A few years ago I was moving from Chicago to Seattle. I hired a company to move me out of my apartment in Chicago and another to move me in, in Seattle. The company in Chicago charged an hourly rate.
At the time, mired in the concept of the billable hour, I couldn’t help but think about time while they were loading the truck. I wasn’t worried about a huge bill because I’m not a hoarder. And, I’ve moved several times in the last decade so I don’t have much more than a one bedroom apartment can hold.
Nonetheless, new to the idea of pricing based on value, I pondered how simple it could be for movers to price based on value. I was perplexed why they didn’t at least set a fixed bid. At the time, I was just starting to explore the idea of pricing custom software based on value. That’s much more risky than helping someone move out of a one bedroom apartment.
The more I think about their hourly rate, the more I wonder if billing by the hour explains why most moving companies don’t offer options in the services they provide. They’re so focused on a competitive rate to move boxes in and out of a moving truck, that they don’t think about differentiating their services. They could start by differentiating their pricing. And some do use a fixed bid. But they could go further and completely decouple from cost based pricing.
Here are some really frustrating things that I just hate dealing with, that I’d love someone else to take care of:
- Recommend ways to make the move as smooth as possible on both ends, especially cross country moves.
- Come to my home and estimate the size of truck, pod, etc. I never know how big of a container I need, this is not my area of expertise.
- Schedule the transportation: moving truck, pods, etc.
- Make sure all required equipment is rented and ready come moving day. And if anything goes wrong, take care of it without telling me.
- Estimate and provide packing supplies (boxes, tape etc).
- Or even better, pack my possessions.
- Bundle cleaning services to clean my apartment once I’m moved out.
- Line up someone on the opposite end to unload.
- Line up someone to reassemble furniture and assist with unpacking.
These are just a few of the things that drive me bonkers when I move. And I’m somewhat of a seasoned mover. Can you imagine people who haven’t moved in a decade or two? What’s so hard about asking me what I hate about moving and what’s stressful. Ask me what would really mean the world to me. And then bundle some options for me to choose from.
I find myself clamoring to buy based on value. Just tell me how you can make my life better and let’s make it happen. Fortunately, I’ve found moving companies that are more “full serviced” but they never bother to tailor the service to my needs. I would love a moving company that takes 10 minutes to personalize their options. And then they can personalize their prices.
They can charge a premium and I’ll be happy to pay it if they deliver a service that meets my needs. I’m glad the premium is there to guarantee my happiness. They can go as fast as possible so long as they get the job done. That’s a win-win for both of us.
I share this story because nothing excites me more than buying based on value. I thought my mind was blown with the idea of pricing (selling a service) based on value. But I absolutely love the idea of buying based on value even more.
I was fortunate recently, to reach out to a trusted friend for help with a project. He has extensive expertise and together we were really able to hit a home-run for our customer. I say our customer, because although I hired him to help, we were and are a team to deliver value to our customer.
When we first talked about working together, I told him I didn’t want to discuss the price until he understood what I felt was valuable. I didn’t want to bias my mind with prices and jeopardize paying him too little and then not maximizing his ability to help us be successful.
I couldn’t get him to quote me options, even though I pleaded, so that’s something I look forward to the next time I buy based on value. But I absolutely love to be on the flip side of the equation. To know what it means to buy based on value. It afforded the ability to stay focused on what was worthwhile for our customer. Discussions of effort and time would’ve steered me astray.
Instead, I was able to picture what success would look like, and see how everyone would play a part in it. I never had to think about running out of money because too many hours had elapsed.
And you know what, everything went really well. We quickly delivered value to our customer. I’m looking forward to future opportunities to coalesce expertise to blow customers away.
Perhaps, if you’re interested in pricing based on value, the best place to start is buying based on value. It will help you understand what it’s like to be in your customer’s shoes. How reassuring it can be to form a partnership that’s committed to results, not effort.