I hate paying by the hour...
And why flat-fee pricing for virtual assistants is the most respectful way to charge a busy customer.
An extremely frustrating aspect of working with any service provider is that most of them insist on charging by the hour. Services are generally meant to save you time. But when providers charge you by the hour they are basically putting a lot of extra management time on your plate that they could save you were they to charge a flat rate.
Value For My Money
As an individual or business, you probably have a budget and If you are getting charged by the hour, you continually need to watch the clock to ensure they don't go over a certain budget, then, fight to get visibility into what they are doing with the time they are charging you for. You then need to match it all up to ensure you received good value for the amount of work that was provided to you. That’s a lot of extra mental steps that the service provider could be taking on on your behalf.
Two classically frustrating examples where service providers charge hourly rates are movers and lawyers.
My frustrating experience with movers that charged by the hour
When I recently called a local moving company to inquire about the cost of having them help me move homes, the conversation started something like this.
ME: I’m calling to find out how much you’ll charge to help me move in a few weeks.
I’m moving from my two-story town home to a two story single-family home that is about a mile away. Most everything has been boxed and moved to the garage so that it can be quickly loaded. We don’t have a lot of furniture – only the basics - two beds upstairs, a couch, and a few armoires, coffee tables, a dining room table and a buffet table.
Can you tell me about how much you’ll want to charge?
MOVER: We’ll charge you $25/ hour per mover for two moving men or $22/hour per mover for three movers. We recommend three.
ME: OK, well about how long will it take to move with two of your movers and about how long will it take with three?
MOVER: We can’t tell you that. It depends how much stuff you have, how long it takes to load, transport it and unpack it.
ME: Well I just told you all that. Don’t you know about how fast your guys are?
MOVER: All of our guys are really good workers.
ME: Well I just told how much stuff I have and that there are some things that need to get taken from the upstairs. Why can’t you give me an estimate on how much time it will take?
MOVER: Well I don’t want you to get mad if it takes a lot more time than I estimate. Most people underestimate how much stuff they have.
ME: I don’t mind if your 10% off. I just don’t want you to be 50% off. I mean you've moved a lot of people, right? Can you come take a look for yourself so that you can estimate based on your experience. Or I can take a picture and send it to you.
MOVER: No, we don’t have time to come look at every house before we move you. You need to make the estimate yourself. We charge by the hour.
Why does this scenario frustrate me on so many levels?
I am not a moving expert, the moving company is the expert; they move people every day and know things I can't possibly know.
- The moving company knows if certain guys like to talk a lot.
- The moving company knows the number of breaks each worker takes - -I hope they take a few because moving boxes and furniture is hard work
- The moving company knows how long each worker needs to rest during these breaks.
- The moving company knows how fast or how slow each person works.
Given all this knowledge, It's only natural that the moving company should be able to create an estimate for ME, not the other way around.
I suppose I could have moved myself like I did when I was back in school. I’d simply gather a few friends and estimate how long I’d need them for so that they would put aside enough time.
But it was easier back then because I had less stuff and more time. Plus, budgeting was much simpler because the cost was negligible – a round of beers if the move was easy, plus pizza if it was a bit more arduous.
In the end, I begrudgingly ended up hiring this moving company. I didn't have much of a choice since all movers charge in the same way.
As expected, I ended up wasting a lot of time managing the whole process.
Instead of working at the new home as the furniture arrived, I had to stay on site with the movers watching over the workers and managing their every move to make sure they were semi-efficient.
If the movers had charged me a flat rate they would have saved me a tremendous amount of time.
Corporate Lawyers who charge by the hour frustrate me even more than movers
I've been even more frustrated by service pofessionals like corporate lawyers who charge astronomical amounts. Anywhere from $200 to $800 per hour! Lawyers are at an even greater advantage than movers because information asymmetry is far worse.
While I can do some of the document preparation myself, that's about all I can do.
I have a much better sense for what it takes to move a box than for how long it takes to prepare a set of corporate bylaws.
The “best” lawyers – the ones that rise through the partnership ranks of corporate law firms – may not be the best at providing thoughtful legal advice. Often, they are simply the ones who are best able to make a potential client feel stupid and inferior when they ask for a cap on pricing.
A lawyer might say “I could provide a cap but then I don’t know how complex your situation might be. I’d advise against a structure that would limit my ability to give you the advice you need to protect yourself."
Fine, charge me whatever you think I can bare you arrogant @#&!!!.
Paying a virtual assistant a flat fee
Nearly every virtual assistant company out there charges by the hour, but it’s confusing and can be time consuming.
Intuitively, we know you can’t do an apples-to-apples comparison here.
Zirtual trained VAs are based in the U.S. and will probably have better output, in light of them having a better understanding of the context of your work, than will Tasks Everyday, whose Indian-based VAs simply operate in a different world.
But in either model, the hourly pricing leaves you with some of the responsibility for managing your hourly usage. We understand that spending your time counting and assessing the value of each hour would only take away from the time we hope to save you and your business.
At Prialto we’ll never nickel-and-dime you by charging you by the hour - our simple flat fee means that you can focus on more important and pressing matters, while we focus on delighting you by freeing as much of your time as we can.