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The $10,000 Light Switch

Mark Kawabe - Friday, January 24, 2014

I had a chat with an electrician friend of mine who was guiding an apprentice through the process of figuring out how much it would cost to change a light switch. It was interesting, because in my opinion, it was no ordinary light switch they were dealing with. More on that later.

Light SwitchThe electrician and his apprentice talked about how to estimate the cost by understanding the extent of the job. This light switch was in an ensuite bathroom and controlled three fixtures: vanity light, shower light and bathroom fan. The customer wanted to replace the single switch with a three-switch box so each of the individual fixtures could be turned on and off independently. The job required rewiring two of the three fixtures which meant crawling into the attic and doing the work from above. In addition, the box that held the switch was too small to accommodate the additional wiring required, so a deeper box needed to be installed.

The job was going to take 3 hours for the two of them, so in total, 6 man-hours. Labour plus materials was calculated to cost $310 plus taxes, for a total of around $350. The two of them agreed that while that is what the job would cost, it would be difficult for the homeowner to accept that replacing a light switch would cost that much.

After that discussion, I chimed in with my perspective. I asked the apprentice and the electrician if they knew WHY the customer wanted the light switch changed. Neither of them knew why. If they had known, they could have charged much more - and it still would have been worth it! Here's the story:

The customer who called was a fellow who had tried to unsuccessfully replace the light switch himself. His wife had disliked the switch for over a decade as when her husband got up in the night to use the bathroom, the noise from the fan would wake her up. This would happen several times a week. It was a constant source of irritation as her sleep would be disrupted and she would be annoyed at her husband for waking her up, and for not solving the problem.

There's a saying that "Love is Grand, but Divorce is 100 Grand". This fellow's wife had put up with poor sleep and been irritated with her husband for over a decade from this one problem. There were other issues that were causing problems in their relationship and this constant source of annoyance and resentment could have been the issue that helped her make up her mind to get a divorce.

I once heard that the McKinsey consulting company set their rate by determining what the cost of a problem was for a company and then charging 10% of that cost to provide a solution. If the cost of a divorce is $100,000 for a divorce and that fixing the light switch could be the thing that makes the difference, that light switch could be worth $10,000. When viewed from that perspective, $350 to replace the light switch and thereby remove a significant source of irritation to his wife was a bargain!

You don't really know the value of solving a customer's problem until you've taken the time to fully understand why they've called you. When you know the reasons your customer wants a problem solved, you can better appreciate the value of the project to them. Put the problem in its full context and you'll have a much better perspective on how you can help.