About a decade ago, at the height of the dot-com boom, I was doing some work for a tech industry heavyweight that sold some of the most sophisticated technology on the planet. Unfortunately, despite their technological prowess, they had trouble figuring out how to calculate prices for their customers, and how to bill customers appropriately. Nevermind whether the prices were optimal.

Fast forward to today. We recently used an online service to help us complete a project for a client. The vendor was very web-savvy, with a solid website, online contracts, and glossy brochures. We asked for some work, they gave us a quote, did the work, and sent us a bill. Then, we did what every vendor hopes their clients do. We asked them to do more work. We asked them to resend the updated bill, because we couldn’t seem to find it. We got an apologetic note saying they were having trouble generating the new bill, but that someone in finance was working on it. A couple days later, another apologetic note, just asking us to pay the initial bill. (In fact, the work they had done to attempt to redo the bill probably wiped out the profit they would have earned even if they had sent us an updated bill.)

At the end of the day, pricing is not just about what marketing thinks is the optimal price, or even what the sales team negotiates. It’s about what you actually get from your customers. And with the credit crunch, when you get it will be more important than ever.

2 Comments

  1. Michael Henry

    Getting paid from the customer is magic. I consider pricing akin to vapor, so there and so not there. You are right, their profit started draining the second the first note apologizing arrived.

    Quick Survey – Did that isolated interaction effect the impression of the overall brand? I preach all the time that the front of house and back of house, equally share the responsibility to protect price premium.

  2. Reuben Swartz

    Invoicing mistakes definitely leave some impression, but mistakes in the buyer’s favor tend to be more easily forgiven. 😉

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