"I was going to hire a company today to do something fairly simple that would have cost [an advertised] $45," begins a post at the Service Untitled blog. But there was a catch. "I called them to schedule an appointment and was told there was [an] $85 minimum service charge. The fact that I was a first time customer didn't matter. Essentially, I would have to pay $85 for a $45 service."
Here are some things to consider before you implement minimum service charges:
- They have the potential to scare off customers, in no small part because they blatantly favor the interests of a vendor. "For the company," says the blog, "it's upselling disguised as a policy."
- No one who plans to take action appreciates learning that information contained in the fine print nearly doubles an advertised price. "If you're going to have a minimum service fee," says Service Untitled, "at least be forthcoming about it and tell your customers exactly how much it is and what they can get for that amount in the very beginning."
The Po!nt: Over the relatively paltry sum of $40, this company lost twice: It sent a potential customer running and earned negative word-of-mouth in the process. "The most important thing to do," says Service Untitled, "is to think of the long-term value of your average customer."
Source: Service Untitled. Click here for the full post.
by Christina "CK" Kerley
Comments
by Tim Thu Jun 11, 2009
While this example does seem mismatched -- $85 to get a $45 service -- there are indeed valid uses for intake or on-boarding fees. If these fees are raised intentionally to create entry barriers for undesirable customer segments, then it is a valid strategy. Angie's List is a good example. I'm sure that adopting a pay-to-play model helps cut down the reviews from people who just have a personal gripe or are professional flamers.