Losing Dollars in Pursuit of Pennies

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By Adam Levy

Recently, a coworker here at SnapAV was telling me about his experience with a pool maintenance company he had hired a few weeks back (shortly after moving into his house). They came out and cleaned his pool, as expected. They also let him know that there was a small part on his chlorinator that needed to be replaced. Not to worry, they assured him. They’d get the part and fix the issue in two weeks when they came back for the next service… all he had to do was OK the $89 charge for the fix. No problem.

Now, because he just moved into this house and he’s a first-time pool owner, my coworker also decided to educate himself about what this part did in his pool. Turning to Google, he quickly looked up the part. It looked like a screw-on cap (like on a bottle of juice) and based on the video he saw, it installed like one, too. And it was available for purchase for …$2.39. Problem.

He did the math. It was going to be installed during a routine service call that he was already paying for. The installation looked like it took about 20 seconds. It was available for $2.39 retail price. Hmmmm. Suddenly $89 went from feeling like a small expense, to feeling like a highway robbery. He ordered the part himself and invested the 20 seconds to screw it on. He had saved $86 and change, but he wasn’t happy at all. Trust was eroded. Questions were asked. Conversations escalated. And my coworker… well, he decided to use a different company for his pool maintenance — to the tune of about $1,500 per year.

Some of you reading this might think my coworker wasn’t being fair. And others might think the pool maintenance company wasn’t being fair. Here’s what I think: It doesn’t matter who was fair. The real point is imagining how ELSE the scenario could have played out:

Imagine if the pool maintenance company said to their brand new customer, “Sir, during our last routine maintenance, we noticed that your chlorinator needed repair. It’s a relatively inexpensive part and takes no time to install — but to roll a truck to come out and change it would typically cost about $90. Since we were already there we just went ahead and took care of it, at no charge.”

Sure, this kind of thing doesn’t maximize short term profits for the company — after all, they would have lost a chance to make an easy $86.61 in profit. But what they do gain is much more valuable: trust, appreciation and loyalty from a new customer. For a minimal $2.39 expense, they would have created an opportunity to PROVE that they provide GREAT service. And they would have made it much easier to ask for money – real money – in the future.

I’ve written things in the past about the value of surprising and delighting customers with little free things (like here). And while I’m not suggesting that you shouldn’t charge for your time, effort and experience, it is worth considering the situation from all angles (how much personal “equity” have you built in the relationship, for example) before you decide WHAT to charge. Have thoughts on this topic? I’d love to hear them.

This column was reprinted with permission from SnapAV and originally appeared here.