Page 1 of 3 123 LastLast
Results 1 to 15 of 37

Thread: What makes people so cheap?

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1

    What makes people so cheap?

    I ran into a situation the other day that just about offended me when it was said. The more I have thought about it, the more puzzled I have become.

    I run a business. I charge what I think is a fair rate. We have $50,000 worth of machinery to produce the products we do. I'd like to think that $60-70 per hour is fair for our business. When I go into other places that do the same thing we do, I always see signs on the wall that say things like "Our shop rate is $90 per hour".

    So all in all, I guess we are at the low end for our business.

    So I'm in a meeting about 8 months ago, and someone asks this computer tech guy "What's your rate". He says without blinking an eye, "$130 per hour". At the time I thought "Wow, that's pricey, I can't afford him", and the person that asked said "Well, that's about right for IT work".

    So, I thought I was just out of the loop.

    Fast forward to last week, I'm in a meeting with the owner of that company, and others. He whips out some marketing material he had printed. It was a lot of stuff, lots of pages, etc. He then says "Yeah, and I saved a boatload of money on this. I got it online and I saved 75% over what my local printer wanted for it".

    That really offended me. Why, you ask? Yeah, I thought you would.

    I can't get past that level of arrogance. The printer has $50,000 digital printers, inks that costs $1500 a pop, etc. So they have to make a living. Do you think if they charged you $130 per hour, that would be okay? Apparently not. Apparently it's only okay to make $130 per hour if you are him. If you supply services to him, then he would like you to make $17.50 per hour. That's the printer's $70 per hour rate, cut by 75%.

    Am I wrong, or is that extremely arrogant? Would you be offended if someone told you that they saved 75% over your cost by going to the internet, and then handed you a bill for $130 per hour?

    Just curious and opening up a discussion while a job is running (bored).
    Lasers : Trotec Speedy 300 75W, Trotec Speedy 300 80W, Galvo Fiber Laser 20W
    Printers : Mimaki UJF-6042 UV Flatbed Printer , HP Designjet L26500 61" Wide Format Latex Printer, Summa S140-T 48" Vinyl Plotter
    Router : ShopBot 48" x 96" CNC Router Rotary Engravers : (2) Xenetech XOT 16 x 25 Rotary Engravers

    Real name Steve but that name was taken on the forum. Used Middle name. Call me Steve or Scott, doesn't matter.

  2. #2
    I would not be offended.

    Customers are by nature drawn to the least-expensive solution to their particular problem.

    For instance, I have exactly ONE decent tool shop in my area. One. I would love to do more business with them so that they continue to be the ONE decent tool shop in my area.

    But when the difference between them and the internet is more than $100 or more than 30%, I generally turn to the internet. If they go out of business, I'll be without a "right-now" solution when I need a router bit, etc. But I don't see why I should pay a lot more for the exact same product or service. I'm just a consumer, after all.
    Deflation: When I was a kid, an E-ticket meant I was about to go on the ride of my life. Today, an E-ticket means a miserable ride.

  3. #3
    Our economic system encourages people to seek the best value, which translates to increased productivity. So if one company can produce a widget for $10 and another charges $20 for the same widget, the company charging $10 will prosper and the company charging $20 will not. The $10 company is more productive.

    Productivity generally means a better standard of living. If the $10 company can produce the same with less workers, those workers will usually make more than the employees at the company charging more, perhaps because they're doing more specialized tasks requiring more training.

    Productivity gains come from competition in the market, and increased productivity means a higher standard of living.

    So I would not be offended by the person who was able to buy something for less money. That's what our economic system encourages them to do.

    Mike

    [To answer the question in your title, "What makes people so cheap?" - Our economic system makes people so cheap and it works pretty good. Our economic system is not about "fairness" but about productivity and lower prices.]
    Last edited by Mike Henderson; 07-16-2009 at 8:56 PM.
    Go into the world and do well. But more importantly, go into the world and do good.

  4. #4
    Join Date
    Mar 2006
    Location
    SoCal
    Posts
    22,492
    Blog Entries
    1
    We all want Nordstrom service and Wal-Mart prices; we are doing ourselves in. For an equal product or quality of service it only makes sense to get the best value. What I find disturbing is folks who get upset when their $10 internet printing job doesn't equal a $50 local job ;-)
    "A hen is only an egg's way of making another egg".


    – Samuel Butler

  5. #5
    Join Date
    Apr 2003
    Location
    London, Ontario
    Posts
    302
    Here is my own story,

    I had a customer come in the store and the first thing he asked is why he should buy here (only independent left standing in a city of 300K) instead of the BORG. I told him because our prices are the same or less, we service what we sell and we know what we are talking about.

    He came in to buy an impact and a circular saw. I spent over an hour with this guy showing him the various brands we sell and allowing him to test various impacts and drills. He had asked about a Makita accessory kit ($50) and I told him it was free with any Makita purchase over $500. He ended up buying an LXT401 minus the 'cip saw and the flashlight (hammer drill and circular saw in kit bag). The price was really cheap. I had credited back the two tools he didn't want at full pop.

    I was out at a school yesterday looking at guarding issues. When I got back, I noticed there was a returned Makita kit. Turns out he returned it saying he found it at a lower price at the BORG. I asked today if the free accessory kit came back, and it turns out it didn't. I don't blame the staff member, I had commented to everyone that it was the hardest sale I had had in a long time and the staff member figured out this guy was him and was in a hurry to attend buying customers.

    There is no chance he found it at a lower price. He found something of a similar description and assumed it was the same.

    How would you deal with customers like this?

    David, Tool store Manager.

  6. #6
    Quote Originally Posted by David Eisan View Post
    How would you deal with customers like this?

    David, Tool store Manager.

    Well, hopefully this guys face is burned into your brain. Next time he shows up ask him for the bag back. If he refuses, lead him to the door and don't do business with him. He basically stole from you. Plain and simple.

    I am not going to go head over heals to try to sell someone my service. If they can't easily be convinced by simple facts and hard knowledge, then let them shop somewhere else.

  7. #7
    Join Date
    Mar 2009
    Location
    Seabrook, TX (south of Houston)
    Posts
    3,093
    Blog Entries
    3
    Quote Originally Posted by David Eisan View Post
    Here is my own story,

    I had a customer come in the store and the first thing he asked is why he should buy here (only independent left standing in a city of 300K) instead of the BORG. I told him because our prices are the same or less, we service what we sell and we know what we are talking about.

    He came in to buy an impact and a circular saw. I spent over an hour with this guy showing him the various brands we sell and allowing him to test various impacts and drills. He had asked about a Makita accessory kit ($50) and I told him it was free with any Makita purchase over $500. He ended up buying an LXT401 minus the 'cip saw and the flashlight (hammer drill and circular saw in kit bag). The price was really cheap. I had credited back the two tools he didn't want at full pop.

    I was out at a school yesterday looking at guarding issues. When I got back, I noticed there was a returned Makita kit. Turns out he returned it saying he found it at a lower price at the BORG. I asked today if the free accessory kit came back, and it turns out it didn't. I don't blame the staff member, I had commented to everyone that it was the hardest sale I had had in a long time and the staff member figured out this guy was him and was in a hurry to attend buying customers.

    There is no chance he found it at a lower price. He found something of a similar description and assumed it was the same.

    How would you deal with customers like this?

    David, Tool store Manager.
    This is not an unusual story (except for the theft). Lots of people go to the places with friendly, knowledgeable staff to get all their questions answered and then go to the cheaper store or the internet to buy the goods. They don't connect yor knowledge and time to the price. Unfair, yes. But true.

  8. #8
    Quote Originally Posted by David Eisan View Post
    Here is my own story,

    How would you deal with customers like this?

    David, Tool store Manager.
    That's just downright dirty of that customer. As a business you may not have much further recourse once the return transaction has been completed. Obviously the guy must've waited until you weren't around to do the return, knowing you would ask for the kit. I guess he figured the "free kit" was his free gift just for trying the Makita and he wasn't being offered it at the Borg.

    It's amazing how many scruples and morals get thrown out the window when someone has a chance to save a literal dollar and they don't care what the impact is to someone else. I just try to follow the command "Do unto others....."
    * * * * * * * *
    Mark Patoka
    Stafford, VA
    * * * * * * * *

  9. #9
    Join Date
    Feb 2003
    Location
    Mtl, Canada
    Posts
    2,379
    Quote Originally Posted by David Eisan View Post
    Here is my own story,

    I had a customer come in the store and the first thing he asked is why he should buy here (only independent left standing in a city of 300K) instead of the BORG. I told him because our prices are the same or less, we service what we sell and we know what we are talking about.

    He came in to buy an impact and a circular saw. I spent over an hour with this guy showing him the various brands we sell and allowing him to test various impacts and drills. He had asked about a Makita accessory kit ($50) and I told him it was free with any Makita purchase over $500. He ended up buying an LXT401 minus the 'cip saw and the flashlight (hammer drill and circular saw in kit bag). The price was really cheap. I had credited back the two tools he didn't want at full pop.

    I was out at a school yesterday looking at guarding issues. When I got back, I noticed there was a returned Makita kit. Turns out he returned it saying he found it at a lower price at the BORG. I asked today if the free accessory kit came back, and it turns out it didn't. I don't blame the staff member, I had commented to everyone that it was the hardest sale I had had in a long time and the staff member figured out this guy was him and was in a hurry to attend buying customers.

    There is no chance he found it at a lower price. He found something of a similar description and assumed it was the same.

    How would you deal with customers like this?

    David, Tool store Manager.
    That's what makes retail such a cut throat business. The customer profited from your expertise but rewarded a the BORG with the sale. Happens all the time from my understanding.

  10. #10
    Join Date
    Oct 2008
    Location
    Webster Groves, MO
    Posts
    261
    Probably just some poor schmuck who wanted to build a super-strong mailbox...

  11. #11
    Join Date
    Mar 2009
    Location
    Seabrook, TX (south of Houston)
    Posts
    3,093
    Blog Entries
    3
    Quote Originally Posted by Stephen Musial View Post
    Probably just some poor schmuck who wanted to build a super-strong mailbox...

  12. #12
    Join Date
    May 2007
    Location
    Colorado Springs
    Posts
    2,742
    One positive trend I've noticed from our current economic situation is an improvement in customer service. A couple of years ago, almost every person I dealt with at a retail store or restaurant was a well-meaning, but completely clueless, high school kid.

    Being empty nesters, Mrs. Pat and I eat out regularly. I began to notice the service was getting better and better at the restaurants we frequented. Then I realized the staff were no longer high school kids. They were mature and experienced. Sadly, I assume many of them lost their previous jobs or had to go back to work to keep their families going. But it sure is nice to deal with people who know what they're doing! And yes, I'm a very good tipper.

    You're always going to run into tight-wad clowns who will go to extreme measures to save a dime. I think we should just ignore them. There are still a lot of people in this world who appreciate good service and will pay for it. We should work on building relationships with those people and focus on them. It's interesting that service providers in very niche markets often take customers only by referral. They don't want to deal with those tight-wad clowns. Good for them!

    My insurance agent is a friend of mine. We were friends before he became an insurance agent. When he started his business, he asked me if he could give me a quote for covering my home and vehicles. I told him he certainly could. I was happy to help my friend. And, by golly, it turned out he could save me some money to boot. I'm now his longest-served customer. I could probably save a few dollars here and there by switching to another company. But my friend provides me service no other insurer could. And that's priceless.

    Our culture has devolved into worshipping the "good deal". If I have a good relationship with a quality service provider, some clown will come along and say, "You idiot, I paid less than you did!". If his only objective in life is to save a few dimes, his life will be less abundant than mine. I think I'm still coming out ahead even if I pay a little extra for good service. Maybe more people will start to realize this as our economy, and our lives, slow down a bit.
    Last edited by Pat Germain; 07-18-2009 at 10:29 AM.

  13. #13
    Join Date
    Oct 2008
    Location
    Webster Groves, MO
    Posts
    261
    Quote Originally Posted by Jim Rimmer View Post
    'twas the Great Mailbox Debate of ought-ought that Mr. Eisan instigated.

    http://groups.google.com/group/rec.w...ailbox&lnk=ol&

  14. #14
    Join Date
    Mar 2003
    Location
    SE PA - Central Bucks County
    Posts
    65,675
    David, if the customer didn't return everything he got, then he shouldn't get the full refund, even if you have to pursue that via the credit card company. (assuming that's how it was paid for) Fair is fair.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  15. #15
    Join Date
    Mar 2008
    Location
    Palatine IL
    Posts
    257
    Quote Originally Posted by glenn bradley View Post
    We all want Nordstrom service and Wal-Mart prices; we are doing ourselves in. For an equal product or quality of service it only makes sense to get the best value. What I find disturbing is folks who get upset when their $10 internet printing job doesn't equal a $50 local job ;-)
    Very well put!

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •