Real Life Marketing Lesson: Are You Charging Clients Like American Airlines?

Not surprisingly, many American Airlines customers expressed significant outrage over the airline’s recently announced plans to charge passengers additional fees for checking bags and for certain services related to reservations. Indeed, the news may have irked you as well. But before you start venting, ask yourself whether your billing policies “nickel and dime” your clients just as the airlines are doing to passengers.

For example, do you charge your clients when you call them to get additional information that you need for the case that you neglected to request? Do you bill them for correcting an error that you made on their bill? Does your $750 bill also tack on a .44 cents charge for postage and a $43 LEXIS charge? If those are some of your policies, you might want to re-examine them before complaining about American Airlines.

The bottom line is that most people don’t like to feel as if you’re squeezing money out of them every time they turn around. If American Airlines had simply raised fares an extra $50 to reflect increased gas prices, I doubt that most people would have raised a stink. But what bugs them are little charges here and there that should simply be rolled into the overall cost of a ticket.

For that reason, clients prefer flat fees, where they can pay one price and there’s no uncertainty about added charges. But even if flat fee billing isn’t feasible, consider rolling incidental costs like legal research services, phone, fax, postage and photocopying into your overhead and simply charging a higher hourly rate to cover these fees. Clients will balk less about your rates when they perceive them as encompassing full service rather than pay as you go.