How To Lose A Customer - Method #2

When you are in a service business, not every job goes as planned. That’s why, depending on the kind of work you do, you give your customers an “estimate” instead of a firm price before you begin. If you’re smart, that estimate is in writing, and if you’re even smarter, you ask the customer to sign it before you touch their job. Even then, though, misunderstandings occur and customer relationships can become strained. No one likes to get a bill for more than he expected.

It happens all the time: a manufacturer raises the price of a key component after you’ve figured the old price into the job; you remove a panel only to discover a crack in the supports underneath, one thing leads to another and before the job is done the man-hours you originally estimated turn into man-years. You can’t just absorb these unexpected costs, nor should you. But you can’t just pass them on to the customer either, at least not without his prior approval.

Your future relationship with your customer depends in part on the way you tell him his bill is going to be higher than he thought. Your goal should be to convince the customer that you’re not trying to pull a fast one. Express regret that you have to deliver some bad news, then give them the details—and the more details you include in your explanation, the higher your credibility will be. You don’t have to be defensive or apologetic, but let him know you share his pain. If you’re open, honest, and above all timely, you’ll keep that customer.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for business owners and managers in the Dynamic Manager's Guides and Handbooks, a series of how-to books about marketing and advertising, sales techniques, and management strategy.