I Love This Story – It Epitomizes Value Pricing
I don’t know whether this is true but this is roughly how it goes:
“EVER HEAR THE STORY of the giant ship engine that failed? The ship’s owners were losing huge amounts of money because
the ship was idle and tried one expert after another, but none of them could figure out how to fix the engine.
Then they brought in an old man who had been fixing ships since he was a youngster. He carried a large bag of tools with him, and when he arrived, he immediately went to work. He inspected the engine very carefully, top to bottom. Two of the ship’s owners were there, watching this man, hoping he would know what to do.
After looking things over, the old man reached into his bag and pulled out a small hammer. He gently tapped something. Instantly, the engine lurched into life. He carefully put his hammer away. The engine was fixed!
A week later, the owners received a bill from the old man for ten thousand pounds.
‘What?!’ the owners exclaimed. ‘He hardly did anything!’ So they wrote the old man a note saying, “Please send us an itemized bill.”
The man sent a bill that read,
Tapping with a hammer…………………………… .£1.00
Knowing where to tap…………………………..£9,999.00
The owners paid the bill the next day.
If you can offer something unique or better than everyone else you can take yourself out of the price competition and customers are prepared to pay much higher prices based on the value to them rather than the cost to you of producing it.
All businesses should review their pricing structure regularly. If you need any help or advice regarding pricing please contact me at [email protected] or call 0800 689 3084
Paul Stankiewicz is the owner and principal at Paul Marks & Co Chartered Accountants which is the trading name of Paul Marks Ltd a
Limited Company registered in England and Wales (registered number 4487645). This article is designed for the information of readers
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