Why the plumber can charge more ...

[rjwag at pacifier.com]

Highly cogent, if humbling.

Thank you,
Mike Wagner
Acrylikey, in behalf of my beloved, but sadly deceased bro.

> 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"
>>
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