I'm considering a new pricing model.
Currently, I charge clients an hourly rate for my work. If a client prefers, I will give them a project price, but that's really just the hourly rate multiplied by estimated number of hours. If there are expenses (printing, travel, etc.) they are passed on at cost, but that's really it. My bills are very short.
But I'm thinking that's the wrong approach, and I should consider this approach. Each bill will include my time as a line item, but then I could add charges for my phone bill, my health insurance, my federal income tax, toner cartridges for my printer, electricity, water, and office supplies.
Wait, you say, that's silly. Those are overhead costs; you set an hourly rate that lets you work and cover those, right?
Well, don't tell that to Sprint, or any other telecom:
[Texas] State Comptroller Susan Combs on Monday asked Sprint to quit charging customers a fee reflecting Texas' expanded business tax, but a spokesman for the wireless phone company said the surcharge will stay.
Sprint in January began charging a surcharge totaling 1 percent of each customer's wireless rate plan called the "Texas Margin Fee Reimbursement."
The fee is meant to cover part of the money that Sprint will owe next year under the business tax expansion, said John Taylor, senior manager of public affairs for Sprint Nextel Corp.
"There is nothing in Texas or federal law that precludes us from making this business decision, which we fully disclosed to our customers and to the public," Taylor said.
"We're not breaking the law" is a, well, powerful defense of a business practice that consumers hate, isn't it?
Telecom bills are notorious for this kind of nickel and diming, where the taxes and special fees often add up to 30 or 40% of the base bill. Why? It lets a carrier say, "We'll charge you $40 a month!" and then charge you $60.
It's legal. It's also one of the reasons that people tend to loathe the companies they buy telecom services from, no matter which one they've picked. They're dishonest - not in legal terms, just in practial terms.
(It's a lot like the car dealer practice of adding a fee for "advertising" to the cost of your car. Can you imagine paying a fee to cover advertising when you buy a can of soup?)
Why don't these companies simply include these costs in their pricing, and pick a number that covers the costs of service, overhead, taxes, and profit, and charge that? Well, because then they'd lose the opportunity for incremental price hikes, like the one Sprint has just instituted in Texas, because people would notice that their price was going up.
And make no mistake about it: Sprint has just raised the price of their mobile phone service in Texas. They can call it whatever they want, but they have raised the price.
I think that a mobile carrier could attract some customers by saying, "This is what we'll charge you. Period," and then sending simpler bills out. I doubt that will happen; adding on little charges is in the telecom DNA. And with the market controlled by an oligopoly, there's no incentive for anyone to do anything innovative and consumer-friendly.
So expect it to continue. I'm looking forward to the "CEO Bonus surcharge" and the "Routine network maintenance to provide the service we promised you" surcharge and the "Toilet paper for employee restrooms" surcharge. At least they could entertain us while they take our money.