The Carrier Who Charged Half

Dear friend,

The riddle first, as the tradition demands. Back in the old town, down at the wharf end, where the carts queue in the wet.

Two carriers keep one river road,
Both charge a fair rate by the load.
A stranger comes with rates so light.
One follows down, one sits it tight.
By harvest, one of three is gone.
Who left the road? And who lived on?

Hold your answer. Story time.

The Story

Two carriers on the river road out of the town I've never named, and their carts, in the old chorus, were equally sound. Same rate by the load, settled between them years ago by nothing more than the cost of keeping a horse.

Then a stranger set up at the wharf and charged half.

The first carrier did what a frightened man does, which is the thing that feels like fighting. He cut his rate to match by the end of the week. And having halved his takings, he could not afford the wheelwright when the rim went, so he ran on it; could not afford the good tarpaulin, so the flour got damp; could not afford to turn down the awkward loads, so he was late for the reliable ones. His customers did not leave over the price. They left over damp flour, which is how it always goes.

And when the stranger vanished the following spring, as he was always going to, the first carrier could not climb back up. He had spent a year teaching the entire river road what his work was worth, and they had learned it thoroughly.

The second carrier did nothing for a fortnight except sit down and work out how the stranger could possibly do it, and there are only ever three answers. He has not counted his costs, having forgotten the horse's feed, the wheelwright, the wet days, and any wage at all for himself. He is buying the trade with money from somewhere else, and will stop when it runs out. Or he is leaving something out that the customer cannot see from the wharf.

It was the third, mostly, as it usually is: an open cart, no fixed hour, and nothing paid if a crate went in the river.

So the second carrier did three things and none of them was a discount.

He made the invisible visible. Where his rate had always just been a number, he now wrote three lines beside it: covered cart, named hour, breakages paid in full. All of which had been true for eleven years and none of which any customer had ever been told.

He spoke about the stranger plainly and without one word against the man, because bitterness at the wharf travels faster than any cart. All he said, when asked, was that the other rate was for an open cart and no fixed hour, and that if that suited, it was a fair price for what it was.

And he added a lower rung of his own, honestly labelled: an open-cart rate, half his usual, take your chances with the weather. Perhaps one customer in six took it. The rest, having now seen what they had been buying all along, cheerfully paid the full rate, and one or two remarked that they had never realised the cover was included.

He lost three customers to the stranger that year and let them go without a fuss, as the innkeeper would have. Two came back in the spring with a story about a wet load.

The Lesson, Since You've Earned It

You cannot be undercut on a thing the buyer cannot see. Which is the whole trouble, because most trades bury their real value in habit: the cover, the fixed hour, the making good, the fact that you answer the telephone, the twenty years of knowing which crates go on the bottom. All of it included, none of it stated, and therefore, to a customer holding two numbers, non-existent. The stranger did not undercut the second carrier's work. He undercut the part of it nobody had bothered to describe.

So the first move is never a discount, it is an inventory. Write down everything inside your price that the customer would only discover by its absence, and then put it where the price is, in plain words, before anybody is comparing. This is the clockmender's lesson pointed the other way: a price tells a story, and if you leave the story untold, a cheaper number will tell it for you.

The second move, and the harder one, is to refuse the match. The moment you meet a rival's price you have agreed with him in public that the only difference between you is money, and you will never afterwards win an argument you have already conceded. Worse, you cannot cut a rate quietly: you cut it for every customer you already have, including the loyal ones who were perfectly content, and you teach the lot of them a number they will not forget.

Do add the lower rung if you can build one honestly. Not you, cheaper, but a smaller thing at a smaller price with the difference stated: fewer visits, longer wait, they do the tidying. It gives the price-led customer somewhere to go that is not away, and, more usefully, it shows everyone else exactly what they are getting by paying more.

Three questions, and answer the first with a pen before you do anything else:

1. What is in your price that nobody sees? List every inclusion, guarantee, response time and standard you take for granted. Then put the list next to your number, on the quote, on the page, in the conversation. Most trades find nine or ten things they have been giving away invisibly for years.
2. What has your rival left out? Work it out properly rather than assuming he is mad. Then describe your own inclusions rather than his omissions, since naming what you provide persuades, and naming what he lacks only makes you sound worried.
3. What is your open-cart rate? Design the honest cheaper option: less of the thing, not a worse version of it, with the difference plainly stated. If you cannot build one, decide instead which customers you are content to lose, and let them go the moment they ask.

The Answer to the Riddle

Who left the road?

Both of them, in the end: the stranger in the spring, when the arithmetic caught him, and the first carrier a year later, having been beaten not by the low rate but by his own answer to it. The second carrier never fought the price war at all. He simply wrote down what had always been in his cart, which took an afternoon, and it turned out that half his rate had been invisible to his own customers for eleven years.

The verse:

The man who halves it hasn't found
A cheaper horse or better ground.
He's left a thing out, that is all.
Go name what's yours, and hold your wall.

Until next time. Go and write the list of what your price includes, and put it beside the number before Friday.

P.S. Should you ever be tempted to match a rate for a single important customer, do it as a smaller job rather than a smaller rate. The number in your book is the one thing in your business that every future customer will eventually hear about, and it has a longer memory than either of you.

Also in the archive: The Clockmender's Price, The Weaver's Four Sentences and The Doubled Rim.