Kerubo is a massage therapist who worked in the spa section of a large Nairobi hotel. Following the COVID-19 outbreak in 2020, Kerubo’s income took a direct hit as hotels experienced a decline in guest numbers. Not one to sit at home twiddling her enterprising fingers, Kerubo bought a portable massage table and started providing treatments at home for her clients, a service that became very popular due to its convenience. However, since it was COVID-19 and she was desperate for bookings, she priced her hourly service at a 40% discount compared to what clients were paying at the hotel spa. Consequently, her home massage business took off. Since many of her clients were working from home, she could easily navigate the traffic-bewitched city to serve several clients a day.

Well, life has unfolded, and COVID-19 is now behind us. While Kerubo’s original hotel spa business has slowly recovered, her clients have become hooked on the convenience of personalized home massages. With people now returning to work in the office, her busiest hours are from late afternoon to evening, and her client count has dropped to about four a day, zipping across Nairobi’s leafy suburbs. The problem she now faces is that her clients are resistant to any attempts to increase her fee. Interestingly, a large number of them are European expatriates who would typically have to pay nearly six to eight times what Kerubo is charging for a home massage service. Yet, they have all rejected any attempts by Kerubo to increase her pricing, citing that they’re not in a good financial position.

On the other hand, Mariamu is a family counsellor who started her practice in 2016. She’s a tough-talking counsellor whose clients love her no-holds-barred approach to giving advice. She calls it as she sees it and doesn’t mince words when calling out people’s nonsensical excuses during therapy sessions. Before COVID-19, she charged KES 15,000 for an hour-long session. Since the pandemic, demand for her services has increased, and she is now charging KES 40,000 per session. Mariamu quickly calculated that her services were in such demand that she could focus on fewer clients and charge two and a half times as much.

These are two ladies providing personalized and highly valued services. Mariamu recognized her value and has set a higher-than-average market price for it, despite the fact that Nairobi has no shortage of family counsellors. She is running a high-value, low-volume business that allows her to dictate her terms to her clients. Many clients have fallen by the wayside, finding her hourly rate unaffordable, but Mariamu has never lost a moment’s sleep over this. In fact, she sleeps much better at night with a lower client load, enjoying the resultant free time.

Kerubo, on the other hand, is navigating a treacherous and parsimonious highway to hell. Due to her historically lower-than-market prices, her clients have refused to accept any increases that would ideally cover her costs of traversing the city, including the time spent during the dead hours sitting in traffic. Her weather-beaten car is in dire need of an upgrade, but she can’t afford it. She’s exhausted most of the time and struggles to say no to a client calling at 6 p.m. looking for her services, as she needs the money.

While chatting with Kerubo, I gave her the example of Mariamu, who had not only recognized her own value but had also seen it affirmed by a shrinking but quality client base that was ready to pay a premium for her services.

Kerubo’s reluctance stemmed from her unwillingness to accept that she has a quality service in high demand. For some reason, she could not wrap her mind around the fact that providing a service at someone’s house should be priced, at a bare minimum, equal to or higher than what the service costs at a spa, assuming she is using the same quality products. There’s a price to be paid for convenience; if the product prices at your neighborhood petrol station convenience store are anything to go by.

We concluded the discussion by encouraging her to raise the price of her service by at least 10-20% to account for the inflationary adjustments that life has brought. This would help her separate the stroppy customers generating white noise from those who would actually walk away from the good (and still thoroughly underpriced) deal they were already receiving. Will she bite the value bullet? We’ll check in on her in the next six months.

 

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The Nitpicker Podcast