People ask if delivering great client service is expensive, and the answer is usually, no. Unless you start using more sophisticated CRM (customer relationship management) software and treating your clients and prospects to expensive dinners out, it doesn’t really cost you much. Time, yes. Effort, yes. But money? Not really. Until, you have a choice to make.
Charge Enough Now So You Can Provide Later
The other day I was listening to Business of Design’s podcast # 62, with LuAnn Nigara as the guest. Kimberley and LuAnn were discussing a story where LuAnn had accidentally measured windows wrong for some shutters. The mistake wasn’t realized until they were about to be installed. And once her installer noticed, he immediately let the client know. He shared what had happened (it was an older window with a tilt that LuAnn didn’t account for), what they were going to do about it, and how much it would cost the client (nothing). He could have kept it to himself, and just gone ahead with the installation. The client wouldn’t have noticed the mistake until she cleaned her windows. And who knows how long that could be. But that’s not how LuAnn runs her business. Without a second thought, they told the client the mistake, and ate the cost for the replacements.
But, as LuAnn and Kimberly discussed, in order for LuAnn to be able to cover the cost of those shutters without it taking a huge chunk out of her business, she had to charge the right amount first. She had to bake integrity into the price. As insurance. In case anything should go wrong, and she knew at some point it would, she had to charge the right fees from the beginning.
Financially Plan for Disasters & Surprises
So as you’re considering if you should raise your fees with the new year, consider if your current fees leave you with enough leftover to be able to run your business with integrity, and treat your clients, and staff, the way you’d love to treat them. Are they high enough and profitable enough, that you could pay for a $5,000 sofa that you submitted the wrong measurements for? Are they profitable enough that you could cover the cost of a fully paid $3,000 coffee table that was made by a company that went out of business and you can no longer get a hold of? Are they profitable enough to be able to give meaningful and personalized gifts to your clients?
Because you don’t want to be in the reverse situation. Where covering mistakes and surprising clients and staff are taken care of with your “leftovers.” You don’t want to be forced to choose between letting your assistant go and covering the cost of a disaster. And you don’t want to end the year without showing your appreciation for all those involved with your business, both clients and staff.
Instead, set your fees where you can put a small amount of money aside with every project. So you can save for the emergencies, and the surprises. Charge enough upfront, set a small amount aside for both purposes, and you’ll quickly start to realize how much you actually have to cover surprising your clients with a night out at the museum. Or with covering the cost of your mistake. It doesn’t have to be much. Just start with 1% of each project’s cost and then go up from there.
Make Your Decisions Before You’re Forced to Make One
So plan out how your business will handle those surprises, both good and bad, before they happen. Remember all those elementary school assemblies with firemen training you to stop, drop, and roll in case of a fire? You were creating a plan for how to handle disaster. It may not happen. You hope it doesn’t happen. It probably won’t happen. But, in case it does happen, you’re prepared. The same goes with planning your fees. Charge enough upfront, so that if disaster does strike, you don’t have to choose between running your business with honesty and integrity, giving your assistant her bonus during the holiday, or being able to pay your own salary. Plan for that from the beginning.
And what happened with LuAnn’s client once she realized that the mistake was being handled with honesty, integrity, and full ownership? She ordered three more rooms full.
If you’d like even more ideas on how to provide the kind of client service that gets you higher fees and profits, visit the Services page to find out more!