What your customer isn’t telling you: how much

Would you buy insurance if the insurance company charged you the premium after a disaster strikes? And the best they could do for you is to estimate what that premium might end up costing?

Would you buy a car before the engineers designed it? With the commitment to pay whatever it costs when the car rolls off the assembly line and the car manufacturer tallies up the cost?

Would you buy groceries from a store, and be willing to pay whatever price allows the store owner to cover his/her costs at the end of the month?

In the consumer market, we know the price upfront. We can make a decision based on the price. In some cases people tend to focus too much on the price, but at least everyone has the luxury of knowing the price upfront. Yet in business this is often not the case. Estimates and overrun are the norm. Final prices are only known after the fact, when it’s no longer possible to say no, that’s too much.

Are you putting your customers in this position? Do they know what your involvement will cost before you begin? Or do they have to wait until after you’re done? How do you think you would feel if you were in their shoes?

Customers want to know what things cost up front. If the cost will be variable they at least want a cap. And they’re often willing to pay a premium to have a reasonable cap.