A few weeks back, my employee’s and I were discussing how we should handle a particular situation that had arisen with one of our clients. We work with a lot of non-profits, which means we are often able to procure software for them at no cost or a reduced rate. With this client, we had assumed that the software they needed would be donated (as it had been in the past), but because of pricing changes the vendor was no longer able to donate their software. This meant additional costs that neither we nor the client had budgeted for. Thus the topic of conversation, should we pass the costs along to the client, or eat the loss?
One of my employees in particular balked at the notion of absorbing this expense for our client. “No other company out there would do that.”
As part of our business model, we offer flat rate pricing as a way to allow our clients to budget for their IT support costs. This is beneficial to them because they know what to expect and can budget for it rather than being hit with $1,000 this month and $4,000 next month. This fixed cost factors in a lot of things, including some of the software that we use for our clients. In our contract with this client, we factored in a donation from a software vendor to cover the costs of a piece of software that we would have otherwise purchased. Since this assumption had been spelled out in the contract, we could legally pass the cost on to the client. The client would most likely understand the situation, since donations come and go and they have to work with what they have. But, this would be an unexpected IT expense that they had not planned on.
After much internal and external debate, I opted to eat the cost.
The reason behind this decision is simple. This was a sudden cost that was not budgeted for by the client. Rather than forcing my client to dish out money they had not expected and risk breaking my commitment to my client (to keep costs level and expected), I’d rather be the one to take a slight hit.
So maybe my employee was right, maybe there is no other business that would do this for their client and most likely the client would understand the situation. But because I feel that trust is one of the key traits to a great client relationship, I decided to keep that trust intact. There are several traits to a great client-vendor relationship that factor into customer service, and I plan to write more about these in the future.
To sum this up, I believe it’s important to the client-vendor relationship to not break the trust of the client. That is, go above and beyond to keep to your word to the client, even if it’s not in the contract. The more the client trusts you, the longer the relationship will last.