Let’s say you’re coming home from work and you get to your front door, fumble for your keys and can’t find them. You look in all your pockets, in your purse or briefcase. You even go back out to the car and check under the seats, in the glove compartment, in the cup holders. Nothing.
You don’t know how to pick your own lock. So you pull out your phone and call for help. Fortunately, in 20 minutes Joe the Locksmith is at your door. Now, Joe is an experienced professional who’s picked thousands of locks. He kneels down at the lock, works with a couple tools and voilá, your door is open.
The whole process only took about five minutes. But when Joe writes you up an invoice for $75, you’re shocked. That would add up to a rate of about $900 an hour!
Of course, there was the travel time and house calls are always expensive. But still, isn’t that a bit much? Well, you’re certainly not giving Joe any tip after a rip-off like that.
Enter the apprentice
OK, now imagine another scenario. Let’s say Joe the Locksmith was busy when you called. So he sends his new guy, Tito the Apprentice. Tito takes 45 minutes to get there, because he doesn’t know the city well yet. Once he arrives at your door, he pours out dozens of tools on the floor. He fiddles with one after another. He grunts and groans. And then, after about half an hour, voilá, your door is open.
But your lock is broken.
Tito goes out to the truck, comes back with a new lock and installs it in your door.
All of Tito’s work has taken about an hour and a half. He presents you with an invoice for $225. You smile, thank him and hand him $20 extra as a tip. Tito worked so hard for you. It must’ve been a complicated job. He earned his money.
Paying more for less
This story makes us think about how we determine value. Sometimes, we are very poor judges of value. Especially when it comes to services, we think that more hours or more work mean better quality, when in fact, it may be just the opposite. Incompetence may take longer and work harder than skill.
It’s different to sell a service than it is to sell a product. Maybe that’s why so many service providers, from accountants to website designers, try to repackage their offerings as products. Nobody cares how long it took to create an iPod or a microwave. The value is tangible.
We’d all rather pay less for higher quality. But all too often we find ourselves paying more for lower quality, as Dan Ariely, economist and author of the book Predictably Irrational, explains.