has money in the bank. He knows he's not the cheapest and is probably looking for ways to provide a better service. Warranty work is part of his business. If he accidentally does $1,000 damage he's much more likely than Contractor A or B to cut a quick check for it. He's also much more likely to provide same-day service, have the parts on a decent truck, etc, etc.

Personally, I have better things to do with my time than spend half my time running free estimates for anyone. I still do them occasionally for existing clients. I did my time with free estimates for a couple decades. It didn't get me where I wanted to go. I like my business better now. If only half the callers will pay a service charge, those are the people I'll work for. Don't sell yourself short. There are many people that will pay a decent price for good quality service.

Dave

[growler]

I guess I just see a new bowling ball for me or a deer rifle for my son and it only took me a few hours to get it.;)

There was a time when you could bribe an electrical inspector with a $20 but now they turn thier nose up at $20's and start acting like they are honest.

The cost of doing business has gone up.

By the way John this is just a joke. Bribing electrical inspectors always was expensive and the cops are even higher and judges are out of sight.

[emahler]

and "e" he doesn't know it's a $500 job until you come out and tell him.

What happened to the days when $500 was $500 and you would never turn it down hoping something better was coming up.



no..for a $500 job, most homeowners are thinking $200 should cover it...

those days passed on when rules and regulations began making it expensive to operate a company. when taxes and benefits doubled the employees wage. when gas became $2/gal...when trucks began costing $30,000...when mortgages/taxes went from $600/month to $2000/month for the same house...etc, etc, etc...

and yes, if it was only side work, then it's a new bowling ball, or deer rifle...

but for legitimate contractors, it's a losing situation...

i can make money if I do it all in one trip, but that extra $100+/- for the second trip causes it to be a loss..

[Tiger Electrical]

Sometimes after I get a shocked reaction on my quote, I'll ask what they were expecting. It's always absurdly low. I had a recent one hanging a couple light fixtures on high ceilings with a couple dimmers. The fixtures had to be completely assembled with loc-tite. She thought $200 was about right. After she accepted my bid, one of the fixtures is missing parts. Add another trip.

Dave

[aline]

I just got off the phone with a guy that's converting from a seperate cooktop and oven to a free standing range. He said there are currently two 30amp breakers one for the cooktop and one for the oven. He thinks he will need a 50amp breaker and the outlets will have to be moved about 6 feet to where the range will be.

How much are we looking at? About a $100 he asks.

[aline]

I had another one I went out on. It was to disconnect a hot tub and remove the wiring. She had gotten several bids and they were all between $200 and $300. She felt they were all too high, decided not to have any of us do it and refused to pay my dispatch fee since all the other contractors gave her a free estimate.

She said she would have her mother in-law do it.

Turns out her mother in-law is an electrical contractor in another city. She just didn't want her to have to drive that far to do the work for her.

[bradleyelectric]

[QUOTE=GilbeSpark]For most routine sevice calls we're going after a segment of the market who says, "I just want it to work". No frills nothing "special", just the everyday stuff. QUOTE]

What if it cost more money to "just have it work". Something that has worked for me is to tell the potential customer how much it costs, than ask them when they are looking to have the work done. I make the issue when, not how much.

[emahler]

For anyone who wants to do residential service work...and make a profit...can't afford not to learn from this guy (http://www.mattsmithmedia.com/)

[emahler]

Here is an example of a busy company...but not profitable...

CHRISTENSON SOLD—Microfield Group (stock symbol MICGB.OB) has sold off Christenson Electric, a respected electrical contractor in Portland, Ore. The buyer is CEI Acquisition, Houston, which made the purchase for $1.65 million (plus the assumption of nearly $8 million of debt). Christenson’s sales were not given, but the company has 400 workers and “several hundred trucks,” making it a pretty big electrical contractor. Microfield, which lost $1 million on $17.7 million in sales in its most recent quarter, will now focus all efforts on its EnergyConnect subsidiary.


unfortunately 90% of this industry will only see $17.7 million, and miss the part about losing $1mil

[ItsHot]

I have noticed the comparison of the Geek Suad and Starbucks( "Bigbucks") So this makes me wonder about the American consumer??? They have complained about paying $2 for a gallon of gas, but at the same time have paid $3.50 for a cup of "not that great" coffee!

[BryanMD]

ItsHot wrote: "I have noticed the comparison of the Geek Suad and Starbucks( "Bigbucks") So this makes me wonder about the American consumer???"

1) People are in general complete idiots.

2) With the ever increasing transience when people get to that new city they don't have any personal relationships with servicers (if they ever did) so gravitate to franchise operators for all sorts of things. For the ones who do think it through they'll rationalize that if they have a problem they have a BIG company to go after.

3) People are idiots.

4) Advertising and clean cut staff and trucks give them a warm feeling.

5) People are idiots.

[quogueelectric]

Is like half price. When you add up the items a la carte they usually total 1000 bucks to hang a 1000$ TV. It is good money and nice work but you have to be able to produce a picture on the screen before you get paid. You can get the cables on ebay for about 20 bucks in bulk and the customers are happy when you leave them with a new plasma install in HD.

[satcom]

Here is an example of a busy company...but not profitable...

CHRISTENSON SOLD—Microfield Group (stock symbol MICGB.OB) has sold off Christenson Electric, a respected electrical contractor in Portland, Ore. The buyer is CEI Acquisition, Houston, which made the purchase for $1.65 million (plus the assumption of nearly $8 million of debt). Christenson’s sales were not given, but the company has 400 workers and “several hundred trucks,” making it a pretty big electrical contractor. Microfield, which lost $1 million on $17.7 million in sales in its most recent quarter, will now focus all efforts on its EnergyConnect subsidiary.


unfortunately 90% of this industry will only see $17.7 million, and miss the part about losing $1mil

A good example, of how down in the Mud this industry is in.

[celtic]

A good example, of how down in the Mud this industry is in.

If this industry is so down - WHY was that company (and it's debt) bought?

[satcom]

If this industry is so down - WHY was that company (and it's debt) bought?

will now focus all efforts on its EnergyConnect subsidiary.

It's for sure they were in the mud, to loose that much money.

[hardworkingstiff]

cadpoint...no offense, but i'm sure all your posts make sense to you..


:grin: That's funny, I don't care who you are! :grin:

[hardworkingstiff]

You go to a Doctor's office, sit and wait for 15 minutes to 1 hour, speak with the Doctor for 5 minutes and get his opinion. Get some drugs or another appointment. You pay $100 - $150 for seeing him/her for 5 minutes and you did all the legwork.

I fight traffic, show up with my work vehicle (took $ to get it here, plus my time), I spend 15 minutes listening to you and check out your problems, and then you expect me to work for nothing? If you do this, then you don't value yourself. At least try to recoup some gas money and direct labor cost.

There is no such thing as a free estimate. It's just a matter of who is paying for it, the customer or the contractor.

[jrannis]

Sounds like a bait and switch to me because you can't snake drains for $45 and stay in business. To hire a journeyman plumber would cost at least $30 an hours for every hour on the clock then add in overhead and they would be working at a loss.

I'll bet they don't leave many homes with a check for $45 dollars.

If you are working for yourself and only charge $45 an hour then you are better off to throw your license away and go get a job ( at least you will get a pay check and you can get $45 an hour doing side work, cash with no overhead ). :grin: :grin:

You are not required to have a Plumbers license to snake a drain

[growler]

You are not required to have a Plumbers license to snake a drain

I understand that you wouldn't need a plumbers license to snake a drain but how many drain snaking services have you seen. Most drains are snaked by plumbers because they expect to get more work than just snaking the the drain ( the problem may be bigger).If you run a plumbing service in most states you have to have a journeyman plumber on the service truck. If they are not plumbers then they are just handymen and you can't compare handymen prices to real contractors.

I had no idea that there were even enough drains that needed to be snaked to make a full time business of it.:grin: :grin:

[emahler]

we had an outfit like that in our neck of the woods for years...only snaked drains...they sent the plumbing work to plumbers, and subbed the drain cleaning from plumbers...cheap

they were fairly large, and had been around for quite awhile...

but they are gone now...even though they were 1/2 the price of a plumber, they couldn't match the advertising...the plumbers realized that they could make money on drain cleaning, so they stopped subbing it out...

and the truth is, when people need a drain cleared, they don't want to wait...they'll pay whatever you charge them...

[jrannis]

How about ...... screen your calls better.

I will still do free estimates but it has to be when Im in the area, and usually after work hours or first thing as not to cut into my work day. I do have fome "freebee" time in my work week to do estimating. I do not advertise and budget resourses for sales calls such as estimates.

[ceknight]

I had no idea that there were even enough drains that needed to be snaked to make a full time business of it.:grin: :grin:

http://www.rotorooter.com/pressroom/visuals/audio/Roto-RooterJingle.mp3

:)

[mkoloj]

I have noticed the comparison of the Geek Suad and Starbucks( "Bigbucks") So this makes me wonder about the American consumer??? They have complained about paying $2 for a gallon of gas, but at the same time have paid $3.50 for a cup of "not that great" coffee!

I agree the coffe is not great at all, but Starbucks stock seems to be doing alright, I think it has split 5 times since it's IPO i the early 90's.
It is all about marketing to a specific group of people.
They charge 300% of the the going rate of a cup of coffee and make people feel good about paying it.
People feel good about having that $4 cup of coffee just like they will feel better when they can just write a check and have a nice home theater system installed and not have to wrestle with that nest of wires behind it.

[cschmid]

If this industry is so down - WHY was that company (and it's debt) bought?


Bad management does not mean bad company..no profit or low profit margin are a management issue..wait I don't need to give you guys a business speech..Wait it is that time of year HO HO HO MERRY Christmas..

[aline]

My point to this thread was not to imply the Geek Squad is charging too much for it services but rather electrical contractors are charging too little.

How many electrical contractors out there charge less than $100 for a service call?

There's not a single item listed that's less than the $100 estimate.

I believe electrical services are every bit as valuable if not more valuable than attaching a bracket to a wall and attaching a TV to it. Note: The customer has to supply the bracket the bracket is not included in the price. Yet our prices don't reflect this. There's electrical contractors in my area doing service upgrades for $900.

The most expensive TV you can buy is useless without a receptacle to plug it into. :)

I often hear people on these forums say you can't charge those prices in my area. The Geek Squad prices seem to be the same regardless of the area. Why is this?

[aline]

Free estimates have been around for a long, long time. But what used to be a 5 minute trip accross town is now a 45 minute trip. Maybe it's time to rethink the free estimate thing. Gas is expensive but your time is even more expensive. Is there an electrician in the photo on his way to give a free estimate on a $500 job? :)
http://www.cbsnews.com/stories/2005/05/09/national/main693952.shtml

[Rewire]

I think the problem is not with giving "free" estimates the problem is if all you do is give a "free" estimate. The free estimate gets my foot in the door then it is up to me to "sell' my service. I have to remember that I am also a salesman for my company and selling the service is more than price.When you go buy a car what is the last thing the salesman wants to talk about...price, he wants to "sell" you the car first then when you think you can;t live without it he will talk price unfortunatly as contractors we talk price first before we "sell" the service.

[cowboyjwc]

There was a time when you could bribe an electrical inspector with a $20 but now they turn thier nose up at $20's and start acting like they are honest.

The cost of doing business has gone up.

By the way John this is just a joke. Bribing electrical inspectors always was expensive and the cops are even higher and judges are out of sight.

Of course I knew it was, my bribes start at $2.5M. If I'm gonna lose my job, I'm gonna make it worth my while.:grin:

The problem with that price is that usually the guys figure out it's just cheaper to do the work right and finish.:roll:

[cadpoint]

...
I often hear people on these forums say you can't charge those prices in my area. The Geek Squad prices seem to be the same regardless of the area. Why is this?

Cause the Yellow box knows thier expenses. They figured out that the average home owner doesn't care to hang there new toy, and have determined that their bottom line can be helped to supply a service for a great niche market! Maybe their not concerned with a business lose of 2 to 4 employees verses keeping 30-50 persons in a store, besides they get to Geek in the store as well.

Its a great example of a proper service and demand, IE Niche market, note the first example, LOL. The 2nd example is what I'm talking aobut.
http://www.m-w.com/dictionary/niche

Oh and I'm glad I can Humor everyone along... :roll:

[Riograndeelectric]

what about Auto Mechanics. My Ford dealer charges me $85.00 per hour for Auot repairs on my ford van this is down form there Normal price of $100.00 since I am a fleet customer - 2 vehicials and you have to go to them to have the work done.

so what is up with this..

I charge a $25.00 estimate fee that is refundable if I am hired to do the work with in 30 days of estimate.

some Bulk at this while other are ok with the Estimate fee.
this is a good way to weed out the customers only looking for the cheapest price and not looking at Quality work.

[Rewire]

A free estimate is like a free car wash with a tank of gas the idea is to get you to stop at the station.

[emahler]

A free estimate is like a free car wash with a tank of gas the idea is to get you to stop at the station.

bad analogy...i'm putting the price of the carwash into the tank of gas...and you're buying the gas BEFORE I give you the free car wash...

sign my contract and pay me first, and i'll give you a 'free' estimate all day long...

free estimates are losing propositions for 2 groups...the contractors and the paying customers....

the only people who win with 'free' estimates are the people who get 7 quotes on a $400 job to save $15 dollars...

[satcom]

bad analogy...i'm putting the price of the carwash into the tank of gas...and you're buying the gas BEFORE I give you the free car wash...

sign my contract and pay me first, and i'll give you a 'free' estimate all day long...

free estimates are losing propositions for 2 groups...the contractors and the paying customers....

the only people who win with 'free' estimates are the people who get 7 quotes on a $400 job to save $15 dollars...

The bigest rip off that attracts people is the earn miles on your charge card, what a shell game, pay me a high intrest fee, and i will give a small amount of that money back, so I can keep abusing you.

[emahler]

The bigest rip off that attracts people is the earn miles on your charge card, what a shell game, pay me a high intrest fee, and i will give a small amount of that money back, so I can keep abusing you.

that's why I love amex...their miles don't cost me anything:D no interest charges...

[satcom]

that's why I love amex...their miles don't cost me anything:D no interest charges...


\You just don't see the cost with Amex, they charge a annual fee plus they charge the merchant, who in turn has to build the cost into his price, YOU PAY EITHER WAY!

The big picture is a lot of people will shop for a deal, then throw money away on hidden charges.

[emahler]

\You just don't see the cost with Amex, they charge a annual fee plus they charge the merchant, who in turn has to build the cost into his price, YOU PAY EITHER WAY!

The big picture is a lot of people will shop for a deal, then throw money away on hidden charges.

ah...i know all that...but I still like it:D

mostly I like the fact that buy using AMEX, we extend ourselves an extra 30 days of credit to collect A/R's...

but the truth is satcom, you're paying for it anyway...credit cards are so prevelant, that the cost of processing them is automatically added into the price of everything. There rarely is a discount for using cash anymore.

Plus, truth is, the annual fee is well less than the value of the points I get from AMEX...we spend about $500/yr for all the cards...I get back about $50,000 worth of value every year just for using the card. From hotel rooms to plane tickets to anything else in their rewards programs....the annual fee is well worth it for us.

Now, if I was using a MC or Visa, and we didn't pay down the balance every month, and I was paying interest...probably not worth it.

[satcom]

ah...i know all that...but I still like it:D

mostly I like the fact that buy using AMEX, we extend ourselves an extra 30 days of credit to collect A/R's...

but the truth is satcom, you're paying for it anyway...credit cards are so prevelant, that the cost of processing them is automatically added into the price of everything. There rarely is a discount for using cash anymore.

Plus, truth is, the annual fee is well less than the value of the points I get from AMEX...we spend about $500/yr for all the cards...I get back about $50,000 worth of value every year just for using the card. From hotel rooms to plane tickets to anything else in their rewards programs....the annual fee is well worth it for us.

Now, if I was using a MC or Visa, and we didn't pay down the balance every month, and I was paying interest...probably not worth it.

The bottom line is the consumer is paying for any and all perks, no free lunch, we go thru this with our rates, and I think it comes down to what the customer preceives as a deal, and not what a real deal is.

[emahler]

The bottom line is the consumer is paying for any and all perks, no free lunch, we go thru this with our rates, and I think it comes down to what the customer preceives as a deal, and not what a real deal is.


I agree...but there is a difference between getting what you pay for....and paying for nothing...

as I said, we are all paying a few % higher anyway because CC's are so common. I'm deciding to pay $500/yr more for the benefit of receiving $50,000 in value for purchasing things I need to purchase anyway...

I'm not sure you and I are actually disagreeing, I just think that you example is a little misguided...like rewires free gas example....

[Davis9]

I use my AMEX to pay my stock house bill every month, I used to just write a check. Now I get 2% off and points.
Just finished my X-mas shopping----using points in the rewards mall. To lazy to go to the mall, wait--too busy.LOL



Tom;)

[macmikeman]

And of course were not forgetting to report those little extra amex perks as income to you know who, RIGHT?:roll:

[emahler]

And of course were not forgetting to report those little extra amex perks as income to you know who, RIGHT?:roll:

i wouldn't say forget....;)

[ElectricianJeff]

I give "free" estimates. I feel I have to, to remain competetive. Besides its my foot in the door to sell my services. Like the CC companies, the cost of the free estimates I give are included in everyones price weather the job is from an estimate or a "just get here and do it job" which is a big part of my business anymore.

I use the additude with customers that I will be their electrician for life. I re-enforce this in a number of ways. When I call them on the phone I ussually identify myself not by name but as "their favorite electrician". When I install or fix something I always tell them for exsample "Everytime you flip that switch I want you to think of me".

My goal is that when they think or hear about electricity, without taking a breath they think of me.

This may sound corny to some but its working for me. :grin:

Jeff

[boboelectric]

They're also the type that will spend $150 for an electrical receptacle.
http://www.partsexpress.com/pe/showdetl.cfm?Partnumber=110-439 :)

For that price you would think it would at least come with surge protection.
This will make your F.P.E. panel more productive.

[Tiger Electrical]

I think free estimates are more like running my hard-earned money through a shredder. I like Geek Squad's prices. I'll offer to match them.

Dave

[emahler]

I give "free" estimates. I feel I have to, to remain competetive. Besides its my foot in the door to sell my services. Like the CC companies, the cost of the free estimates I give are included in everyones price weather the job is from an estimate or a "just get here and do it job" which is a big part of my business anymore.

I use the additude with customers that I will be their electrician for life. I re-enforce this in a number of ways. When I call them on the phone I ussually identify myself not by name but as "their favorite electrician". When I install or fix something I always tell them for exsample "Everytime you flip that switch I want you to think of me".

My goal is that when they think or hear about electricity, without taking a breath they think of me.

This may sound corny to some but its working for me. :grin:

Jeff

yet you are willing to punish these golden customers with higher prices in order to offer free estimates to people who will never buy from you?

if you really want to be competitive...charge for estimates...it will reduce your operating costs and allow you to give lower prices to customers....customers being people who actually buy your services...

[emahler]

I think free estimates are more like running my hard-earned money through a shredder. I like Geek Squad's prices. I'll offer to match them.

Dave

it's a simple concept...why is it so hard for many to grasp?

[emahler]

The bottom line is the consumer is paying for any and all perks, no free lunch, we go thru this with our rates, and I think it comes down to what the customer preceives as a deal, and not what a real deal is.

les, i agree with you on this...and it has to be this way...

about 10-12 yrs ago, I met a plumbing contractor from detroit...his company at the time was doing $5-$7mil a year in residential service and repair...

he told me, and the words stick in my head until this day, "the customer pays for everything"

he added "if you want a $1mil house...a new mercedes...a helicopter...where do you have to get the money? from the customer..."

his point was, we don't print our own money...we have to earn it from the customer...the only way to get the things we want in life, is to convince the customers to pay us to give them what they want.

nothing is free...everything costs someone...let your customer pay, not you...

[peter d]

FWIW, I commend any company that can get top dollar for their services, whether it's Starbucks, Geek Squad, or the big flat rate service companies.

As I said in the other thread, I think these companies are only helping our industry, not hurting it. I just wonder when EC's are going to smarten up and start charging real prices for their work.

[electricmanscott]

FWIW, I commend any company that can get top dollar for their services, whether it's Starbucks, Geek Squad, or the big flat rate service companies.

As I said in the other thread, I think these companies are only helping our industry, not hurting it. I just wonder when EC's are going to smarten up and start charging real prices for their work.

My thoughts exactly.

[Rewire]

bad analogy...i'm putting the price of the carwash into the tank of gas...and you're buying the gas BEFORE I give you the free car wash...

sign my contract and pay me first, and i'll give you a 'free' estimate all day long...

free estimates are losing propositions for 2 groups...the contractors and the paying customers....

the only people who win with 'free' estimates are the people who get 7 quotes on a $400 job to save $15 dollars...
The idea is to get you to stop at station A instead of station B, then while at station A they can sell you a hot wax and while you wait chips and a soda.the idea of a free estimate is to get you to call me before electrician B then I have to sell you of my service.It is all part of my job just like cleaning the office toilet( I dont charge for this) Getting out of the hourly worker mentality is a must for running a business I do a lot of things to keep my business running that do not get directly billed to customers.I have to remember I am just another part of overhead no single customer pays my salary I have a written job description for myself and meeting with potential customers falls into that job desription.I look at free estimates as just another sales call.

[emahler]

The idea is to get you to stop at station A instead of station B, then while at station A they can sell you a hot wax and while you wait chips and a soda.the idea of a free estimate is to get you to call me before electrician B then I have to sell you of my service.It is all part of my job just like cleaning the office toilet( I dont charge for this) Getting out of the hourly worker mentality is a must for running a business I do a lot of things to keep my business running that do not get directly billed to customers.I have to remember I am just another part of overhead no single customer pays my salary I have a written job description for myself and meeting with potential customers falls into that job desription.I look at free estimates as just another sales call.

i understand what you are attempting to say...but you are missing the boat...

free estimates for us are analogous to the gas station giving the free car wash first, then hoping they convinced the customer to buy gas there.

you'll definitely get the customers to come to your gas station then...but at what cost?

it's not about an hourly worker mentality...i haven't had one of those since I can remember...

it's about understanding your costs and not just blindly robbing peter to pay paul (using profit from one thing to pay for a loss on another)

the basic premise behind free estimates is faulty...it's been faulty for years...but contractors are so ingrained with ancient thinking, that we are unable to get beyond it...

we still think that the low price is what every customer wants...we think that we are doing right by the customer to repair something, rather than replace, because it's cheaper at this moment...etc...

if you look at the resi service companies across the country that are really successful, and see how many offer free estimates.

if you are doing $10,000+ jobs...free estimates are fine.

if your job average is +/- $500...free estimates are a profit breaking endeavor...

[ItsHot]

What does it cost you to give an estimate? Gas, time, time away from another paying job!

[ItsHot]

My thoughts exactly.
Why do so many EC's give their work away?? What is wrong with making a good profit? Is one of the reasons because there are so many handymans and hacks out there that you feel you have to compete with them?

[bradleyelectric]

I just wonder when EC's are going to smarten up and start charging real prices for their work.

Do you? How do you do it?

[peter d]

Do you? How do you do it?

I'm not an EC. I considered going out on my own for a while, and did a few jobs for myself, but I've put those plans on the shelf for a while.

Nonetheless, I want to see EC's succeed and stop selling themselves short. It's very discouraging to work in an industry that is well known for undercutting and prostituting itself, for lack of a better term. Higher rates will mean higher pay, better benefits and more bonuses for employees. It will make this industry better in the long run if EC's stop complaining about the other guys being "so expensive" and started charging more themselves.

[emahler]

hey...prostituting yourself is not bad if you are a $10,000 a night high class call girl...but the $20 girl at the elks convention...that's bad...:D

peter...bradley...it won't change until the cost of entry into the industry is raised...right now, you need about $3k and you're a contractor. You don't need any education...you don't need any understanding of business...heck, in some places you don't even need to be proficient in the trade...

when the cost of entry is so low, you are gonna have an industry full of bottom feeders...

now, if you can get up a few levels in the industry, you can make money. but on the entry level, fugetaboutit....

[electricmanscott]

. It will make this industry better in the long run if EC's stop complaining about the other guys being "so expensive" and started charging more themselves.


That's not happening anytime soon. Just look at the representation of the industry on this board. In my view anybody that takes the time to come here to learn is a step or two above those who don't bother. However.....how many times have topics gone on and on complaining about new code changes and "how much is this going to cost me?" We need to learn as a group that this will not cost you one penny and in fact will add to your profit because you are now selling a more expensive item.

[bradleyelectric]

peter...bradley...it won't change until the cost of entry into the industry is raised...right now, you need about $3k and you're a contractor. You don't need any education...you don't need any understanding of business...heck, in some places you don't even need to be proficient in the trade...

when the cost of entry is so low, you are gonna have an industry full of bottom feeders...

now, if you can get up a few levels in the industry, you can make money. but on the entry level, fugetaboutit....

Where are you located? Where I am you do need to pass a 4 hour test. It is just that test and you can use the truck you just bought for $400. Liability insurance can be had for about $450. that is also required to get an active license. I believe there are some out there that don't carry it year round.

What would you consider to be a few levels up in the industry? Sometimes my best money comes from service changes.

[brian john]

The company that did my IT stuff sent us an invoice for $5,000.00, last January. They wanted a retainer for 2007 possible work, and they would bill against this retainer in December they would assess us a 2007 minimum fee based upon the number of calls and then charge us another retainer to bring the account back to $5,000.00, Now this guy was my IT guy for 15 years we were one of his first customers. So I sent him a big NO THANKS and hired a new IT guy, actually have fewer problems now.

[khixxx]

Where are you located? Where I am you do need to pass a 4 hour test. It is just that test and you can use the truck you just bought for $400. Liability insurance can be had for about $450. that is also required to get an active license. I believe there are some out there that don't carry it year round.

What would you consider to be a few levels up in the industry? Sometimes my best money comes from service changes.

If you would jump into your brother state WV you need to pass an electrical exam and a contractors exam. The contractors exam is open book and in chronological order. I got a 90 something. Extremely easy, however I seen guys getting up walking out and complaining on how hard it was.

The American dream is not meant to be hard, You just need to put forth an effort.

[emahler]

Where are you located? Where I am you do need to pass a 4 hour test. It is just that test and you can use the truck you just bought for $400. Liability insurance can be had for about $450. that is also required to get an active license. I believe there are some out there that don't carry it year round.

What would you consider to be a few levels up in the industry? Sometimes my best money comes from service changes.


NJ...technical test for a license, which is required...however, $600 pays for a prep course that helps all but the most dense pass the test...

insurance and few other items and you are at $3k or less...

a few steps up? $100,000+ electrical jobs that require more than 2 people...

service changes are profitable, if priced right...they also are not guaranteed...especially if the economy is slow and you are at $3k+, but moonlighters or slugs are <$1500...it's a 1 man job...

heck, even custom homes is a losing market. a slug and a helper can do a 10,000 sq ft house by themselves and screw up the pricing...

need to find niches or grow to the point that you are competing with other 'companies', instead of slugs, trunk slammers, and electricians (as opposed to electrical contractors)

[emahler]

If you would jump into your brother state WV you need to pass an electrical exam and a contractors exam. The contractors exam is open book and in chronological order. I got a 90 something. Extremely easy, however I seen guys getting up walking out and complaining on how hard it was.

The American dream is not meant to be hard, You just need to put forth an effort.

but the easier it is to try...the harder it is to attain...

does that make sense?

[macmikeman]

I give "free" estimates. I feel I have to, to remain competetive. Besides its my foot in the door to sell my services. Like the CC companies, the cost of the free estimates I give are included in everyones price weather the job is from an estimate or a "just get here and do it job" which is a big part of my business anymore.

I use the additude with customers that I will be their electrician for life. I re-enforce this in a number of ways. When I call them on the phone I ussually identify myself not by name but as "their favorite electrician". When I install or fix something I always tell them for exsample "Everytime you flip that switch I want you to think of me".

My goal is that when they think or hear about electricity, without taking a breath they think of me.

This may sound corny to some but its working for me. :grin:

Jeff

Jeff, what they are really thinking is probably, "lets call that one guy who hardly charges any money for fixing our stuff"

[emahler]

nah...they use me because I'm good:D

[bradleyelectric]

NJ...technical test for a license, which is required...however, $600 pays for a prep course that helps all but the most dense pass the test...

insurance and few other items and you are at $3k or less...

a few steps up? $100,000+ electrical jobs that require more than 2 people...

service changes are profitable, if priced right...they also are not guaranteed...especially if the economy is slow and you are at $3k+, but moonlighters or slugs are <$1500...it's a 1 man job...

heck, even custom homes is a losing market. a slug and a helper can do a 10,000 sq ft house by themselves and screw up the pricing...

need to find niches or grow to the point that you are competing with other 'companies', instead of slugs, trunk slammers, and electricians (as opposed to electrical contractors)

I make more money doing commercial jobs between 3K-14K than I do on 100K jobs. Figure 100K jobs at 10%. I can make 50% on the right small commercial jobs. I did a rush job at a national toy store in the last 30 days. Labor cost me $1200. materials were under $5K. Price was close to $29K. Granted that was an unusual bid, but I certainly make more working directly for business owners in that price range. Second to that is commercial projects for GCs in that price range. I can price them at more than 10%. Are you talking about new construction over 100k? How do you price them? I don't give away the small residential service work. I can make pretty good money at it. I do not try to be the cheapest guy doing it.

[emahler]

I make more money doing commercial jobs between 3K-14K than I do on 100K jobs. Figure 100K jobs at 10%. I can make 50% on the right small commercial jobs. I did a rush job at a national toy store in the last 30 days. Labor cost me $1200. materials were under $5K. Price was close to $29K. Granted that was an unusual bid, but I certainly make more working directly for business owners in that price range. Second to that is commercial projects for GCs in that price range. I can price them at more than 10%. Are you talking about new construction over 100k? How do you price them? I don't give away the small residential service work. I can make pretty good money at it. I do not try to be the cheapest guy doing it.

bradley...you can always make money on the 'right' small jobs...and there is definitely money in the resi service (otherwise companies like the dwyer group, clockwork, nexstar, etc wouldn't exist)

my point is that that end of the market is full of slugs...you can differentiate yourself from them, but you always have to deal with them.

when you get into larger projects, there are less one man shows screwing up the program. in addition, i've learned that while your margins on a $100k job might be 10%..for a company set up for those projects, the margin could be 20%+....

i'm not saying that money can't be made in either place, just that if you do small service work, you will always have to deal with new guys, moonlighters, etc.

[brian john]

I could be wrong on this, but I bet those geeks make less per hour than your electricians. I know in te UPS field the hourly rate is way over my rate, yet their techs make less and have fewer bennies then my men.

[ex-seabee]

Yeah there is a company, (a franchising operation) called Mr.Electric, and in some cases they do work through Home Depot. Each business must apply and be checked out, and qualified before allowed to work with Depot. (I worked for one of these franchises for a while.) The real problem with, "the dollar amounts /rates thing", is the fact that too many "hack and trash" wannabes out there are cutting everyones throats, trying to make a buck , quality is a low priority. Things like being code compliant and being trained to do a quality install, do not always matter! The lack of quality and a focus on low price, not quality means everyone fights for scraps.
Geek squad has positioned themselves as a quality operation. Their published prices ensure that they do not spend time with "fishing expeditions" and competing with bottom feeders! Laugh if you want, they have a plan and it seems to be working!

[satnad]

Do you? How do you do it?

Don't go and look at such small jobs for free - it is better to wait and give a free estimate on something bigger, worthwhile. On small jobs, I tell the customer "we just go and do it (if you want) when we have a chance - we charge $100 for the first hour and $65.00 thereafter. Many times when quite busy I just say min. service call or small job is $200.00 good for 2.5 hours or less.

[srblx]

Hal: if you are keeping up to par on local trends, the day we need geeks on our crews is already here. Look at all the smart homes cropping up and then look at how many electricians actually know how to do the bundled packages.
In my little area of Ohio we have over 150 electricians and maybe 15 of us can wire a smart home.
Steve

[bradleyelectric]

Don't go and look at such small jobs for free - it is better to wait and give a free estimate on something bigger, worthwhile. On small jobs, I tell the customer "we just go and do it (if you want) when we have a chance - we charge $100 for the first hour and $65.00 thereafter. Many times when quite busy I just say min. service call or small job is $200.00 good for 2.5 hours or less.

I charge more than that If I'm going to tell them it is hourly $105/hr. I'd rather give them a price to do it if it is something I think I can get more for. I'm not going to go look at a $200 job to estimate it if I don't have to. Can't think of any reason why i'd have to.

[brantmacga]

I make more money doing commercial jobs between 3K-14K than I do on 100K jobs. Figure 100K jobs at 10%. I can make 50% on the right small commercial jobs. I did a rush job at a national toy store in the last 30 days. Labor cost me $1200. materials were under $5K. Price was close to $29K. Granted that was an unusual bid, but I certainly make more working directly for business owners in that price range. Second to that is commercial projects for GCs in that price range. I can price them at more than 10%. Are you talking about new construction over 100k? How do you price them? I don't give away the small residential service work. I can make pretty good money at it. I do not try to be the cheapest guy doing it.

i've never done a 100k job, but just did a small 20k job that went right along w/ what you're saying.