John Ray: [00:00:00] Hello again. I’m John Ray on the Price and Value Journey.

John Ray: [00:00:04] My son is a Waffle House fan and he has been since he was old enough to know what was going on. Waffle House is a 24/7, mostly breakfast, quick-serve restaurant based in Atlanta and covers a lot of the Southeast. In fact, there are some exits in the Atlanta and Georgia area where there’s a Waffle House on both sides of a freeway exit.

John Ray: [00:00:30] When my son was in preschool, his standard order at Waffle House for a long time involved a waffle. Kids’ waffles at Waffle House when he was that age were a dollar. Today, kids’ waffles with bacon are now $4.25. So this long ago gone value was indeed quite a deal. Now, if you’ve been to Waffle House, you know that all the waffles come out of the same-sized griddle, which you can see. So, it’s no big secret. A kid’s waffle, therefore, was priced significantly below an adult waffle even though the product was the same. Same waffle mix, same size, same plate, $1. This was a great deal for that age and stage when as much of the waffle ended up on the table and floor is in your kid’s mouth.

John Ray: [00:01:25] At a certain point, though, things changed on our Waffle House trips. One day my son, who was about five or six years old, changed his order. On this trip, I ask him, “Do you want your waffle?” He said yes. So to the server, I said, “A kids’ waffle for him.” He said, “Dad, I want an adult waffle.” The server stood there, her pen poised over her order pad, wondering what Dad’s next move was going to be. “The kids’ waffle and the adult waffle are the same size,” I said. “But, Dad, I want the adult waffle.” “It’s the same waffle, John. It comes out of the same griddle my waffle does you see over there.” And I pointed to the waffle griddle, but he was having none of it. “Dad, I want an adult waffle.”

John Ray: [00:02:21] Our server stood there looking at me with this expression on her face, something like, “Okay, Dad, what now? Now that you’re reasoning with a five-year-old is a complete flop.” At this point in that uncomfortable moment, when my kid is about ready to cry and the server is waiting, my willingness to pay shifted dramatically. “Okay. Get him an adult waffle.” I was suddenly willing to pay an adult price for that same exact waffle. If my server had told me that adult waffle prices had suddenly doubled for cheapskate dads with crying kids, I would probably have been willing to pay that amount.

John Ray: [00:03:07] A client’s willingness to pay is subject to context as well as the geography they find themselves in. Customers expect to pay more for a soda at the ballpark, for example, or the movie theater, even though it’s the same exact cola they enjoy for a lot less at home. Now, it should work the same way in services too. But sometimes professional services providers missed the mark on this.

John Ray: [00:03:39] Here’s a great example, and I’ve seen this repeatedly for bookkeepers who might have a client that walks in the door with the proverbial box full of receipts and they need to get their books in order by a certain time. And that certain time, of course, is going to require heaven and earth to be moved to get that done. Yet what does that bookkeeper sometimes do? Charge them the same amount and it’s often an hourly rate. That’s a whole nother subject. The same amount that they would a regular client always on time getting that bookkeeper everything that they need to keep the books in order on a regular basis.

John Ray: [00:04:28] A rush to completion time for the same work should command a premium price for the added benefit of speed. But sometimes service providers, like bookkeepers, for example, often miss this opportunity to differentiate. And it’s really not fair, frankly, even if those clients don’t know that your regular clients are paying the same price as the clients who are a mess and want something done at the last minute. It’s just not fair.

John Ray: [00:05:01] So, how does context work for the clients in your business? If you’re not factoring in context for your customers, your price is undoubtedly wrong.

John Ray: [00:05:15] I’m John Ray on the Price and Value Journey. Past episodes of this series can be found at pricevaluejourney.com. Or if you’d like to connect with me directly, you can do so by sending me a note, john@johnray.co. Thank you for joining me.