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One Bundle, One Price

Thank goodness, it’s almost summer vacation time. Perhaps you and your family are planning a trip to an all-inclusive beach resort or are taking the cruise of a lifetime. You determine that the quickest way to get to where you need to go is to fly there, so you score a sweet deal on the airfare and think that most of your vacation is pre-paid.

Certainly, you budgeted some for incidentals and excursions, but no sooner do you and your entourage arrive at the airport then you are bombarded with aggravating fees for every little thing: $20, $25 or as high as $75 per piece to check your bags on your flight; $3 to $7 for a snack or $4 to $10 for the ‘pleasure’ of feasting on airline food onboard; $6 to $25 for a little extra leg room in the exit row. What’s next? $2 per minute to use the undersized lavatory? $5 to stow a carry-on in the overhead? I’m afraid to ask what they would charge to use the seat belt or oxygen mask. (Don’t think for a minute that the airlines haven’t thought about charging for that stuff.)

You may be asking, “Where is this rant going, Vince?” What is your company’s policy or practice when it comes to itemizing your client invoices? Do you discuss and negotiate the per-unit price of the goods and services you provide and fail to mention the additional fees such as taxes, set-up charges, packaging, and freight—not to mention rush charges and special handling (insurance) fees? You know how you feel when, after you’ve given your commitment to doing business with a company, you are nickled and dimed on every little thing. Why do you even consider doing it to your customers?

Now, I can appreciate that some things—like set-up charges—may be billed separately in the event the exact same job is reordered and the need for the extra fee to be levied again is unnecessary. But how often does that happen? If you find that many of those extra services are part and parcel of nearly every order, just work them into your estimate or quote and tell the customer that everything is included. If the customer doesn’t need one of them or is tax-exempt, just take those items out of your calculations for the quote.

Getting back to the airline example, I chuckled when I read recently that the U.S. Government is pushing for airlines to refund or compensate passengers when, because they were charged separately, their luggage is lost or they arrive exceedingly late to their destination due to poor airline service. Ironically, if all those little charges were rolled up into one single airfare, the Government wouldn’t have any basis for determining how much a mistreated passenger should get back. In essence, by adding on all those annoying fees, the airlines have opened themselves up to being held accountable for actually making good on the services.

Rule of thumb when it comes to quoting prices: One bundle of goods and services, one price for that combination of quantity, quality, service and delivery. Simply state, “For what you are asking for, the price is…” If the customer wants to change anything in the proposal, then “For that combination, the price is…” You’ll find this technique will serve as your first line of defense against a customer trying to talk you down to a lower—less profitable—price. Good luck.