Sliding Scale?

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jeff43222

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Minneapolis, Minnesota
I'm curious if anyone lets their bid price be influenced by the perceived ability of the client to pay. In my business, my clients represent the full spectrum -- from very wealthy to very poor. I've worked in gorgeous homes in very nice neighborhoods to total dumps in bad neighborhoods. I pretty much bid every job without regard to the status of the client, but lately I've been experiencing some extremes in my clientele and it got me wondering.

[ June 06, 2005, 09:23 PM: Message edited by: jeff43222 ]
 
Re: Sliding Scale?

In my opinion, adjusting price based on any prejudice is certainly unprofessional and borderline unethical. Can a barber charge more for a client that pulls up in a Lexus and then later charge less for another client that pulls up in a Pinto?

We had a recent case here in Florida where a non-local contractor began offering services to persons with damaged homes after the hurricane. After a few complaints, the contractor was charged with "Fraud, deceit, or misconduct resulting in the monetary harm to a customer". The contractor was fined $1,500 and had their license suspended for 6 months.

Basically, the state determined the prices quoted and payed were "in excess to the typical and historical practices of the contractor".

In short, make a profit, run a good clean business, and don't price gouge people during and after emergencies.
 
Re: Sliding Scale?

I see nothing wrong with a "charity" case once in a while as long as you never overcharge a customer. My wife used to do that with her clients and thought nothing about it. I don't think it is a problem with "undercharging", it is the "overcharging" that the government has a problem with and we all call it "price gouging" (you know, like buying gasoline). :mad:
 
Re: Sliding Scale?

I wasn't referring to anything like price gouging, which I think only really applies in emergencies. I was thinking more along the lines of a wealthy person calling me in for an estimate for routine work, not someone in a desperate position. So if Wealthy Guy wants work done, it ethical to bid the job high with the idea being "Hey -- he can afford it." At what point does a high bid become price gouging? I certainly don't have a monopoly on electrical contracting with my one-man shop, and I'm pretty sure I can bid jobs however I see fit.

One thing I have noticed, though, is that dealing with the wealthy is often more of a pain than dealing with people of more modest means. Every time I've had hassles getting paid involved wealthy people, yet whenever I've worked in bad neighborhoods, the clients have been like, "So how much do I owe you?" and paid me in full immediately. I've heard similar stories from contractors in other trades, as well. They have even avoided advertising in the better neighborhoods because of the hassle of dealing with the rich folks.

But sometimes I get called to someone's house and find myself grateful that I don't have the problems they have. I've had a couple calls recently where the homeowners have had serious medical problems, and for them I went out of my way to find a way to solve their problems without it costing them too much.

Then I think about the incredibly fussy/irritating rich woman I did work for recently. She whined when I told her she couldn't have some of the things she wanted because of code issues, and I knew that going out of my way to try to find a solution would be way more trouble than it would be worth, so I scratched some of the work and knocked it off the final bill. I was more than happy to make less money than I planned on for that job.
 
Re: Sliding Scale?

I'm just a one guy shop, and tell my full retail, 2 income families they can 'loan me out' out to elderly or fixed income folks, and I will contact them back if neccesary for safety.
I have ended up working some for a blind lady this way who became my friend. I really would rather work for half my hourly rate and not have someone's home burn down.
My retail customers seems to appreciate the idea, and knowing they support a craftsman who does some 'charity with dignity' jobs. I always write a reasonable, costs plus ticket just in case my insurance needs to kick in.
I tend to be only average diligent on my rounding and the like on full retail tickets, still fair, but I don't worry myself to death on estimating supplies or the like.
Like your hard pay jobs, I seem to have trouble with Doctors. I also will reward someone who thought through my work and comfort: moved stuff, cleaned the work area, fixed me a drink, just generally treated me good.

[ June 07, 2005, 06:03 AM: Message edited by: tshephard ]
 
Re: Sliding Scale?

Jeff there is a certain area of town where I work that is just what you are describing. The very rich live there and they all ways want to be very demanding. When I work there I bid twice as high and only end up doing three times as much work. This is not price gouging it charging for what you know is going to happen ( an hour long discussion on every little item ). When you bid a job the customer has the option to use any contractor they want. When it comes to hourly rates you should all ways stay the same and also for mark up. My view is that when I work for those that might be harmed by a large bill ( the old or disabled ), I can all ways donate some free time or materials. My invoice may show the same hourly rate but I'm the one who keeps track of the time. For residential customers I prefer the middle or upper-middle class but never the really rich. The next time you are in a rich neighbor-hood look around and see how many maids, house keepers and gardeners are American and you'll know why they expect a lot for nothing.
 
Re: Sliding Scale?

I know of a couple of millionaires that live dirt cheap. I also know that most wealthy people didn't get that way by being nice and understanding (unless inherited, and that comes with other baggage).

I also worked for some wealthy homeowners that were not icks, sses, ards, itches, or whatever. However, most of them wanted what they wanted without consideration for the process. I just think that the extra special cleanup, the extra special caution, the extra special design discussions, the extra special phone calls that last so long, and all the extra special considerations need to be factored into the mix.

I think for pro-bono and reduced estimates you have got to trust your conscience, if you have one, and not give it a second thought. It is one area where over-thinking it can be a mistake. Never tell people that you are taking pity on them, it's an insult that some won't forget. If you want to tell them that you are giving them a break, be gracious and tell them that you are reminded of your mother and/or father,etc. and/or they are doing the clean up, and/or they were willing to wait for a slow time, etc.

just my thoughts

paul
 
Re: Sliding Scale?

Around here in New Jersey the price may be influenced by the area that you're working in. Is this price gouging? No. Price gouging would be if your customer had no other options and you were ripping them off. In this case if you inflate your estimate because they have a multimillion dollar address they can always get a price from someone else if they so choose. Unethical maybe, illegal I don't think so.
 
Re: Sliding Scale?

It costs extra to work in the 'hood. ...just ask any insurance salesman what the rate is for the same coverage in the worst area of your state.
Is it "gouging" - no
Is it "unethical" - no
It's the price of doing business in the 'hood.

Similarly, working in the opposite extereme is also at a premium. A prestigious address will contain various "upgrades" from hand knotted imported rugs to faux finishes applied by an interior decorator(who charge more to be NOT called a "painter"). Extra care must be taken from the moment you enter the property...you might even have to take your boots off....to the moment you exit with your shop vac and boots in hand.
Is it "gouging" - no
Is it "unethical" - no
It's the price of doing business in "Beverely Hils" (which every state seems to have at least one of now).
 
Re: Sliding Scale?

My first job was in a tv /appliance repair shop.I was taught very fast by the owner as how to charge to repair that TV.The very first factor was there address,second was how much there set was worth.Last thing involved was what it really needed.Certanly not a very Christian attitude.I will not get into his heritage and religion.Bottom line was i took home $300 a week in the late 60's , not bad for a 20 year old kid.Was it right ? Often we took care of the poor and made very little.
As to the rich ,in general they are far more demanding.Had one a few years ago that was given a very fair price on some remodeling work.I bid it with idea of me and my helper doing rough in 2 days and trim in 1 day.This was a situation where they were forced out of living in the house because of major mold problems in bathrooms.I then get the call to come ant trim but only half the job is ready but they need to move back in early.Explained to mrs rich b---- that it was bid for a 1 trip final and i would need to charge an extra $200 to do the trim in 2 separate stages.Job was over an hour from shop.You never in your life were called the things i was.On top of everything else they had not followed the plans and that led to even more charges.The poor do less complaining and as long as they pay i would rather work for them.
 
Re: Sliding Scale?

once worked for a nieghbor of a builder I do work for. I told her the hourly price a few days ahead of time. she hired us and we went in and did her "hunny do list" add a light here, cable line there. At the end of the day I gave her the bill and she cried. Tears and all. Said her doctor husband would be mad it was so much. I told her to give me what she thought it was worth. They had different contractors in there the next time I was in the area getting other stuff done to the house. Wander how often she does that. A vet sent me a check for a 1/3rd of an invoice a couple months ago stating that it was to much money and had to be a joke or mistake and he would send additional money to cover 12-2 MC and qo2020 when he found out what they were. I wrote a letter back explaining working in a commercial building is different than working in his house, as he said someone had done a year before to hang a ceiling fan and listed the material that I had no invoiced him for. I told him there was no mistake, and I would not joke on an invoice. I added a service charge as is stated on my invoices for over thirty days. I got the check 2 days ago for the full amount including service charge.
 
Re: Sliding Scale?

Originally posted by bradleyelectric:
once worked for a nieghbor of a builder I do work for. I told her the hourly price a few days ahead of time. she hired us and we went in and did her "hunny do list" add a light here, cable line there. At the end of the day I gave her the bill and she cried. Tears and all. Said her doctor husband would be mad it was so much. I told her to give me what she thought it was worth. They had different contractors in there the next time I was in the area getting other stuff done to the house. Wander how often she does that. A vet sent me a check for a 1/3rd of an invoice a couple months ago stating that it was to much money and had to be a joke or mistake and he would send additional money to cover 12-2 MC and qo2020 when he found out what they were. I wrote a letter back explaining working in a commercial building is different than working in his house, as he said someone had done a year before to hang a ceiling fan. I listed the material that I had not invoiced him for. I told him there was no mistake, and I would not joke on an invoice. I added a service charge as is stated on my invoices for over thirty days. I got the check 2 days ago for the full amount including service charge.
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Re: Sliding Scale?

It has been my experience that if you charge too little (as perceived by the customer) they will pick you apart looking for how you cut corners.

I charge a price on the high side of fair and if they don't like it, BYE! Get papers signed before working stating agreements (either lump sum or hourly) so there is no misunderstanding at the end of the job. They (customer) tend to pay more attention when they sign a paper and have no argument when the work is finished.

JMO,

HWS.
 
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