Questioning the Billable Hour part 2: The Carpenter’s Invoice, A Parable about Pricing



Posted: Monday, November 23, 2009

by
Articulate Consultants Inc.

Winnipeg, Manitoba, 1975: A man owned a house with a squeaky dining room floor. He paced that floor listening intently for the location of the squeak.  Each time he thought he found it, he would pull up the carpet and drive a nail into the floorboards. Each time, the squeak eluded him.

 Eventually, he called in a carpenter.

 The carpenter paced the floor, pulled up the carpet, and drove a single nail into the floor. The squeak disappeared.

 The carpenter billed the man $50. The invoice said, "Driving one nail: $3. Knowing where to drive the nail: $47."

 Having experienced how the problem had already caused him more than $50 worth of trouble, the man happily paid right away.

Just as many people prefer the do-it-yourself approach to many problems to avoid the uncertain - and possibly high - cost of getting expert help, so this man avoided calling a carpenter and tried to fix the problem on his own. As often happens when people try to fix problems on their own, the home owner succeeded only at getting more nails in his floor, rather than solving his problem. Because of his frustration and failure, calling in a carpenter became worthwhile.

 The point of the story, however, is not to abandon the do-it-yourself approach in favor of paying experts. Rather, the carpenter's invoicing method hit the nail on the head. Anybody can drive a nail. The value is in knowing where to drive the nail. Thus, the carpenter's expertise solved the problem and was the source of value.

 The man happily paid what it was worth to him, and the invoice identified the source of the value - nothing to do with the amount of time taken, except that there was value in the problem being solved quickly.

 - Glenn R. Harrington, Articulate Consultants Inc.

http://www.articulate.ca/

Glenn Harrington is the Principal Consultant of Articulate Consultants Inc. Since 1996 he has specialized in consulting on authentic key messages as the basis for effective marketing, brand management, and client loyalty.

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