Beginning just three years ago, some large firm legal fees reached that amount - about $17/minute - providing fodder for legal bloggers, and Internet articles on a variety of topics, including new marketing opportunities and excessive fees for bankruptcy matters to name just a couple. Only senior lawyers in the largest firms actually charge that much, and that's to large companies on non-commoditized work. What about the rest of us? What makes a service worth that much to us? On my daily walks with Sam, we have a lot of epiphanies. Here's one we came up with just before a Nor'Easter looming on the horizon. And no, this isn't a rant about lawyers and their fees.
This is about snowplowing. I can only talk about the Boston area. Here, snowplowing costs anywhere between $35-50 per 3 inches of snow per driveway (the rest of you can fill in your own numbers). The average time per driveway - 3-5 minutes.
Here's what's interesting to me. Why is a homeowner willing to pay about $10/minute to anyone with a snowplow, yet would complain about that rate for most other services. I applied the Trust Equation to this question.
- Credibility: We'd prefer they not wreck the lawn or dig up the driveway, but if they do, well, things happen. We do want them to actually clean up the snow though.
- Reliability: Jackpot. We're paying for them to show up. Fast, and often if needed. If they show up relatively on time, they're worth it. If they don't, they're not. Simple as that.
- Intimacy: No need to empathize with us or share. Just do what is a straightforward job.
- Self-orientation: If they want to tell us how great they are, it's fine-just do the job.
This is a transaction, so Intimacy and low Self-orientation just don't matter. However, Reliability is so important that we're willing to pay more per minute than just about any other service we get. Credibility is important only in that the job be done reasonably well.
This made us think-where else is Reliability and Credibility so important that we're willing to pay extraordinarily high rates so we can get it? Here's our very short list:
a. Ambulance services. This is way out of line on a per minute basis. We're paying for the competency to be available when we need it. Imagine if the costs were less, and they were only available at certain times. We have to pay more so they're ready when we need them.
b. Travel-last minute. When you have to get home fast, you'll pay multiples of the regular cost. I was in Dallas, and was required to stay 4 hours later than my flight. My round trip was about $350. My return flight 8 hours later on the same day was $1800. I wasn't happy but I was willing to pay it. While air travel is not incredibly reliable, it's more reliable than alternatives to travel long distances. I knew I'd get home.
Conclusion? Time sensitive needs merit higher rates, particularly where there are limited resources (like snowplows during a storm, planes to a specific destination, ambulance services), knowing you can use the service and it's reliable is worth whatever it costs up to a point. What that point is depends on our need at the time.
This post was written by Stewart Hirsch
Stewart Hirsch is an Associate with Trusted Advisor Associates LLC , and heads its Trust-based Coaching practice. He is founder and owner of Strategic Relationships. Read more about Stewart at http://trustedadvisor.com/consultants.stewarthirsch/.