Coffee heat rising

Pricing: Is it all in the presentation?

We all know the prevailing folk wisdom to the effect that if you price something a penny or two less than a round number, buyers will perceive the cost as less than the actual price. So, let’s say you need to get $15 for your Advanced Digital Doohickey to pay your workers, cover your store’s overhead, and take home a few pennies as net income. You’ll sell more A.-D. Doohickeys if you price them at $14.99 (or even $14.98, such a DEAL!) than if your price tags read $15.00.

Sounds stupid, is stupid. But apparently it works, because everything you see everywhere is priced a penny or two below a round figure.

But…are people really that stupid? Well….

So a couple weeks ago, I decided we should revise our rate schedule at The Copyeditor’s Desk. We’ve been charging a page rate that ranged from three or four bucks a page to $15 a page for the truly unintelligible.

It struck me, after much cogitation, that it would be easier and fairer both for us and for our clients if we charged a per-word rate.

The page rate had proven problematic in several ways. To start with, Microsoft in its infinite changeability has “updated” Word’s page margins from one inch top and bottom and 1.25 inches left and right to one inch all the way around. Since our rates were calculated on the old default, that translates to about a 10% cut in pay for us. So when I tell a client $X per page, I have to make sure we’re talking about the same page size. Changing their page layout, naturally, is off-putting: it looks like I’m trying to extract more than the job is worth.

And we often find prospective clients submitting copy set in 10.5- or 11-point type with half-inch margins. Interesting, isn’t it?  You want me to help you get your dissertation accepted so you can get a cushy academic job instead of working in a rice paddy or a kibbutz, but you think it’s OK to cheat me.

A word rate obviates both those problems: no more figuring out whether the manuscript fits our parameters, and no more arguing over the length altered by the font size. It’s easy for everyone to agree on the number of words, and no hard feelings are generated.

So I changed our billing from $4 to $15 per page to 2 cents to 6 cents a word, depending on the copy’s difficulty and technical level. I calibrated the word rates so they would equate to the similarly sliding page rates — the truth is, on the lower end the word rate adds up to a little less than we were earning per page.

But here’s what:

When people see a price tag of pennies a word, even though the cost adds up to the same as the page rate, they don’t even blink.

And m’dears, the work is pouring in the door. I can freaking not believe it.

Apparently, two or three cents a word looks like pocket change, whereas four bucks a page translates mentally to an extra-large latte for each page. The price is the same. The attitude to it: night and day. Or, from my perspective…day and night.

How amazing is that? Apparently it really is true that people’s perception of how much something costs depends on how the price is presented.

Do you mentally translate the cost of a $14.99 doohickey to $15? Or do you think of it as costing around 14 bucks?

A$k and Re¢eive, Revisited

If you ever need a reminder to get bids for every…single…project of any kind, here’s a tale with that a moral to it:

Richard the Landscaper proposed to remove the dying ash in front for for $1,000, down from the original $1,500 he thought the market would bear. When I asked if he would please also remove the moribund plantings around the tree’s base, cover the stump with a mound of dirt, spread some more gravel there and arrange the existing rocks decoratively, and then plant one of the baby vitex trees I’ve cultivated in pots, he added $200 to his bid. So, as I’m facing unemployment I’m looking at a total of $1,200 to take down the tree and repair the landscaping.

Welll….

I called the Desert Botanical Garden, which has a master gardener training program, and asked if they could refer any of their graduates. Forthwith came in the e-mail a list of a dozen certified arborists. So I called one—let’s call him Mike the Arborist. He just came by to view the jungle that is my yard and give me some estimates on the large amounts of pruning that need doing.

He said he would take out the dead ash tree for $500!!!!!

More ordinary tree trimming comes in the vicinity of $40 to $100, depending on the complexity and size of the job.

Covered with sharp thorns the size of tiger claws
Sharp thorns the size of tiger claws...trimmed back from the sidewalk less than a month ago!

For $225, he’ll also remove the ferocious palo brea on the south side, which has become a dangerous menace—passersby risk facial scratches and eye-gouges if they have the temerity to use the sidewalk in front of my house. For about $40 apiece, he’ll trim up the two trees the palo brea is crushing to help them fill out properly. For a few dollars more, he’ll trim the olive inside the front courtyard, restoring it to its former graceful splendor. With the job in the front yard, he’ll clean up the desert willow and restore the passageway between it and the Texas ebony free of charge.

In the back yard, he proposed some judicious trimming of the exuberant emerald paloverde—not enough to infringe on its shade-giving properties but a little pruning to keep it off the roof and discourage crossed limbs. And though he disapproved of  Satan‘s westside weeping acacia (yes—he and Proserpine actually planted two devil-pod trees in back, one where it would drop plaster-staining junk into the pool and the other where its limbs could snap off and fall on the house—or on the neighbor’s house), he recommended against removing it and suggested simply cleaning up the lower limbs, which are dying off  because they’re not getting enough light.

So, instantly the guy drove away, Richard got a call canceling the job he had yet to do. I think he’d forgotten about it, to tell the truth. Thank goodness! It looks to me like I can get ALL the pruning and tree removal—take out the dead ash and the nuisance palo brea, prune the palo verde, the olive, the vitex, the desert willow, and one of the hideous willow acacias in back, plus build the mound and move the stones onto it—for not a helluva lot more than Richard proposed for the ash and the mound (all told, R. wanted $1,200 for those jobs).

Wow! I was braced for an $800 to $1,000 bid just to do the basic trimming, to say nothing of removing the palo brea. Can you imagine?

Asked him what his background is and how he came to start a business. He said he and his wife had moved back to the US from Germany, where they’d started their family (she’s German), because they wanted more space and Arizona was where they could afford it. He started working for a large landscaping firm that was doing all the maintenance for the huge new developments out on the west and east sides. There he learned how to climb and prune trees, ended up as a manager, and started studying landscaping seriously. He became a certified arborist, and then after the economic collapse he and a partner bought an existing landscaping company that had about 35 accounts. He said their plan is to target small to medium-sized developments that are too small for the huge landscape maintenance firms to bother with. So…it sounds like he knows what he’s doing and he has some experience. He’s very clean-cut, well-spoken, and even though he’s a gringo he doesn’t look like an escaped convict.

My yard is desperately overgrown. It not only needs to have a huge, mature (dead!) ash tree removed, it needs serious work that verges on relandscaping. Some of that work really should be done by an expert. Unless I miss my guess, this single call to just one other contractor is going to save about $1,000 on the total job.

Not all Costco gas is equal

The other day while I was at Costco topping off my gas tank with the last gasoline priced under $4 in the future history of humankind, SDXB happened to go into the Costco on his side of town for the same purpose.

He paid $3.86 a gallon.

Say what? I paid $3.93 a gallon: a seven-cent-a-gallon difference! Same day, same time of day, same retailer.

Only difference as far as we can tell is the demographics. My Costco is a ghetto store that serves a downscale clientele in a tough part of town. His Costco, located on the booming westside, caters to the upper middle class and a large, relatively affluent retirement community.

Why, one might ask, should low-income customers have to pay seven cents a gallon more than people who can afford an extra ding at the pump? Beats me. Only thing I can figure is Costco must figure us pore folks are too dumb to know better, too lazy to drive across town to get a better price, or too broke to run our cars far enough to get out of the ‘hood.

This has long been so of grocery store prices: they’re always higher in areas where many of the customers don’t own cars. A friend worked as the manager of a ghetto grocery store, and he reported that they jacked up prices across the board because they had a captive audience of people who either could not or would not drive further afield to buy food and household products. Maybe Costco does the same.

Message: If you live in a downscale area, consider driving to a more affluent district to seek better prices.

4 Comments left on iWeb site

BeThisWay

I noticed that same thing about grocery stores long ago.Touristy areas also always charge an arm and a leg, too.

It’s good to know, though, while planning your purchases. I often bring non-perishables on vacation just to avoid that type of gouging as much as possible.And if you need gas and are going to see SDXB or have to be in the other Costco area anyway, you can do your fill-ups there.

Tuesday, June 10, 200808:38 AM

Karen

A Costco representative came to my business awhile back to sell memberships, and she they do price the gas individually.Basically, people go out in the morning in the immediate area and compare the local prices so they can price just below all of them.
But as some areas are more expensive than others, two Costcos in my city that are 30 miles apart will definitely have different prices.
Needless to say, I go to the “ghetto” Costco when I need gas.:-)

Thursday, June 12, 200807:27 AM

Karen

P.S.I realize this is the opposite than what you experienced, but it may have also been timing.
I’ve gone to fill up twice in one day for our second car at Costco, and paid a different price!

Thursday, June 12, 200807:30 AM

vh

It’s true that in general gas prices are lower on the westside. That may account for the difference.

But we pay dues for the privilege of spending our money at Costco. That should buy us consistent and fair pricing across the board–not a gouge because we live in a downscale neighborhood a few miles away from a different neighborhood in the same city. That’s unfair and unreasonable.