3 Ways Inconsistent Pricing Can Cost You Customers – How To Fix It Using Web Based CRM

There is not a lot of information around on what inconsistent pricing can do to your customer relationships, which is unusual. It makes you look bad, can cost you sales and cripple staff productivity. However there is good news. Recently a small selection of web based CRM providers have introduced software that can make even the most complicated pricing models simple and accessible to sales teams of any size.

Firstly let’s deal with the negative impact of inconsistent pricing. When you start business, pricing is pretty straight forward. Generally you have a single price list covering all your products and services. But what happens when you raise prices on some products? What happens if you open a new office that charges different rates? Or you open an office in a new location with a different pricing scale for that community? What about wholesalers or special clients, do they get different rates? You might even run a time sensitive special discount, how do you manage that?

This is when your pricing gets messy and begin to affect your staff and customers. There are 3 chief problems caused by inconsistent pricing:

1. Time Squandered

Most companies manage their pricing by publishing PDF documents or excel spreadsheets for personnel to refer to. When you have a wide range of products staff may find it difficult to find the price applicable to the customer they are talking to. Or they may not even be able to locate the most up to date pricing document.

This wastes time and staff efficiency. They should be interacting with customers not searching for prices. It can also make your sales team look ignorant and amateur, clients expect them to know the correct prices– it is their job.

2. Overcharging

Assuming that your team don’t have or can’t find the most up to date pricing information they might quote the client a price that is incorrect.

If the customer is given a price that is too high they may decide to go with your competition instead. Costing you a sale. The customer may also engage in ‘salesman shopping’ where they call your company multiple times asking for the price until they find a sales person who will give them a reduced rate. This is simply unprofessional and it makes your organization look sloppy. No-one wants to rely upon a company that can’t even get their own pricing right.

3. Misquoting– Price Too Low

So what happens when your sales team quotes a price that is too low? If you decide to honor the price quoted you could end up running that particular deal at a loss. If you tell the customer that the price you provided was incorrect and provide the correct price then you run the risk of losing the sale. It’s a no win situation.

To avoid these pitfalls it is important to have consistent pricing information that is easily handy to all staff. The easiest way to achieve this is through Web Based CRM software.

Web Based CRM (customer relationship management) systems are hosted by your CRM provider online, meaning your staff can log in anytime, from anywhere all they need is an internet connection.

A few of the newer web based CRM providers have even created software modules designed to streamline complicated pricing models. For example these systems allow you to program different prices based on quantity breaks (if you buy 1 bowl it is $ 7.50 each but if you buy 10 + bowls they are $ 6.00 each). You can also flag customers who get special prices, your staff only need to look up the customers name in the database and they will see the prices that specific customer has been approved to receive. And if you have a time sensitive special price, no worries. You can schedule the start date and end date using your Web based CRM, meaning your staff will only see that price while it is still applicable.

However the biggest benefit is simply having your up to date pricing information all in the same place. So staff can quickly confidently provide quotes to potential customers.

Markup – Pricing Your Services When Customers Want to Pay Less Than You Do!

After 35 years of running a marketing business, one thing still bothers me. Markup! It seems and has always seemed to be a concept of deceit: camouflaging the true price of your service in order to make a profit at the expense of your customer. And customers don’t like it one bit!

One need only glance at the daily headlines. “Obscene profits on Wall Street continue to miff the public.” “Oil company profits at record highs while the consumer is suffering at the pump.” “Big business profits outrageous during the never-ending recession.” The average person does not condone big profits in business when they are struggling to put food on the table, not to mention losing their homes to foreclosure.

So how do these businesses make such enormous profits? Price markup is one way. Charging customers more than they paid for what they are selling. Is that fair? As an accepted practice in business, it apparently is.

But in my experience with primarily small business owners, markup is a dirty word. My clients demand to know what I am paying for services I offer them. They don’t seem to mind paying me a fair rate (translation: a very low price) for services I provide from my own resources. This includes creative services like design, writing, composition, etc. of ads, websites, brochures, etc. However, if I am providing a service that involves an outside vendor for which I am being charged a price, my customers want to know what that price is and not pay a penny more for it than I do. Hence, no markup allowed!

That doesn’t give me much room to make a profit since the paltry charges for my creative services can hardly cover my overhead in this economy. But the ironic part of this is that the outside services I provide to my clients have also all been hit hard by current economic conditions, not to mention stiff competition, the changing business landscape and general hard times, forcing them to cut prices to the bone, making it virtually impossible for me to mark them up.

If I am buying printing for a customer’s brochures, my customer can get on the Internet and glance at the average prices being charged by hundreds of national printers, all of whom are bidding against each other for the limited printing business which still exists in this Internet age. So when my customer learns what price I propose to charge for his job, he can assess whether I have tried to pull the wool over his eyes and charge him some marked-up amount to make a profit on him.

Maybe he’ll let a small markup slide, but I feel like I’ve committed a crime against humanity, and suffer enormous guilt for doing so. How dare I deceive him into paying some minuscule markup just to pad my pocketbook?!! Where is the justification in that, he probably wonders, losing respect for me in the process.

Well, I can defend why we have markup. For one thing, it has taken me arduous research to find the best quality and price; hours of careful, knowledgeable effort to prepare the document to meet the parameters of the service I decide to use; a lifetime of business experience to be able to judge which printer to use and whether price should be the final determining factor in my decision; and finally, risk of job liability and client loss should the printer fail to perform his role satisfactorily. Yes, it’s my neck on the line, not my customer’s!

Time is money and everything I do for my clients takes my time, a lot of it. Isn’t that worth something? Apparently not, to most of my disgruntled clients, who are struggling on their end with the same disturbing circumstances! Almost nonexistent profits with increasing overhead. It’s not easy for anyone. So I don’t blame them for their suspicions and irritations. Yet, reality dictates that I must make a profit to stay in business.

While printing is one service that cannot bear a significant markup, there are plenty of others I offer which also are in the same boat. Mailing lists and mailing services! Domain registration and website hosting! Stock photography! Advertising!…to name just a few. These are all services which have so much competition for that coveted limited business that they in turn can only charge a pittance for what they sell. So there is virtually no room for me to charge a markup. Yet using such services requires endless investment of my time on behalf of my customers.

How? Let’s look at each one separately. My customer wants to reach a certain segment of the marketplace to present his offerings. I need to get him a traditional mailing list or perhaps an emailing list to approach that market. If the piece will be printed and mailed, I will have to strive for list quantities which will be manageable within his printing and mailing budget and offer a return on investment given expected response rates. So, with the help of a list representative, I begin the process of suggesting avenues to reach our goal by posing geographic limitations, industry sectors, commercial or residential targets, etc. This usually results in lists which are either too large to consider or too small to waste the effort on. So the process continues with parameters tweaked to try to come to a workable resolution.

In the case of stock photography, my customer and probably most of the world believes I will do nothing to deserve any justification for a marked-up price. Yet, there are hundreds of stock photo houses all with different ways to utilize their services, not to mention choosing from archives of rights-managed and royalty-free samples with strict regulations about usage and plenty of liability as the purchasing agent. And, what exactly are we looking for? Is my client an expert in assessing what kind of visual we need to present the right marketing image and communicate his message effectively? Usually not, which is why I am in the picture to begin with. Then, trying to access the available choices within a certain subject requires skill in proposing effective search terms, and concludes with having the aesthetic sensibilities and marketing savvy to wade through endless possibilities, narrow the search down to the few that can be considered the best to use…and then make that final choice, pay for it and download a huge file to work with effectively in his project. How many hours, days and years of my experience were tapped to perform this service? Countless! Yet, it is dubious I will be able to add any markup at all. And if I do, it will have to be infinitesimal!

And that doesn’t even take into account that most of my clients would rather try to take their own photos on less-than-optimal digital cameras or cell phones with poor resolution which necessitates that I perform digital enhancement services to try to correct a multitude of problems for which they expect I will not charge them anything.

Domain registration and hosting services? These are priced so competitively nowadays, companies are practically giving them away. (And in some cases… are!) Yet, the customers who need me to perform these services haven’t a clue about where to go, how much to pay, what is available, what they need, what is involved in the decision, how long it takes to perform the research, navigate the convoluted websites, set up the many aspects of each to implement them, keep them up and running all year despite problems with servers I have no control over, etc….but they are sure of one thing. Their friend or relative has told them that they are being overcharged.

Finally, traditional media like newspapers, magazines, radio and TV are eking out a living by the skin of their teeth, offering advertising rates so low they are embarrassing to divulge here. And unlike the domain businesses, they can’t even give it away. So much for the possibility of markup.

In articles I have read on markup, accountants have discussed the concept of “profit margin.” This involves applying a certain percentage to your cost in order to guarantee you will generate enough revenue to cover your overhead and net an acceptable business profit in the process. How neat.

In my reality, profit margin is a concept I’d throw out the window. I have to examine what prices the market will bear based on what my competition is charging and what my customer is willing (or able) to spend.

I have found that the best way to attract a new client into a long-term website relationship is to offer the domain registration and hosting for free for the first year because after that it is usually too mind-boggling for them to try to extract themselves from what has been set up, especially if they fear that the success of their website may be in jeopardy. But this may not work with every client and it is important to stipulate a multi-year contract so that they don’t opt out after the first free year.

I’ve also toyed with the idea of offering my creative services in conjunction with other services included as a package deal. But every client’s needs are different and they still compare whatever price I quote with a price my competition may have quoted whether we are comparing apples and oranges or not! And, as I’ve said previously, if any other services are expected, they want to know exactly what I am paying for those services.

You may ask why I let my clients push me around like that. When you are dealing one on one with a business owner who has confided in you about every aspect of his business in order to have you strategize marketing solutions for his benefit, direct questions about price sometimes become unavoidable. Since I don’t consider my clients my adversaries, I try to be as truthful as I can with them in order to build their trust in my judgment. Our collaboration and success together is the heart and soul of our business relationship. I cannot deny them the right to ask questions about cost. Even if they are my costs. They ultimately are our costs.

As for markup, I don’t like the way it makes me feel but if I can get away with it, I have to try to apply it in any situation that can handle it, as inconspicuously as possible, keeping my fingers crossed that no questions will come up. It is part of business survival that every business owner must use and therefore must understand. But to this business owner, it still seems deceitful and dishonest.

Xero Accounting Software: Pricing, Features, Reviews & Comparison of Alternatives

What Is Xero?

The award-winning accounting software, Xero, is one of the favourite financial collaboration apps available in the market. The software is heavily popular among leaders and top players in the accounting category.

The design of Xero is set to meet the requirements of small businesses, irrespective of their industry. The popular app is often the handiest asset for an accountant to manage their financial activities. What makes Xero great is its friendliness and usability while assembling top-notch features that help close important gaps in accounting.

A great advantage that Xero boasts is even someone with zero accounting knowledge finds it easy to manage, as even the most standardized and complex financial concepts become enjoyable. For instance, one can trace back double bookkeeping to the origins of the business, but Xero breaks the stigma of it being uncomfortable by non-expert users. The logic and the terminology of the accounting practices stay intact, but operations become simple for even a commoner to understand and use as per their business needs.

The ease of use and makes Xero a noteworthy name among the top-ranking companies around the globe, outperforming the accounting job than most prominent players in this competitive industry. Even though one feels that they do not have ample knowledge in the best accounting practices, Xero’s certified advisors’ guidance assists you all the way along the journey.

Founded in New Zealand in 2006, Xero has been recording outstanding growth rates on the global markets, especially in Australia, America, UK and Europe. Today, over 475,000 business and sole accountants are using Xero. Partnered with various accounting systems and third-party apps, Xero extends its usefulness in making your accounting journey a smooth outing.

Pricing

Xero offers variable pricing plans that suit your unique business needs. Currently, Xero no longer includes payroll and has put limits to a few features likes expenses and multi-currency support to its most expensive plan. However, each plan offers unlimited users and live bank feeds, letting businesses download, categorize, and perform their transactions as usual.

The accounting software offers three different pricing plans, which are billed monthly. One can cancel the subscription plan at any time they need, but with a notice period of a month. Xero offers a free trial period of 30 days with a demo company set up for one to explore the software before buying it. A nonprofit organization or owners of multiple companies can avail discounts from the accounting software company.

Let us have a look at the pricing plans by Xero:

Starter

Xero’s Early plan costs $20 per month and is ideal for freelancers, sole traders and new businesses. The plan includes:

  • Sending up to 20 invoices and quotes
  • Entering up to 5 bills
  • Reconciling bank transactions
  • Capturing bills and receipts with Hubdoc

The optional add-ons include claim expenses and track projects for $4 and $7 respectively.

Standard

The standard plan costs $30 per month and is ideal for growing small businesses. The plan includes:

  • Sending invoices and quotes
  • Entering bills
  • Reconciling bank transactions
  • Capturing bills and receipts with Hubdoc

The optional add-ons include claim expenses and track projects for $4 and $7 respectively.

Premium

The premium plan costs $40 per month and is ideal for established businesses of all sizes. The plan includes:

  • Sending invoices and quotes
  • Entering bills
  • Reconciling bank transactions
  • Capturing bills and receipts with Hubdoc
  • Using multiple currencies

The optional add-ons include claim expenses and track projects for $4 and $7 respectively.

Features

Bank Reconciliation

Xero imports all financial transactions into its database, before linking them to the corresponding accounting transactions. On confirming the match, the transaction will be reconciled in the system. The application can import feeds from more bank accounts, credit cards and PayPal accounts. The software also lets you perform more complex transactions by creating your custom rules. You can import and automatically reconcile pre-coded bank statements with the fast cash coding feature.

Dashboard

The Xero dashboard lets business owners get a complete picture of their key accounts, income and expense reports, upcoming bills and pending invoices, helping them understand all their company’s financial activities. You can turn on notifications to monitor certain accounts if needed.

Xero’s dashboard is easy to use and navigate and helpful for the user to understand every information they need. You can also perform tasks such as adding accounts, bills and issuing invoices in the dashboard.

Invoicing

The invoicing system is an important part of the accounting suite, helping you in generating and customizing business invoices. You can add your company’s logo, perform foreign currency conversion, and save different templates for separate clients.

The system can issue invoices for payments from various sources like PayPal accounts, bank transfers or credit cards. Xero’s invoicing tool provides alerts when your invoice has been opened by the recipient.

Xero can automatically convert the invoice into the currency used by the client, reducing the burden of manual conversion.

Security & Automatic Updates

Security is highly important for a cloud system that holds private information, making it safe from hackers and other malevolent attackers. The developers understand the threat, hence providing a dedicated security team to keep the data safe.

Xero team strive for constant improvements to their service, adding new features constantly. This ensures that the efficiency of the app and your user experience is always optimal.

Competitors

QuickBooks

QuickBooks is a cloud-based accounting solution, helping small businesses in managing their accounting and finances. A customer can view all accounts with auto-synchronization. The necessary accounting and client communication feature can also be done on their native iOS and Android apps.

Zoho Books

Zoho Books is another smart accounting solution, which is ideal for small businesses in helping them manage their business and cash flow. The app is user-friendly, has a clean design with vital features to generate actionable, data-based insights.

FreshBooks

FreshBooks is an award-winning robust cloud accounting app, ideal for small businesses to make easy billing. The software lets users manage key processes with ease while providing special modules to manage projects and taxes.

Ending Notes

With ample integrations and strong features, Xero is an ideal software for accounting purposed. With multiple automation, the application saves your business time in performing otherwise manual tasks. Hence, Xerox is the ideal accounting software for businesses.

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