Editor’s blog: The price isn’t right

Two distress purchases made within the last 18 hours have left me a) wondering about the fascinating subject of pricing and b) a couple of hundred quid poorer.

Yesterday morning, after the customary English summer torrential downpour, there was water coming up through the shower waste plug-hole. An evil smell was wafting around the kitchen. After some argy-bargy with our builders – who love us so much they are still working on the downstairs extension nearly eight months after they arrived – I called in a specialist. (Builders may be able to chuck bits of rubble down drains, but they can’t clear them – although there’s a certain amount of cheap entertainment to be had watching them try.)

Dyno-Rod got the call. The bill – which they are very careful to make you fully aware of before they turn up – would be 93.57 plus ‘the VAT’. Their man came along and with a combination of his long glove and a water blaster sorted us out within half an hour. It was with great relief I watched the fluid level inside the man hole (complete with bobbing indescribables) recede like the tide going out.

I was reminded of a 100,000-a-year plumber MT once interviewed – in a ‘Most Overpaid Jobs’ feature – who said to us: ‘Mate, I charge whatever I reckon people will pay. And if you’ve got a burst pipe at midnight, you’ll pay anything’. Except that I didn’t begrudge the Dyno-Rod man a cent – he earned his dosh. 93.57 plus the VAT felt more than reasonable.

This morning, however, I made use of a spare ten minutes to pop down to the tyre shop to get the rubber on my ageing Saab looked at. After the customary sucking of air through teeth, the front left was condemned and the bloke went inside to check the price of a replacement Michelin: ‘ninety five plus the VAT’. This is one of those moments, like the annual service, when you bitterly regret giving up your company car. The Dyno-Rod/Michelin tyre price similarity struck me immediately.

Now I know an awful lot of R&D goes into tyres – just look at the fetishistic fuss they make over them in Formula One – but 115 for a bit of shaped rubber? I could, of course, have had a cheaper one – but then they wouldn’t have matched. Two different brands on the same axle? I’d be letting the family down if it made the vehicle less safe etc etc…

I have no idea what it costs Michelin to make one of their tyres. But I do know that these days you can no longer assume that the price charged for something bears any resemblance to the costs of producing it. Smart companies concentrate on the value they offer to customers. They also know that coming in under the price point of a hundred pounds – albeit without the VAT – eases the psychological pain. I’m still trying to work out why the one purchase irks me but the other doesn’t.

But the purchase which irked me most of all recently was the cost of a recent visit to Specsavers: before my very eyes a pair of glasses which were supposed to cost 120 went up to 225 as I was blinded by the science of variofocals. That experience left me feeling that Ryanair were a bunch of pussycats by comparison…

PS. MT ran a great feature on pricing recently which you can read here.

In today’s bulletin:
Bank fails to douse recession fears
Move the Scousers on, says Tory think tank
Editor’s blog: The price isn’t right
A question of convenience for London’s businesses
A new recipe for team-building success?

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    Biggest con of our age is companies like Specsavers, specticle frames are definately overcharged (look at the frames on average singlasses the unbranded types sold in M&S similar quality but far cheaper) The coatings are over charged, the varifocals etc so its no wonder £120 jumps to £ 225.