How estimates influence customer expectations

26May10

Without getting into any specifics, I was involved in a scenario recently where a service provider gave me an estimate before performing a fairly common service. On the written estimate, they wrote the word “guesstimate”, though we both agreed that the final cost should be fairly close to it. But when the actual bill came, it was more than 50% higher.

When I complained about the huge disparity, the service provider acted like I was the one who screwed up. After all, they insisted, the original quote was “only a guesstimate”. In their view, it was my fault for relying on their calculations in the first place. We finally settled on a price somewhere in between the two numbers, but it’s safe to say that neither of us was happy with the outcome.

What’s the moral of this story? No matter what you call an estimate, customers are going to use that as a mental anchor for everything that comes afterwards. If the actual cost is lower, they’ll be happy. But if it’s higher, they’ll be pissed off. So when in doubt, it pays to make your estimates as generous as possible. Err on the high side, and then add another 10-15% for good measure. That way, customers will always be pleasantly surprised at the final bill, and you’ll have a much easier time getting paid.



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