When Fickle Customers Leave You Holding the Bag
Customers change their minds.
For those of us in business, that's hardly news. We're all faced with clients or customers who order or agree to one thing, then later -- whether out of necessity or whim -- revise what they want.
When the change is easy and doesn't cost money, of course, we're happy to oblige. But sometimes those changes disrupt our businesses or entail expenses. What do we do then? Just pass the cost along to the customer or eat the expense ourself? Explain the difficulties or keep quiet?
The problem, of course, is that often you want to accommodate the customer -- after all, you'd like to keep their business. But you've got a business to run, and you don't want customers to take advantage of you.
So how do you make reasonable accommodation without either losing your shirt or your self-respect?
- Be clear about terms upfront. Often, we're so eager to make a sale that we neglect to mention or underplay any additional costs or change penalties a customer may face. Of course, you don't want to mention extra fees first thing, but before the customer signs on the dotted line, make certain they understand the complete terms.
- Get it in writing. You can avoid some misunderstandings if you have a written agreement: a contract, purchase order, signed proposal. But don't depend on the client to read the small print -- make sure you clearly point out the penalties for changes, if any. If it's not your practice to ask for a signed agreement (and why isn't it?) then send the customer an email or letter, confirming the terms of your oral agreement.
- Explain limits on special deals. Let's say you're able to offer a customer a lower price because it's your slow season or you got a particularly good deal on raw materials or supplies. Don't keep the reason for your special deal a secret. Let the customer know the reason and when the offer expires. That will keep them from demanding the same prices months later.
- Always consider the long-term cost/benefit. Bend over backward to accommodate an established, long-term good customer. Even if you have to suffer a financial loss on this one order, it's worth it to keep the relationship. Face it, that's a cost of doing business. Of course, it's just good sense to let the customer know you're absorbing the costs for them; hopefully, they'll appreciate your gesture.
- Don't set the wrong precedent. Be particularly careful with new customers -- or new staff members of existing customers. Don't let your eagerness to develop an ongoing account allow you to set patterns that will be difficult to break. If you do accommodate their changes without cost, be very specific that next time there will be a charge.
- Develop clear change policies. If you're in a business where customers are likely to make alterations or revisions, devise a clear policy relating to those changes -- what kinds of alterations will be charged for, and which will be free. That makes it easier both to accommodate customers and to charge them when they make changes outside the policy.
- Develop policies that encourage customers to be committed. Few things are as frustrating as customers who back out of deals completely. Clients and customers don't realize that, often, even before you've spent money out-of-pocket, you've rearranged your schedule or begun work on their project. This is particularly true in consulting businesses, where you may have started research. Non-refundable deposits are an effective method to encourage customers to truly be committed before they give you the go-ahead. In some industries (for instance, real estate), buyers are typically required to make a substantial deposit which they'll forfeit if they back out of the deal. Don't be afraid to try this if it's at all appropriate in your business.
Nothing will completely erase the frustrations of dealing with customers who change their minds -- and their orders. And each situation, of course, depends on the specifics of the job and customer. But having clear policies -- and non-refundable deposits -- can take the confusion -- and the cost -- out of their capriciousness.
Copyright Rhonda Abrams, 2002
Rhonda Abrams writes the nation? s most widely-read small business column and is the author of The Successful Business Organizer, Wear Clean Underwear, and The Successful Business Plan: Secrets & Strategies. To receive Rhonda? s free business tips newsletter, register at www.RhondaOnline.com.