The Power of Being Transparent With Your Costs and Product Functionalities
Some businesses try to hide costs and fees from clients when signing contracts. The belief is that customers will find it hard to get out of the contract even if the costs are a little more than what was disclosed initially. Unfortunately, once you do that, you will have betrayed the client’s goodwill. There are three reasons to disclose all costs and product functionalities.
- Inspire trust with your customers
A customer comes to you willing to do business with you if your product, service, terms and opportunity is right. If you want to do business with your client, you need to inspire trust in your costs and product functionality.
It is foolhardy to fail to disclose that your prices are not tax inclusive. It is also not fair to let a client engage your services if you plan to inflate your prices once the client signs. It is a common trend for service providers to lie that they are charging for full service only for them to leave out some services and charge them separately.
If you do that to a client, he will never use your services again. In fact, he will not only be tired with your business, he is likely to leave a negative feedback that may require years to overcome.
- To avoid legal processes
Canceling a contract can be a daunting task especially if the client, because of failure to honor agreements, initiates it. A customer can deem it necessary to start a legal process if you are adamant about a disclosure of cost or fees. In most contractual agreements, you ought to ensure that all parties know the full breath of the deliverables.
If, for example, you have stated that the warranty runs up to five years, the client will expect service within the period as long as it is within the stipulated contract. If you start charging extra fees before the warrant expires, the client will most likely institute legal proceedings.
You are likely to spend on legal processes unnecessarily. Legal processes always end up in the mainstream media and your overall image dents significantly. Sometimes it is an innocent mistake to leave out some details, but courts can be brutal. Some companies like Ask Bongo have to send confirmation messages to clients to make sure that they understand their charging system.
- Lost revenue and cancelled orders
It is heartbreaking when a customer cancels an order that you have already confirmed. According to Harvard Business School, order cancelation and review come mostly due to undisclosed charges and dishonest selling. Do not allow this to happen because it means you are losing significant revenues, time, and other resources.
When there is total disclosure, you may not get many customers, but those customers you get will go through the full selling cycle notably buying and referring other clients. If you don’t, you are likely to sell yes, but live with the consequences of a disgruntled client who you would wish canceled his or her order.
Conclusion
There may be a need to charge more money for a service or product. However, you should notify the client what it would cost him or her. If it costs her more money for a better service or product, the better it is. Customers tend to love trustworthy businesses.
One way to retain your low charges is to categorize your services. You can have standard and advanced levels of service. You must be clear that at standard level, the client will only expect certain services. Once you have communicated your charges, services and products effectively, the client will rate your work based on what he or she expects as a value of his or her money.