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What A Dead Squirrel Taught Me About Value Pricing

Many companies worry about the commoditization of their offerings and their inability to justify premium pricing—but if you figure out how to take care of your customers' "dead squirrels," you're golden.

During the summer months, we spend as much time as we can enjoying our screened in porch. We eat our meals, read and play board games without worrying about mosquitoes. Without question, it is our favorite part of the house.

All that changed a couple of weeks ago when we noticed a strange odor coming from our beloved porch. Over the next couple of days, it grew from a mild annoyance to one of the most toxic, disgusting smells we have ever experienced. It became impossible to approach the porch without gagging. Flies were everywhere. We assumed that the smell was coming from a dead animal that was hidden somewhere beneath the porch. We never thought about it, but the 4-inch gap between the ground and the porch floor was big enough to allow an animal to get trapped.

I got as close as I could with my flashlight, but I couldn’t see anything (not that I looked all that closely).

My mother in law, having lived in New Jersey, considers herself an odor expert. She investigated the situation and was convinced that the porch needed to be torn down in order to remove the animal.
My family panicked over the prospect of an unexpected construction project. "How to save the Barons’ porch" became a neighborhood topic of conversation. On the advice of my wise neighbor, Dana Wilson, we conducted a Google search and reached out to our local pest control company.

NW Pest Control told me that they could come the next morning. If they removed the animal, the cost would be $125. If they couldn’t remove the animal, there would be no charge.

Bob from NW Pest Control showed up the next day exactly when he said he would. From about 50 feet away, he confirmed that we had a dead animal on the premises.

He grabbed his flashlight (which was much more suited to finding a dead animal than mine) and immediately told me that the problem was a dead squirrel in a hard-to-find spot beneath the stairs. With his special animal removal tools, the squirrel was gone within 5 minutes.

Our porch was saved and life could return to normal. We were overjoyed. I told my wife it was the best $125 we ever spent. For everyone but the squirrel, this story has a happy ending.

There are a number of pricing lessons that B2B companies can take from this story. Bob spent only 5 minutes with us. So the $125 we paid for Bob’s expertise was equivalent to $1500 per hour! Now, there are very few situations where I would willingly pay someone $1500 per hour. Yet I was delighted to pay in this situation. What was going on?

•NW Pest offered a guarantee that was appropriate for their business and customers. If they could not solve the problem, then we did not have to pay.
•We were in pain. The stench from the dead animal was impacting our quality of life.
•There was a huge financial risk if we did nothing. If my mother in law was correct, tearing down and rebuilding the porch would have cost at least $20,000.
•The emotional aspect of this problem was real. We were anxious about the situation and angry that we could not use the porch.
The value to us of fixing this situation far outweighed the $1500/hour cost.

Unlike how many B2B companies sell and market their offerings, NW Pest did not overwhelm us with the details of their animal removal equipment, their process for animal removal or the credentials of their technicians. They focused on our problem, guaranteed it would be solved or no charge and made it clear how they would make our lives better. Through their hiring practices, training, and equipment, they clearly invested in optimizing specific services that offer maximum value to their customers.

Many B2B companies worry about the commoditization of their offerings and their inability to justify premium pricing. They could probably learn a lot from thinking about NW Pest’s pricing model for dead squirrels.

The Takeaway: Just because you're B2B, doesn't mean premium pricing is out of reach—if you emphasize exemplary customer service.

—Author Neil Baron can be reached at nbaron@baronstrategic.com baronstrategic.com

[Image: Flickr user Dawn Huczek]