Why the plumber can charge more ...

[Tom Servinsky]

Steve
Brilliantly stated. Well done!
Tom Servinsky
----- Original Message ----- 
From: "Steve Brooks" <smbrooks at sprynet.com>
To: <pianotech at ptg.org>
Sent: Wednesday, February 13, 2008 6:37 PM
Subject: Why the plumber can charge more ...


>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"
>