Why the plumber can charge more ...

Steve Brooks smbrooks at sprynet.com
Wed Feb 13 16:37:00 MST 2008


I can't help you guys with piano tuning or rebuilding, but perhaps I can 
lend some insight into the price of a piano tuning ...economic analysis 
is my beat.

/For the average home-owner, piano tuning is not seen as a "vital" service,
in the way that fixing a faulty domestic appliance or service is.  If the
gas or electric stove is bust, it has to be fixed, or no dinner that
night. If a drain is blocked, it has to be unblocked.  So the persons
doing those jobs can afford to charge a hefty call-out fee and in addition
a substantial hourly (or even quarter-hourly) rate - even though fixing
the stove may mean a very low-skilled part replacement. - David

/*It all boils down to supply and demand ...*

Supply and demand for tuning will be equal at some market clearing price (your fee). David addresses the demand side of the supply/demand equality. All of the services he uses in his example are relatively unregulated, open markets and all are free to seek their efficient market clearing price (their fees). Without price fixing, unions, government regulation and other means of market coercion you can only charge what the market will bear. As piano techs, you aren't just competing among yourselves, you are competing with everything else the consumer can spend his money on.

Demand for your services depends on a concept called marginal *utility*. Let's just call it utility. In each of David's examples the repair has high utility - the buyer wants uninterrupted access to food, sewer service, electricity or for that matter, television, weather protection, heat and air conditioning and so on. The consumer must allocate his limited funds according to the utility of each offering. For the average home owner, the utility of having his piano tuned falls well below that of David's competitive examples. (However, a well tuned piano has high utility for a concert, recording studio and for some private owners. So, no, pianos will not disappear from the music scene for lack of tuning.)

*Urgency boosts utility.* Water has a certain utility in daily use for bathing, washing etc. but if your house is on fire the utility of water is worth rather more to you and one will pay considerably more per gallon for its use. For your services, there really is no urgency - an out of tune piano is an annoyance, not a problem in most cases.

*Why there is a limit to what you can charge - *the supply of piano tuners.

The supply side of the equation is rather more interesting, I think. It takes great skill to do what you folks do, so it is tempting to conclude that the skill should be compensated commensurate with the effort required to obtain it. But, in a free market ... that just ain't so. Given a certain level of demand, compensation depends on how many of you there are. How many musicians do you know who are extremely talented and skilled who are starving? How many of you crossed over from playing to tuning to improve your income? What do you have in common with most musicians, artists and writers? In a word, lifestyle.
*
The supply of piano tuners is ample* because of the attractiveness of the profession. The work is clean, often interesting, infinitely challenging, and for many provides the freedom of being in business for yourself (regardless how it seems at times). Most of you are well and broadly educated, interesting conversationalists and often social. Your profession provides association with other similar personalities.

Most of you could choose to be almost anything you wanted. Many have given up better paying careers to become tuner/techs. In David's example - plumbers, appliance repair persons, electricians, auto mechanics or a host of other trades pay better (for the business owner at least) and are easier to practice (a plumber never has to explain why his services are needed). You don't choose to do that because that kind of work is dull, dirty, loses its challenge early and lacks prestige. Maybe you don't like punching a clock.

*Lifestyle*, that's why you tune. There are always exceptions. From an economists point of view, you get a lot of your compensation in the form of intangibles ... lifestyle. Choosing this profession involves a lot more than maximizing your income, yes?

To summarize: *You are in a profession whose product has low utility and the supply of piano tuners is ample*. So, the market clearing price of your services is lower than it would be in other professions for which a similar amount of effort is required to gain proficiency. That the average customer wouldn't know a good tuning from a rutabaga doesn't help and allows competitors with poorer skills to compete at a competitive price. This has to be the most galling aspect of the craft. 

**Bonus: **This same analysis can tell you whether or not you should invest in Yellow Page advertising. I've seen that come up on this list a few times.

*Yellow Pages or Not?* The short answer is no, nothing beyond a one line listing. The investment of your resources will pay better dividends elsewhere - here's why:

Back to consumer urgency. Unless you already have a service provider you like, you will quickly find yourself thumbing through the phone book under plumbers, electricians, sewer service or appliance repair. But, if things are less urgent, you'll shop a little longer and have more sources of information for roofers, painters, small engine repair - you get the picture. You might call your insurance agent, a friend or another tradesman for a recommendation. 

Unlike *searching for plumbers* when your toilet stopped tight, one can afford to leisurely shop for a piano tuner/tech. A broken string or howling unison can be tolerated if not enjoyed. You are likely to seek the advice of other pianists, distant tuners, music departments, music stores and music teachers. So, your time (which is money) is best spent building a network of referrers.

Respectfully,

Steve Lookerson

-- 
"The masses have never thirsted after truth.  Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim."  Gustave Le Bon from his 1896 book "The Crowd"



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