EVEN THOUGH COMPLETE strangers swap stories about how much their investments yield, when it comes to business, we have a long way to go to get over our phobia of money talk. This became obvious to me recently on two separate occasions.
The first had to do with a supplier. I had hired a video company to shoot a corporate event for $6,500. The video came out beautifully, but the client wanted another approach. He needed the video to be re-edited fast.
I told my contact at the video firm that I'd take care of the expense of re-editing, but for some reason, I didn't ask how much it would be. I figured it might be about $1,000.
That was my first mistake. The bill for re-editing came to another $6,500. I had also said, "Just get it done, whatever it takes." That was my second mistake. "Whatever it takes" can mean one thing to one person and something very different to another.
When I got the bill, I was angry. I thought the video artist should have alerted me to how much more it would be. If he had, I could have made a more informed decision. The supplier was firm and justified in his price, yet told me he'd try to help out. What did I think was fair to pay? I told him I'd get back to him.
During this time, a similar situation arose. Only this time, I had the responsibility of telling a client that a job would cost double what I quoted.
The job was to take place in a beautiful mansion, but four days before the event, the venue was changed to an empty warehouse. To complete the order as proposed to the client, we had to spend a lot of extra money in shipping, labor and decor elements. My client told me, "Do whatever it takes."
But when she got the bill, she freaked. The room had the same look, she said; why was the bill so much more? I explained the reasons and she paid the bill, but she wasn't happy. My mistake was not telling the client how much more the change in venue would actually wind up costing. I was guilty of the same thing I was accusing the video company of-not talking about money.
It raised many questions for me. Who was wrong-if anyone? Was it the supplier for not telling the client the cost, or the client for not asking? Either way, there was enough ill will created that I contemplated not using the video company again. As soon as that thought crossed my mind, it struck me-doesn't that mean my client is contemplating not using me?
I immediately put this lesson to use. After relating the story to my client, I asked her if she was thinking of using someone else on her upcoming events because the job had doubled in price. She told me that the thought had crossed her mind, simply because the situation had made her look bad to her client. However, she was happy with my work and was willing to give me another chance to work with her.
I know that by addressing this issue head on, I avoided losing a client. And I paid the video company in full, but made it very clear that in the future, we must discuss and get approval for every additional cost.
Telling a client that something will cost more than was initially proposed is a hard thing to do. Sometimes because of time constraints, it's nearly impossible. But certainly, a good educated guess should be given with the explanation that it is only an estimate. Failure to do so can cost you and your business so much more than just money. It can also cause someone to question your integrity.