What We Can Learn About Pricing From a Dead Squirrel

Posted by Rick Gelinas on 9/8/2012 to Commercial Carpet Cleaning

I recently read an interesting business article about pricing. It made me think about our industry. The story relates to charging a highish price for what was perceived as a very needed service. It's a story about a pest removal company who removed a dead squirrel from underneath a porch. The service reportedly took 5 minutes and the bill was $125. And the homeowner was delighted to pay it. 

Click the link to read the Fast Company Article:

http://www.fastcompany.com/3000999/what-dead-squirrel-taught-me-about-premium-pricing?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+fastcompany%2Fheadlines+%28Fast+Company%29

This begs the question... are you charging what you're really worth for your services? Im not proposing that you spike your prices just for the sake of raising prices. But if you build a valuable service thats conveyed as top-notch service, then a higher price is reasonable. In the case of the squirrel man, all he brought to the table was a flashlight and a dead animal grabbing tool. I think most of us are bringing more artillery than that when we show up to provide our service. 

Build a quality service from top to bottom, and then set your prices in terms of what youre worth. Like the removal of the dead squirrel, we are providing services that improve the quality of their environment. This improves health and morale. It makes their business more presentable to their customers. And it extends the useful life of their carpet. The benefits we bring them are huge. Like the person who gladly paid the price for the removal of the dead squirrel, if we present ourselves as professionals and deliver excellent service, our clients will be happy to meet our bidding too. 

I hope you enjoyed the article, and hopefully it got the wheels turning. Let us know what are your thoughts about pricing? Do you agree with the idea of premium pricing? Please leave a comment below.



Jamie posted a long reply to this Blog Post below. However his message was too long for the blog software and it got cut off. He emailed me privately and sent the full text. So here is what Jamie wanted to include in his comment. It's some excellent information, and I agree 100%. Thank you for your feedback Jamie!

Here are his comments...

_______________________ [Beginning of Jamie's Comments] _______________________ 

I have spent many years in corporate sales & marketing and the one concept that I was lucky to be taught very early on by one of my business mentors who I worked with for 8 years was PERCEIVED VALUE. This concept applies to any product or service that is sold anywhere. Most people (not everyone) make up their mind based on this concept without even knowing it.

How can we obtain a higher perceived value for our service???

Number 1 would start with us as individuals. Do we present ourselves professionally? Ie: do we wear a professional uniform or do we turn up in jeans, a polo shirt & dirty shoes or something like that. Are we clean shaven or at least well groomed. Are we well spoken & have a professional manner? Do we demonstrate that we are well trained and knowledgeable on our service or do we just concentrate on giving a price. The list goes on but you get the picture.

If those things are not present there is not a snowballs chance in hell we will ever get past the gatekeeper because the people that the gatekeeper puts forward to the decision maker reflects directly on them. No chance Joe Blogs with jeans & t-shirt is getting through.

Ask questions that the gatekeeper won't know the answer to and push nicely but insistently for answers (this alone may get you through to the decision maker) and also solidifies your professionalism. Again there are so many tactics here, too many to list.

Once past the gate keeper, you repeat the exact same process with the decision maker to raise that perceived value.

Perceived value has very little or nothing to do with process it has everything to do with the individual in a service industry like ours.

Above all don't act desperate. In fact if anything, tell them that if you can't get the answers to questions you need that you may not be able to quote. I often tell people "I'm not that desperate for work that I will quote without the appropriate information or talking to the people that I will be working with, my reputation is more important to me" indirectly threaten to take something away from people and they will want it all the more (it's human nature) as well as having raised yourself to their level or beyond, because when you walked in, you were just another cleaner.

Implement perceived value and your bottom line will increase more than you ever thought possible. It's true. Doing this means price has been placed as a minor consideration and they want the person who has built that confidence & perceived value. Value is absolutely, never ever about cheap. It's a mindset that needs to be broken with you first and then the client.

________________________ [End of Jamie's Comments] ________________________ 

Comments

Date 9/8/2012 8:18:44 PM
David Edwards
I wholeheartedly agree, Rick. Far too many of us are basing our prices on what "the other guys" are charging or what we think the economy is like. Screw the economy and forget the other guys. My service not only provides the benefits you mentioned, but it increases the efficacy of their janitorial services since there's no residue left behind to attract and hold soils - and that makes everyday vacuuming more effective. It also saves them money in the long run on their carpet cleaning just
Date 9/8/2012 9:53:51 PM
Jamie
Hey Rick, This is a post that I added to the Aussie Forum regarding commercial quoting (although I apply it to every part of my business), I thought I would share it, as it seams pretty applicable. I have just copy & pasted the post. I have spent many years in corporate sales & marketing and the one concept that I was lucky to be taught very early on by one of my business mentors who I worked with for 8 years was PERCEIVED VALUE. This concept applies to any product or service that is sold
Date 9/8/2012 9:58:11 PM
Jamie
Rick, There must be a limit on the number of words I could add as 90% of the post above did not appear. sorry.
Date 9/18/2012 2:09:43 PM
Christopher Garrison
Value is almost Priceless. I love seeing something transformed but without the income from my hard work I would not be in this industry. I have fallen captive of belittling my services value in the past but the longer I work for individuals that hold value over pricing the easier the work gets because they generally take care of there facility or home better. Sure I still get the occasional "now give me a good deal" but what they really want is the excellence in your work and the price comes in
Date 10/15/2012
Jeff Madsen
Great points all. When you start with designing the service experience from the clients perspective instead of your own the price will resolve itself if you know your numbers. It really is more expensive to offer great customer service and a great service experience. The nice thing is it's generally more profitable for you and much more satisfying to your client, price notwithstanding.

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