• Price… Have a Price Including Payment Terms Have That Make Sense

Or…

Did you price yourself out of the deal? 

Perhaps you offered a proposal in which it was too expensive to start so they didn’t even consider you. Maybe you are an HVAC company and you sent out a service technician on a 100-degree day to fix their AC unit before a graduation party they were having on a weekend. You did do them a service, they even paid you, but they realized later another company would’ve been less for the same call and now they won’t do any future business with you. The kicker is you won’t ever know. Just when it comes time to upgrade their unit or furnace, they won’t be calling you. 

With times being tighter financially for businesses and cash flow being more important nowadays, customer retention is critical. Not every business can afford to extend credit so the ones that do have an enhanced reputation. They come across financially secure and people like doing business with companies that are financially stable. Some businesses are tighter and denying credit or terms to their customers. This simple seemingly harmless act can actually have a big impact on your businesses bottom line.

When credit is denied, you run the risk of losing a customer. Maybe just for the short term or perhaps you run the risk of losing them long term… along with everyone else they tell to stay away from your business. Think about this…where do your customers go when you don’t or won’t extend credit or offer payment terms? I’ll give you an example from my own experience…

Our family dog got sick. We didn’t know why she was ill so clearly our next step was to take her to our family veterinarian. The problem was due to Covid, our vet office was temporarily closed so we sought out another facility. I took our pet to a 24-hour animal clinic, they diagnosed the problem, and my dog needed surgery. I appreciated the diagnosis, I appreciated the care they were giving the animal. What I didn’t appreciate was the proposed amount. They wanted $3400 to perform surgery and give fluids. They wanted half upfront and the rest in a day when I was to pick up my animal. That seemed to be excessive to me but I had no idea what a bowel obstruction operation would cost. Even though my dog was 13 years old, they assured me that my pet would be fine so I was willing to have them perform the procedure. The problem I had is I didn’t have $3400 readily available and so I asked how much do they need now and how can I pay the balance. They told me a deposit of half of what they expected the total cost would be which was around $3400 and the balance when I picked her up. I asked if they could break that up for me. I offered $500 a week until the balance was paid or to give me 3 weeks to pay in full. I told them they could automatically charge my card. I offered for my company to do work for them for free to cover the difference.  No extended payment options were acceptable to them. See, in my situation, I only needed a couple of weeks to where I got paid again and where I could pull money from investments but that wasn’t good enough for them. $3400 was a lot to me to come up with in two days to pay for something completely unexpected. I reluctantly told them since they couldn’t work with me on the payment terms then I unfortunately needed my dog back. They told me by giving the dog back to me that I was “killing her”. They then charged me just over $1200 for x-rays, an exam and fluids and gave me my beloved pet back. I immediately reached out to friends, family and with their help and the help of social media, I found a veterinarian who would perform the surgery. My price for this surgery was $600. That was all, just the $600 which included some aftercare. They even offered me payment terms. They asked if I needed 30 days to pay. I didn’t. I paid when I picked up my dog. But the fact that they were willing to let me pay overtime really went over well with me. Especially after being treated so poorly from the previous clinic as if I were a “deadbeat”, a criminal or and a loser who didn’t have money to pay for my dog. 

I am not the only one that has a story like this. The Veterinary Clinic that wouldn’t give me payment terms, lost me as a client. I won’t ever spend any money there. And you remember all the friends and family I reached out to for help in finding a vet, all those people won’t go to that clinic either. They didn’t just lose $3,400 from me…they lost thousands upon thousands of dollars overtime along with a bad word of mouth reputation. The other Veterinarian I did go to, I gave glowing reviews, and they earned my business for all of my animals and I recommend them to anyone that is in their area or willing to make the drive. 

By granting credit, you actually give yourself an edge against your competitors. So, whether you’re an HVAC company, plumbing / electrical contractor, funeral home, veterinarian, dentist, podiatrist or some other doctors office, where do your customers go when hospitality, service and payment terms aren’t met… I can tell you… they go to your competition.

• Great Quality / Service

Or

Poor Quality / Service

Quality of the product and or service should exceed price expectations. There must be value here. The price of the product or the price of the service must be in relationship to the quality. Don’t offer an “A” price with an “F” service. You’ve heard “you get what you pay for” …well, there wouldn’t be a saying if there wasn’t some truth to that. Bottom line is just don’t do shotty work. If you do, own up to it and fix it. A homeowner was telling me a story when he had some water damage, a Disaster Restoration company came out and painted the whole inside of his house. Most was covered by insurance and the homeowner paid extra for another room to be done. A month or so after they moved in, the paint didn’t stick and literally peeled and flaked off the walls. The disaster restoration company came back out and again, the same result shortly after the work had been completed. The disaster company didn’t want to come back out anymore and the homeowner refused to pay their deductible to the disaster company. Instead, he contracted with another painter and found out the quality of the paint used before was very low. This new painter felt so bad that he did the work for at a huge discount. The homeowner was so happy with the level of service and quality of work that he used his company to paint his other house and recommended this painter to his neighbor who got an addition done. When you offer a quality product/quality service for an appropriate price, you will get the business and keep it. People buy when value exceeds price…I’ll say it again. PEOPLE BUY WHEN VALUE EXCEEDS PRICE. So make sure your product and or service gives plenty of value for the price you offered.

• Communication or dare I say the lack there of…

Keeping up communication is amazingly important for many reasons. Here are just a couple below. Your customers bought something from you, they trusted you and you can easily lose that trust by not communicating with them. If the trust is gone, future business is at jeopardy. For an example, If you’re going to be late on a delivery or install due to manufacturing problems, then your customer should know that even if it’s out of your control. Here’s one I hear all the time… You as a business installed a door or did some sort of install. You as the business think the job is done. Your tech never told you otherwise, and you didn’t follow up with a simple phone call to see how things went and to make sure they were a happy customer. You just don’t receive payment… Time goes by and you as the business are upset due to lack of payment, you either finally call, get an attorney involved or a collection company and because the collection company used communication and reached out to the debtor, you realize that your tech didn’t actually finish the job the way they were supposed to. If you just reached out to your customer earlier, this situation would’ve been handled much earlier and more cost efficiently.