The €200 Nail
‘That’s very expensive!’ or ‘You’ll have to sharpen your pencil there.’
These must be two of the most common responses business people hear when they mention price to customers.
Have you heard them from your customers?
I have often had conversations with clients about people haggling over price. And this story came to mind. Even if you’ve heard it before, it’s worth hearing again.
A woman had a squeak on her hallway floor for years. Numerous tradesmen had come to look at it but none were able to fix it. Then somebody told her of a man who could fix her squeak for good. The man called to the house and spent a few minutes walking around her hallway. Then he walked to a spot and hammered a nail into the floor. He asked the woman to walk across her hallway. She walked across and was amazed to find her squeak was gone.
She was overjoyed.
Overjoyed that is until the man told her his bill was €200.
“But you were only here for a few minutes,” she said. “How can it be €200?”
The man took out a pen and paper, wrote for a minute and handed the paper to the woman.
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It read: Nail €2. Knowing where to put the nail €198. Total €200.
The moral of this story is that knowledge carries a value. Knowledge that can help people has a value. Knowing how many business people approach pricing, I could see a few people only charging this woman €10 or €20 for this job.
They would think like the woman did, ‘Ah sure it’s only a few minutes. I can’t charge the woman more than €20.’
In business, you need to be more like the tradesman and value what you do.
Reflect the value of what you do in your selling price.
Neil
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Sourcing Property | Changing Lives???
1 年This is something so many can struggle with. Perceived value, actual value and who you want to work with. I never haggle on services I engage with as I want there to be fair exchange and oftentimes in my business when it has appeared seamless, it is perceived as "easy" but it's quite the opposite! I also think there is validity in not trying to convince people as to why they should pay. Sell yes, but not justify, and I still have to learn more about the value I drive for others being okay to charge for. They either get it... or they dont!
Ireland - Cloud Based Document Processing Software - Digital workflow specialist - Docuware Partner - Elite Document Solutions (Irl) Ltd
1 年All those years of making mistakes and getting things wrong which carried a cost and we had to put it down to our training budget - I agree it’s really important we value the information we have obtained on our journey - just because we solve the challenge quickly the value is in the experience we bring to that challenge
Furniture designer/maker, musician, adult educator, yoga teacher.
1 年As a fine maker, there's nothing I hate more than being asked to " sharpen my pencil". If my pencil's not sharp, your furniture isn't going to be made properly. I've also heard lately - work out your price, add margin and vat then another 20% for the fallow times.
?? Helping B2B enterprises eliminate revenue + margin loss by optimising their pricing, guided selling and quoting processes with neural network AI at PROS ??
1 年Value-based pricing in action!
North American Sales Director at Carey Glass International
1 年Been there, done that! Pricing solely based on time undermines the value of our knowledge. Let's educate customers about the results we deliver, ensuring fair compensation.