When it comes to providing a great customer experience it is an accumulation of all of the interactions we have with an organisation. However, it can be a small jarring little moment that can undo all of the great work that has gone before and that is remembered and held onto, tainting future interactions.
It can be those moments that break the trust you have worked so hard to build over time.
How is your approach to pricing and invoicing
affecting your customer's experience?
McKinsey recently published an article ‘Electric Vehicle Buyers Demand New Experiences’. It is a great article looking at the changes taking place in the EV market. In it they survey buyers of new cars. Only 53% report being satisfied with their experience. What jumped out at me was the number one pain point regardless of location. Lack of transparent pricing.
I wonder if it is a factor particular to just EV’s. A recent trip to a car dealership started with me asking for a complete on road cost for the car my wife had just looked at. We got anchored to that number, had discussions and started to think it was something we could consider. Then came the conversation I should have anticipated. $750 for mats - really - the car does not come with mats? 'You would be crazy not to spend the $1,500 on the protective coating to stop paint chips.' Tow bar? Tinting? Extra key?
My trust eroded. Did they do anything deceptive? No. Could they have done things differently? Probably.
We walked out of that dealership and ended up making a purchase, but somewhere else
I had a similar experience with purchasing a couch a while back. I was anchored to the list price hanging off the arm of the couch. Then we started the conversation with the sales person. I needed fabric protection, to pay for delivery, to pay for the removal of the packaging from the couch and for them to assemble it for me (screw four feet onto the bottom).
We brought the couch. There were more furniture items I was contemplating from that store but the overall experience with the couch just left me feeling slightly taken advantage of. We did not go back.
The invoicing process is another interesting one.
I am sure your fine print indicates you can charge for certain ‘other’ items.
My kids are at schools where I am sent an invoice each quarter. They have had a great start to high school and are in environments where they are well looked after and nurtured. However, all those good vibes fade for me as I open the email with the quarterly invoice and see the added extras. $750 for camp. That is probably fair and was clearly called out. But it is the $4.50 for art, $35 for maths software, $35 for NAPLAN (compulsory government testing) etc etc that all add up to over $1,000 extra.
I am left reflecting on their definition of ‘tuition’ and wonder why their finance department did not see NAPLAN coming this year and why the maths software is not part of tuition and so on. I am not thinking about the great educational experience my kids have had, the friends they have made and the teacher who went above and beyond.
And so by the time I get to the ‘optional’ building fund donation of $250, I feel like I have already donated over $1,000 dollars of non optional items and so I skip it. Schools wonder why they are having more and more challenges with parents. I wonder if this approach to invoicing is one small contribution to parents' overall experience and sometimes broken trust in the school.
If you have read this far you have probably reached a few conclusions… firstly, I need to stop whining and secondly I should be incredibly thankful that I have money in the first place to spend. Both are fair comments.
Perhaps also as you have read you have reflected on your own experiences and recognised those times your own response to an organisation has been affected by a pricing or invoicing experience. Or maybe now you understand a little bit better why a customer may have behaved in a certain way.
There are no perfect answers to the issues above, but here are a few suggestions (which might not work for everyone).
Can you bundle everything up front? Include everything and allow people to reduce the price by removing items. It is often not the price itself that upsets people. It is that they were anchored to another lower number and you just increased it. If it does not make sense to buy the couch without having it delivered, quote a price that includes it and give them the option of reducing the price by picking it up themselves.
Avoid the fine print. Leaving things out that you plan to add back in might be a legitimate part of your contract but is it a great experience? To the extent that you can be clear on these amounts at the start, seek to include them or - be really clear they are not included and be specific (in big print).
Communicate, Communicate, Communicate. Your pricing might be time and materials, it might be cost plus, it may be volume based. These methods all make sense. What does not is the bill shock some people get when they have no idea how much you have been doing for them… even though they asked you to do it. Keep them in the loop as often as you possibly can.
Reflect and question. Are there any aspects of how you invoice and price that might be giving customers a negative experience? I met with a client's customer recently who indicated that how they were being charged was unhelpful - the client did not realise this. Ask the question.
Make sure how you price and invoice customers is not diminishing your customers experience, eroding trust and costing you repeat business.
Do you know where you are providing an awesome customer experience and where you need to improve? Engage us to help you better understand your customer's experience today.
