Do you know how to explain service charges to your customers?
In some situations, there is a cost associated with providing quality service. That’s why it’s important to communicate the fees associated with your services in a way that your customers will understand.
By explaining service charges, you are fulfilling an obligation as a business and ensuring that your customers have all of the information they need to make an informed decision. It’s important to be transparent and honest with your customers, and this guide will help you do just that.
What is a service charge?
It’s a fee that a business charges in addition to the basic cost of products or services. Service charges can be seen as recovering the extra costs of providing good customer service and quality products.
The laws surrounding how businesses can charge fees vary across different states and countries. However, there are some general rules of how to explain service charges you should keep in mind if you choose to institute this practice.
Just like any other business decision, there are both pros and cons to adding surcharges to your sales. Before you decide whether or how much of a service charge you want to put on your products, consider how it will impact your business.
Advantages of including service charges
- Service charges allow businesses to continue providing excellent customer support and products without having to raise prices.
- If service charges are used to improve the quality of products or services, customers will be more likely to return.
- Customers will not have to pay hidden costs associated with excellent service.
Disadvantages of including service charges
- Including a service charge reduces how much customers are willing to spend.
- Customers might feel that they are being penalized for receiving good customer support.
- Customers may choose to go elsewhere if they feel the fees are too high or unreasonable.
Tips for explaining service charges to your customers
When you need to explain service charges, you must consider how your customers will react. Remember to put yourself in your customer’s shoes and think about how you would want to be treated.
The following tips will help prepare you for how to explain service charges in different situations.
Be honest and upfront
Many customers want to know how their money is being spent. If your business needs to charge a fee because of increased costs, you need to ensure that your customers know how you are using the extra revenue from service charges. Most people would prefer that this surcharge be used for improving customer support and products rather than going directly into the pocket of the business owner.
Empower your customers to make informed decisions
If your business needs to charge a fee because of increased costs, let your customers know how these extra costs affect their bottom line. Customers can’t make informed decisions without all the relevant information available. Don’t mislead customers into thinking that your products are more expensive than they actually are.
Be considerate when choosing how much to charge
Customers don’t want to be penalized for receiving good service, and they don’t like it if products are overpriced. Don’t add too high a surcharge or customers will think something is wrong with your products. The right amount will depend upon how much your business needs to charge, how your customers react, and how high the demand is.
What to say to explain service charge to customers
Having a difficult time explaining how service charges work? Here are some phrases that can help you get your point across:
Example 1:
“Our costs have increased, but we want to continue providing great service. To help offset these costs, the items you purchase come with a small service fee.”
Example 2:
“Because we value your business, we add a small service fee onto our prices so we can continue providing you with excellent customer support!”
Example 3:
“To continue providing you with top-of-the-line products, we’ve added a small fee to each product.”
Example 4:
“Because our customers are important to us, we want to make sure they receive the best quality products. To do that, we need to charge this surcharge on top of our regular prices to cover the cost of improving our products.”
Example 5:
“Our costs have increased since the last time we did business together. The items that are listed come with a small service fee, which helps us continue providing top-quality customer support.”
Explaining service charges to your customers
These phrases take away any notion that the customer has been penalized for getting good customer service. Instead, they demonstrate how much respect your company has for its customers by being upfront about how fees work!
Using one of these phrases, you will let potential customers know how much of a surcharge you’re putting on their transactions and the fees are being used to improve customer support and products.
Conclusion
Service charges can be a great way to recover the costs of providing excellent customer service and quality products. However, how you choose to explain service charges can have an impact on how your customers see your business as honest and fair.
Before explaining how service charges work, consider how they will affect your business. Do you want to include the surcharge in your prices or not? Make sure that you have a good explanation ready in case a customer asks how service charges work.
