This is our second installment in the series Simple Rules for Small Business.
- > You are the Expert.
- > Don’t Sell Them What They Can’t Afford.
- > Hire Good People; and Train, Train, Train.
- > Understanding Factors in Litigation.
- > Emails.
- > Do the Right Thing.
- > So, You Made a Mistake…Fix It (if you can).
- > Face time.
- > Get it in Writing.
You are the Expert.
Continuing the theme of managing expectations, if you are dealing with a consumer (rather than business – to – business), the burden of misunderstandings over technical matters will most likely fall on you. So, in addition to making sure you document the scope and specifications of what you are doing in writing, spending a little time educating your customer about relevant industry customs, terminology and so forth can be a great investment in avoiding misunderstandings later. Remember, a Judge is going to see you as the expert, and the one who was primarily responsible to avoid misunderstandings over matters that are beyond the normal expertise of a consumer.
Don’t Sell Them What They Can’t Afford.
Beware the over-extended client or customer. Say your customer wants a kitchen renovation. You don’t know for sure, but you sense they are at or maybe over the limit of their financial comfort zone. STOP! You are not doing either of you any favors by moving forward until both parties are completely comfortable with the scope and cost of the project. If they are stressed about the budget in the beginning, and especially if there is the potential for additional costs later, a frank discussion must occur. Later complaints about quality or performance are often little more than a pretense to negotiate a discount when the real issue all along was financial stress.
Hire Good People; and Train, Train, Train.
Pick your people well, and then train them in your product or service, your culture, and your expectations. Never stop teaching. Make sure they know their boundaries, and what needs to go up the ladder for approval. Monitor their interactions with clients and vendors. Establish procedures to deal with potential customer and vendor complaints. Don’t let subordinate employees make a potential problem worse.
Understanding Factors in Litigation.
Relative success or failure in litigation over contractual and business disputes depends on many factors. Proving fault (as the basis of the claim) and the amount of damages claimed –at least one of which is always in dispute in every case — are the two most obvious. But two enormously important factors are money and perception.
Unfortunately, the party who can (and is willing to) out-spend the other often has the advantage for the best relative outcome (either a win, or a reduced loss). Litigation is often a war of attrition and at some point the case settles because one side or the other runs out of money or comes to its senses. Each party has to pay their own legal fees, unless the contract or a law says otherwise. In most business vs. business disputes, there is no statute that reverses that rule. But, in business v. consumer and business v. employee disputes, there are numerous laws that turn the table on the business or employer, allowing consumers or employees to recover attorney’s fees and sometimes even exemplary (treble, or punitive) damages in appropriate cases, but only by the consumer or employee. The prospect or threat of that additional exposure can more than offset any spending advantage the business might initially seem to have had.
The other major factor – and often the most underrated — is perception. The party who wins the war of perception has a significant advantage that can overcome even significant weaknesses in their case. Judges, juries and arbitrators are people. They do not like to see other people mistreated. If one side is successful in portraying the other as unethical, deceptive, heavy handed, unreasonable or unconscionable, there is almost always enough wiggle room in the governing legal principles for the Judge, jury or arbitrator to gloss over the contract language, ignore some other weaknesses, and do what they think is “the right thing” if they feel so inclined. And they will. Business owners are well-advised to keep this in mind in all of their dealings, but especially with consumers.
Has your lawyer ever said this: “Seriously?…..you thought it was a good idea to put that in an email?” Email is an efficient way of communicating certain facts and information, but is a very poor substitute for a conversation or in-person meeting like real people used to have. When the emails become testy, it is a sure sign that it is time for a telephone call or, better yet, a face-to-face meeting, quaint as that may sound to younger people. We all know – and it is true – that the tone of emails can be misleading. Was that person being snippy, or was she just in a hurry?
It should also go without saying – but still bears mentioning – that you should always resist the urge to respond in-kind to emails that are nasty or that accuse you of some breach of your obligations. A response such as “I will give you a call to discuss” or “let’s meet to discuss your concerns, are you available tomorrow?” will always be better than indulging your immediate urge to vent or respond in kind. When in doubt, sleep on it before hitting “send”.
Remember, in our litigious world, emails are among the most fertile sources of “smoking gun” evidentiary discovery. And that goes not only for business-client communications, but for communications within your own organization.
Before you write an email that could (even inadvertently and out of context) be misconstrued in a lawsuit later, walk down the hall and talk to your colleague in person or call your customer on the phone.
Dealing with the “serial emailer” can be a delicate problem. Speak to them about saving up their myriad missives so that you can make sure that you are able to respond more efficiently to their questions concerns.
Do the Right Thing.
You know what it is: being fair and reasonable under the circumstances, treating others as they deserve to be treated and as you would want to be treated, and standing behind your product or service. It does not mean you concede when you are not wrong, or that you roll over in the face of unreasonable demands. But, as a strategy to avoid wasting time and money on avoidable disputes, a basic culture of doing the right thing beats a hard-nosed, heavy-handed, defensive approach, or smug reliance on fine-print disclaimers, almost every time.
So, You Made a Mistake…Fix It (if you can).
Ok, you messed up. Everyone does. So, make it right. If you discover it first, bring it to the customer’s attention immediately (hint…your customer’s trust in you may just have doubled). Either way, act swiftly to fashion a solution, discuss it with the customer, and fix it. Correctly. The first time. Half-baked cheapo solutions are great for your bottom line in the short run, but they are not your friend in the long haul. But…there are occasions when your mistake and its consequences could be beyond your ability to address, or could be potentially catastrophic for your business. If that happens, you need to call your lawyer immediately.
If your business involves a complex product, service or project that extends over a period of time, take the initiative and schedule periodic meetings in-person to discuss progress, next steps, price-adjustments, timelines and other relevant factors. Use these as an opportunity to gauge customer satisfaction with the process, and to answer questions and address concerns. Before you adjourn, make sure you have addressed anything on the customer’s mind. It shows that you are being attentive to their experience, and they leave your office satisfied.
Get it in Writing.
Not just the initial contract, but any agreed changes. Don’t rely on email unless your contract says you can.
So, say you have a contract to put in a new kitchen for Mr. and Mrs. Brown, and they want to upgrade the cabinets. You send them the specs and the price increase, and you get an email back from Mr. Brown’s email account giving you the green light. Did Mrs. Brown also approve it? Hmmm. Beats me! Get the change in writing, by all of the parties to the contract. Or make sure your contract allows for electronic mail and that EITHER spouse or party can approve changes.
Look for our next in the series of tips, Simple Rules for Small Business. To read Part 1 in the series, click here.