Pricing Mistakes and How to Avoid Them

Make Sure Complete Service is Part of Your Original Price

Las Vegas used to be the capital of great deals on food and entertainment. But gone are the days of casinos and restaurants providing affordable meals and services just to make sure you had plenty of money in your pocket to lose at the gambling tables. Today, most businesses in Las Vegas try to find a way to drain all your money as quickly as possible, regardless if you gamble or not. I certainly understand the need to maximize profits, however I witnessed some attempts to “gouge” my wallet that seriously affected my attitude towards some of the establishments I visited.

For example, at one well known restaurant, my wife was asked what type of sauce she preferred on her burrito. When she responded with her choice, she was told that all sauces were an extra three dollars. At first, we thought the waitress was kidding, but sadly, she was not. My wife ate the burrito without sauce.

The same establishment brought me only three very small sized flour tortillas (about the size of the palm of my hand) for my $25 plate of fajitas. I asked the waitress if she could bring some more so that I could have enough to eat my meal and she told me it would cost another two dollars for them.

We left with a very negative impression of this restaurant. We felt as though they were trying to take advantage of us by charging more for small “extras”. We would not have had these feelings if the meals had slightly higher prices and we had been able to receive those small extras without the “extortion” tactics they tried to use.

My message here is that your pricing should be set properly to include everything necessary for serving your customers correctly. In our industry, that might mean including a delivery and installation charge automatically when you create a large, heavy mirror for your client. No one wants to jam a huge item into their car, drive it home, struggle to get it into the house, and then hang it properly. So if you add those charges in after the sale, it can alter your customer’s experience because they might view it as additional charges for something that was necessary to an enjoyable experience. If the cost of delivery and installation were included in the original price, it would be a better experience for your customer.

When the cost of small extras are included in the original price, it’s a better service experience for your customer.

Most customers are willing to pay a fair price for products and services. Businesses that plan ahead to be sure the complete service is part of the original price, provide a more positive customer experience.

Categories: Improving Profits and Management.

Comments

  1. Joe Ferrante

    What great observation/thought. I just finished a large framed mirror for a customer was asked if I could deliver & hang it. Of course I did. But your article made me realize that I should have offered to deliver & hang it without being asked if I would. Not to mention including the extra costs in the original pricing.

    Alsways enjoy reading you articles.

  2. The same can be done with gift wrapping – we always add it when we know its a gift.

    The only risk with the hanging-charge-included idea is when they live 10 miles down a gravel road and the frame needs to be hung up on a curved brick wall around a spiral staircase…etc. its difficult to renogotiate. This has happened to me once and I had to absorb all the extra time & bits needed to drill through a ceramic wall!!

  3. I know how you feel! I sometimes use an imaging company to scan or photograph things I cannot. The price is resonable, but then they charge for putting in onto a thumb drive or cd, even if you provide one! Or even to email it to you! Really, really annoys me–just put it into the price of the scan and avoid my bad vibes!
    Patricia

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