IT Service – Pay as You Go vs. Fixed Fee: Which is Right for Your Business?
We’ve all been there, the system is not loading, the server is down, and (like clockwork) your most important client just emailed you with an urgent matter.
In moments like these, have you ever wondered how much money your business loses every minute your IT systems are down? According to Pingdom, the cost of downtime for small businesses ranges from $137 to $427 per minute, while for larger businesses, it can cost over $16,000 per minute ($1 million per hour).
Although it may seem unimportant, your choice of IT service model can have a significant impact on your business. Choosing between a “Pay as You Go” (PAYG) model and a “Fixed Fee” model can play a major role in your operations and bottom line.
At SMIKTECK, we operate both models, but we have a strong preference for Fixed Fee services, and here’s why.
Understanding Pay as You Go (PAYG)
PAYG IT services usually offer lower-cost monthly retainers, with all support work charged at an hourly rate. While the initial appeal of lower costs may seem enticing, it comes with some notable drawbacks. The monthly expenses for maintaining IT systems can fluctuate (often significantly), especially given it’s in the vendor’s best interest to drive service hours up! So clients bear the risks associated such as unexpectedly high service months and cashflow troubles as a result.
Exploring the Fixed Fee Model
In contrast, Fixed Fee IT services offer a sense of stability. The monthly retainer is typically higher than PAYG services, but in return, clients can expect consistent monthly costs for IT system support. With this model, the IT service provider accepts the risk associated with the time required to support the customer’s systems in exchange for the peace of mind provided. They receive as much service as they need, no matter what the Fixed Fee cost – this can often save them money compared to what they may pay for service on a PAYG engagement. Additionally, this approach shifts the technology strategy from reactive to proactive, helping to future-proof your business. To learn more about how this shift transformed the experience for our client, Avery Property, read our case study.
Why Smikteck Prefers Fixed Fee
At SMIKTECK, we firmly believe that Fixed Fee services align our efforts with our clients’ goals of achieving efficient and reliable IT systems. Here’s why:
- Prompt Issue Resolution: In a PAYG model, every call to the IT provider incurs a charge, discouraging clients from seeking help when problems arise. With Fixed Fee, we prioritise swift issue resolution, ensuring equipment is fixed promptly.
- Enhanced Productivity: Consistent IT support leads to better team productivity. When systems operate smoothly, employees can focus on their tasks instead of working around problems.
- Client Satisfaction: Frequent issues and delays in resolving them can lead to dissatisfaction with the IT provider. Fixed Fee services aim to improve client satisfaction by delivering reliable support.
SMIKTECK’s Big Idea: Aligning Costs with Service Quality
Fixed Fee IT services are an excellent choice for established businesses that value productivity, efficiency, and team satisfaction. Just like any other professional service, IT support requires resources, be it technology or personnel. By offering our services for a monthly Fixed Fee, it’s in our best interest to find the root cause of what is causing issues in the first place and also identify any potential risks and prevent them from happening.
Essentially, we take on all the risk as you are now paying for a result, not for hours of labour.
Can Fixed Fee IT Services Work for You?
To help you determine if a Fixed Fee IT service is right for your business, we’ve created a simple checklist. Download it and answer five essential questions to assess your needs and expectations.
Four Key Takeaways
- Fixed Fee IT services offer stability and prompt issue resolution.
- Consistent support enhances team productivity and client satisfaction.
- Smikteck believes in aligning costs with quality service to benefit our clients.
- We don’t do lock-in contracts. That means that we are backing ourselves to provide a high level of service keeping our clients happy and giving them no reason to seek other tech assistance.
Curious which model is best for your business? Take our quiz below to find out!