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]

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132 Comments

  • Michael Jakubik

    Price is what you pay. Value is what you receive. If you remember the price more than the experience, you didn't receive enough value!

  • Bob Port

    Michael; Business to Business " marketing, selling, etc. ................ Good news is the less we bring to the table the more we can learn from the other members...........  Asking questions when in doubt is a desirable trait......  You'll do well.                  Bob

  • Guest

    I think it just all comes down to how much are you willing to pay someone to do something you'd rather not do yourself.  We are too readily convinced these days that even the most simple things in life have to be done by a so called "professional".  

  • imppress

    Was $125 the going rate?
    The squirrel remover may be struggling.
    A premium rate indicates above average fees.

    Google might have found you another shop charging $175 who would have sent a woman in a bikini (or chippendale fer the ladies) to fetch the squirrel with you and whip up a smoothie before leaving.

    The article didn't sell premium pricing to me and lots of businesses remove their version of dead squirrels. In a day of Google, how do you get them to call you for $140 when the other guys will snag the squirrel for 125?

    My small business doesn't try for premium pricing, we mercilessly slash overhead and make margin that way. We snag squirrels and make decent coin that way.

  • Jeff Allen

    You folks nit-picking about hourly rates are embarrassing yourselves. Talk about ignoring the forest through the trees.

  • Tezzer

    Simple story., its tells me that we don't have to overcomplicate and concentrate on the basics., too much elaboration of A's and B's through to Z's. and reminds me to Keep It Simple Stupid. with Simple, Measurable Achievable Reasonable and Timely KPI's O and provide a service that somebody actually needs..

  • depaul

    Doesnt matter if calculation is wrong, its about having 1 price for the full offering , solving your customer's problem, eventually the pest guys have figured out a simple spreadsheet calculator/simulator by full price by distance where they included everything in, and this with a margin thats big enough to grow and sustain his business, nice example anyhow

  • Hank

    The analogy here is faulty, and I'm surprised no one has mentioned it that I can see. The same guy that paid the $125 wouldn't hire the same company for regular pest control work without checking his prices, references, etc. This story has no bearing on building relationships, IMO. It's a one off situation.

  • TheWobogiba

    These 125$ spent are the cost of your non quality and - no offense - laziness. Should you have taken a better  look with your flashlight, you would have found the problem yourself. So before paying a consultant to do things for you, better dig the problem yourself. You save money and make up your mind on the issue, then advise where and how a third party can help.

  • SimonR

    So, the real lesson is to look for stupid customers who are not capable of doing simple tasks by themselves and do not have good judgment -- did you really considered removing the deck for a dead squirrel -- really ridiculous!

  • s0nicfreak

    That is the basis of pretty much all business. 
    Selling clothes? Look for the customers too stupid to do the simple task of sewing and knitting their own, and don't have the good judgement to see that your clothes are overpriced. 
    Selling food? Look for the customers too stupid to do the simple task of growing a garden, and without good enough judgement to see what you're selling is unhealthy. 
    Etc. etc. etc. ... 

  • Seawolf

    New Career here, all I need is to find a supply of dead squirrels, a long pole and a neighborhood with porches.

  • tsnorquist

    What this story taught me: you don't have the basic skill set to pull up a deck board, nor have a moderately decent flashlight & tools to pull a dead rodent out from your porch.

    All I can say is... "Rich people lol".

  • Macon Childress

    Really mister,

      Are you trying to justify your lack of endeavour to remove the dead animal yourself ?  Not everyone has money to give someone for 5 minutes of work of anykind, much less removing a simple, poor little dead squirrel yourself.     Oh well folks like you ......I swear is why our employment status, and all that outsourcing/offshoring is going on.

    Thankfully that sorry ass crap is finally, yet slowly, getting around to the 360 degree turnabout.

  • Hakan Nilsson

    There are no 5 minutes job when hiring a company. Lowest time is 30-60 min.
    Your 125$ also includes transport and administration costs. It's very cheap (i live in Sweden).

  • A Krueger

    As fas as a customer realy need your product or service, he find a way to pay for, no matter how much it is.

  • Michael Clapp

    When it's something you can't fix sometimes you have to moneywhip it. $125 is a cheap moneywhip.

  • Joe

    Here's the same story presented slightly differently.

    Joe worked at the company for 30 years after which they gave him a big party and the gold watch.

    Several year passed and then Joe received a call from the company about the machine he maintained for all those years. Nobody could fix it.  Joe would be paid any price to fix the machine.

    Joe went in.  He looked over the machine.  Listened to it work.  Placed his hands on it and felt the vibrations.

    Joe then took out a large hammer and smacked the machine as hard as he could on the top corner.

    Magic !!  The machine started working perfectly.

    Joe gave the boss a bill for $5000.

    After looking at the bill, the boss complained that Joe only worked for 10 minutes and wanted such a large fee.  The bill must be itemized in order to justify the cost when all he did was hit the machine with a hammer.

    So, Joe gave them a breakdown of cost.
    1.  $100 consulting fee
    2.  $4500 for knowing where to hit the machine