Dec 11

Assigning value to a service

There are two bus routes I can take from my house. One is a short, direct trip. The other drives around half of Dublin before getting to the city centre. The ticket for the long route is significantly more expensive than that for the shorter route. Why? Well the bus covers more distance, uses more petrol and takes up more of a driver’s time, I guess.

And yet this is an ass-backwards way to charge for a service.

This is like charging more for a package to reach its destination in six weeks than you charge for it to get there tomorrow. The shorter bus route provides a more efficient service. As a commuter, this is much more desirable and worth paying a premium for. If Dublin Bus actually put some thought into what they do as a service provider rather than people just carrying out an unwanted chore day after day, the long route would be cheaper than the short route.

Provide a service with more value attached, you can charge more for that service.

This is always worth keeping in mind when you are providing a service yourself or indeed hiring someone who is offering a service to you. Consider these questions – How will this service benefit the end product? Will it make creation/production easier? Quicker? Better? Is there relevant, applicable know-how here that few others can bring? Are valuable strengths being applied in the right areas? Is there trust here that carries value in itself? Where can real value be added? And how much is that worth?

It is not just about charging or paying for time. It is what that time brings to any project that counts.

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