Your Company’s Extra Tax

What if at your next management meeting your company owner sat down in the conference room and announced to everyone that in 30 days every customer would have to pay an extra $500 "experience tax" that would be tacked on to the bottom of every contract? How would you react? How would your other managers react?

Now no one likes taxes, so instead how about we call it an "experience fee." This fee is going to be rather substantial, perhaps up to several percentage points of the final sales price — now how do you feel? My guess is that most people in the room would say that it would cause lower customer satisfaction, that it would increase customer expectations, slow down construction time, and increase your costs (because you’d have to offer something extra to justify it). Here’s the reality — your company already has an experience tax, and it’s built into your current price.

Now the question is are you delivering a good enough experience to justify your higher price? If not, there is always another company down the road that is willing to cross out that experience tax (or substantially lower it) and offers a similar product for a lower cost. If profitability is a chief focus of your organization (and it always should be) then now is when the light bulb should be going off in your head. On many McDonald’s menus they used to say "smiles are free." Yes, smiles are free to produce, but they create an experience and emotion that cause people to buy more or pay more.

Note: I first learned of the concept of an experience tax from What’s the Secret to Providing a World-Class Customer Experience by John DiJulius. I’ve attended his workshops as well — and I highly recommend both.

Author BIO:
Kevin Oakley is a branding and marketing expert specializing in real estate. He is currently the Director of Marketing & Sales Training at Heartland Homes — a top 100 builder. You can interact with him on his blog at

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