<OT> support pricing

[Kurt Wall]

In a 0.6K blaze of typing glory, Net Llama! wrote:
> I've recently been tasked with coming up with realistic pricing for
> technical support.  Currently all that we offer is support M-F 9-5
> support.  I need to set pricing for 12x5 and 24x7 unlimited
> incident offerings.  Does anyone have any experience or suggestions?

IANAA (I Am Not An Accountant), so caveat emptor:

Pricing = Cost of Service + Markup Margin

Cost of service includes (at least):
* What it costs to have a butt in a seat, even if that butt is not
  answering a call or otherwise generating revenue (personnel overhead)
* The cost of the seat (physical/facilities overhead)
* Potential cost of consumed resources when the butt *is* working a
  support incident (value add)

Markup or margin simply expresses what you think the market will bear
by way of profit on the cost of service.

So, if it costs you $75.00/hour to have a person in a seat; $25.00/hour
to keep the seat in electicity, computer, water, and so forth; and the
value add eats up $50.00/hour in additional resources, the cost of service
is $150.00/hour -- you have to make *at least* $150.00 just to break
even. Now, add, for example, 30% and call it mark-up, so your per/hour
charge becomes $180.00/hour. 

Now, suppose you look at your support history and determine that the
"typical" support call involves 2 hours time on the average. Thus, the
per incident charge is now $360.00/incident. 

Finally, you run those number against various usage scenarios to make
sure they make sense, check the usage scenarios against what you've 
done in the past, and decide if the base number you came up with works.

Hope this helps,

Kurt
-- 
"Don't say yes until I finish talking."
		-- Darryl F. Zanuck